DC Court Strikes SEC Rule Requiring Extractive Industries’ Reporting of Payments to Foreign Governments

On Tuesday, July 2, 2013, the U.S. District Court for the District of Columbia vacated a Securities and Exchange Commission (SEC) rule requiring oil, gas and mining companies to report payments in excess of $100,000 to foreign governments. The rule originated as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank) amendments to the Securities Exchange Act of 1943, 157 U.S.C. § 78m(q).

The rule was advanced largely by human rights and anti-corruption interests targeting corruption in developing countries with significant oil and mining resources and proved a costly compliance burden for extractive companies with global operations. Indeed, a coalition of oil industry associations led by the American Petroleum Institute, U.S. Chamber of Commerce and the National Foreign Trade Council filed the lawsuit challenging the rule, American Petroleum Institute v SEC, No. 12-1668 (D.D.C.). The lawsuit asserted that the SEC misinterpreted Dodd-Frank by forcing public disclosure of detailed data on payments, and failed to consider associated competitive effects, including risks associated with revealing trade secrets and pricing strategies.

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Topics:  Anti-Corruption, Disclosure Requirements, Dodd-Frank, Minerals, Oil & Gas, Resource Extraction, SEC

Published In: Civil Remedies Updates, Energy & Utilities Updates, Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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