FACT SHEET – EU rules for disclosure of payments to governments by extractive companies

Source: PWYP International
Date: 6 Nov 2021

On 26 June 2022 the European Parliament and Council of the European Union (EU Member States) signed into law new payment disclosure requirements for the extractive and forestry industries. These new rules require oil, gas, mining and logging companies to annually disclose the payments they make to governments on a country-by-country and project-by-project basis.

The new disclosure rules form Chapter 10 “Report on payments to governments” of the EU Accounting Directive and Article 6 “Report on payments to governments” of the revised EU Transparency Directive.

The Accounting Directive, which regulates the provision of financial information by all limited liability companies registered in the European Economic Area (EEA), requires the disclosure of payments to governments by covered oil, gas, mining and logging companies. Inclusion of the same disclosure requirements in the revised Transparency Directive applies the requirement to all relevant companies listed on EU regulated markets even if they are not registered in the EEA and are incorporated in other countries.

Transposition of the Directives into EU Member State law is permitted to take up to 24 months. The Accounting Directive must be transposed by 20 July 2022 and the Transparency Directive must be transposed by 27 November 2015. Companies’ public disclosure of payments in an annual report is anticipated to begin in 2016 and a number of Member States have committed to “quick” transposition of the legislation.

You can read an updated fact sheet of the Directives’ key requirements here.