Biz groups to court: EU oil rule doesn’t justify SEC mandates

“Petitioners can hardly claim that the [Securities and Exchange Commission’s] analysis was unreasonable when the EU is poised to adopt similar measures,” Oxfam America told the U.S. Court of Appeals for the District of Columbia Circuit. 

The dueling letters are part of the thrust-and-parry over SEC rules
required under the 2010 Dodd-Frank financial overhaul law. Click here and here for more on the litigation.

The new letter from business and industry groups challenging the SEC rule argues that the European plan has nothing to do with the case.

“The EU’s payment disclosure agreement, which is not yet law, is extra-record material that has no bearing on the legality of the Commission’s decisionmaking,” states the letter from the attorney for the business groups fighting the SEC rule.

The rule forces SEC-listed oil, natural-gas and mining companies to reveal payments to governments related to projects in their countries, such as money for production licenses, taxes, royalties and other aspects of energy and mineral projects.

The rules on both sides of the Atlantic are aimed at undoing the “resource curse,” in which some impoverished countries in Africa and elsewhere are plagued by corruption and conflict alongside their energy and mineral wealth.

Oil industry and business groups challenging the rule in court say it will impose costly burdens and hinder competitiveness. They allege the SEC’s economic analysis was badly flawed and that the regulators should have provided certain exemptions.

In calling the EU action “irrelevant,” the groups challenging the rule wrote Thursday that “The EU does not have the same obligation as the [Securities and Exchange] Commission to consider its actions’ effects on efficiency and capital formation, and to avoid unnecessary burdens on competition.”

“The possibility that another regulatory authority may be poised to impose a similar economic burden, with comparable disregard for its effects, does not exculpate the actions of the [Securities and Exchange] Commission under the Exchange Act and the [Administrative Procedure Act],” the business groups state.

The National Foreign Trade Council and Independent Petroleum Association of America joined the U.S. Chamber and the American Petroleum Institute in challenging the SEC rule in the case filed last year.


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