New Anti-Corruption Provisions in EU Legislation: Increased Accountability for Mining, Oil and Gas Companies

by Dechert LLP

Large1 non-listed companies incorporated in the European Economic Area (“EEA”) which operate in the oil, gas and mining sectors will need to annually disclose any payments made to the national, regional or local authority of a host country on a country and project basis where the payment is above a threshold of EUR 100,000 (c. GBP 85,000 / USD 131,000). Sanctions for failure to comply are likely to be punitive.

The payments to be disclosed will include taxes on profits, royalties, dividends, bonuses, licence fees and other direct benefits to the government concerned, amongst others. There will be no exemption to the disclosure requirements, even if the disclosure is not permitted by the host country’s criminal law.


The European Commission has proposed amendments to the existing Directive on transparency requirements for listed companies (the “Transparency Directive”) and to the Directives on accounting rules for annual accounts and consolidated accounts (the “Accounting Directives”) (together the “EU Directives”). The European Parliament and the Council reached agreement on 9 April 2013 on the proposed amendments to the Accounting Directives, paving the way for the new legislation to be adopted later this summer2.

It is expected that an agreement will soon follow that sees the same amendments being made to the Transparency Directive. The obligations will then apply to all companies listed on EU Regulated Markets (e.g. the London Stock Exchange) even if the company is not registered in the EEA and is incorporated in a third country.

Comparison with the US 

The proposed amendments to the EU Directives will bring Europe in line with the United States. Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”) applies to companies engaged in the commercial development of oil, natural gas or minerals and which file periodic reports to the US Securities and Exchange Commission.

In the United States, companies are required to report any payment or series of payments that equal or exceed USD 100,000 (c. GBP 65,000 / EUR 77,000) in a fiscal year. The de minimis threshold is therefore lower than under the proposed amended EU Directives. Companies must also disclose taxes, royalties, fees (e.g. licence, rental and entry fees), bonuses (e.g. signature, discovery and production bonuses), dividends, production entitlements and payments for infrastructure improvements.

In the United States, companies need to report payments made to the US Federal Government and all foreign governments. However, payments to US State Governments are not covered. This differs from the proposed amended EU Directives which require the disclosure of payments to national, regional or local authorities which are above EUR 100,000 (c. GBP 85,000 / USD 131,000).

In the United States, no exemptions are available to the disclosure requirements even if the laws of the producing country or contracts entered into prohibit companies from disclosing the information required. The proposed EU Directives will therefore mirror the position in the United States.

What does this mean for you?

It should be noted that the proposed amendments to the EU Directives will need final approval from the European Parliament. This is expected later this summer (June 2013). There will be a further period following adoption of the legislation before the EU Directives enter into force. During this period, Dechert is well placed to assist companies to put in place systems and policies to comply with these new obligations. Companies should:

  • assess whether the business will need to comply with reporting requirements in both the US and the EU; 
  • develop a robust set of policies and procedures to ensure that payments are recorded accurately and that cash payments are adequately supported; and
  • begin identifying which business units or employees will require specific training on the new obligations under the amended EU Directives.

1A large company is one which exceeds two of the three following criteria: turnover of EUR 40 million (c GBP 34 million), total assets of EUR 20 million (c. GBP 17 million) and 250 employees.

2The amendments to the Accounting Directives are due to be voted on by the European Parliament at the June plenary session.


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.

© Dechert LLP | Attorney Advertising

Written by:

Dechert LLP

Dechert LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.