EU agrees country-by-country reporting for extractive industries
European companies required to disclose full information on payments of more than €100,000 (£85,000) to governments in resource rich countries
LARGE EXTRACTIVE COMPANIES will be forced to shed light on their dealings with national governments on a country-by-country basis, under new laws agreed in Brussels earlier this week.
Following the deal between the European parliament and commission, European companies will be required to disclose full information on payments of more than €100,000 (£85,000) to governments in resource rich countries.
The proposals, agreed as part of revisions to the EU’s accounting directive, means companies dealing with oil, gas, minerals and logging from primary forests will payments such as taxes on profits, royalties, and licence fees on a country and project basis.
Michel Barnier [pictured], the European commissioner for internal markets, said the agreement would show how EU legislation “can be a catalyst for change in developing countries”.
“The agreement will bring in a new era transparency to an industry which if far too often shrouded in secrecy and help fight tax evasion and corruption as well as create the framework so both companies and governments can be held to account on the use of revenues from natural resources,” Barnier said.
The accounting directive agreement also included new, simpler financial reporting requirements for SMEs, such as an exemption from preparing consolidated financial statements for small groups.
“This will result in a reduction in the administrative burden for small companies. SMEs are the backbone of the real economy and we must continue to make it easier for them to inject the dynamism our economy so desperately needs,” Barnier said.