Tuesday, July 27, 2010

US Govt urges countries to adopt payment disclosure laws

The White House, which passed a bill last week forcing oil, gas and mining companies to disclose payments to foreign companies, issued a statement urging others to do the same

Author: Lesley Wroughton (Reuters)
Posted: Monday , 26 Jul 2010

WASHINGTON (Reuters) -

New U.S legislation that forces gas, oil and mining companies to disclose payments to foreign governments should become a global standard for more corporate transparency, the White House said on Friday.

The Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama this week, includes a little-known provision that requires energy and mining firms registered with the U.S. Securities and Exchange Commission to reveal their tax and revenue payments to foreign governments.

The White House drew attention to its importance in a statement on Friday saying it would work with other countries to adopt similar rules to halt back-room deals that cost taxpayers in lost royalties.

Across Africa and elsewhere, natural resource wealth has failed to translate into better living conditions for millions of people, while trade in "blood" diamonds has been blamed for fueling wars.

"This legislation will immediately shed light on billions in payments between multinational corporations and governments, giving citizens the information they need to monitor companies and to hold governments accountable," the White House said.

Development and anti-poverty groups have hailed the provision as a major step for increasing the transparency of transactions between international mining and oil companies and governments in resource-rich poor countries.

Development groups have long called for governments in developed countries to take steps to stop the billions of dollars that go missing each year through corruption in oil, gas and mining revenues.

Governments and industry joined forces in 2000 to halt the trade in "blood" diamonds used to finance such wars as those in Angola, Ivory Coast, Democratic Republic of Congo and Serra Leone.

The so-called Kimberley Process set out requirements for controlling rough diamond production and trade.

"This provision sets a new standard for corporate transparency," the White House said of the legislation.

"The United States is committed to working with other countries to ensure the implementation of similar disclosure requirements in other financial markets and will make this a priority in the year ahead," it said.

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