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Regulators finalize mining, drilling payment disclosure rules

Regulators finalize mining, drilling payment disclosure rules
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Federal financial regulators finalized rules on Monday requiring oil drillers, hydraulic fracturing operators and mining firms to disclose more information about payments they make to federal and foreign governments. 

The Securities and Exchange Commission (SEC) rule is mandated by the Dodd-Frank Wall Street reform law, and deeply opposed by the drilling industry, which says it exposes individual companies’ private financial data. A federal court blocked an earlier version of the rule. 

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The regulation requires natural resources firms that make SEC filings to disclose payments worth more than $100,000 annually to the federal government or to foreign governments. 

Monday’s move comes after a federal judge in 2013 blocked a previous version of the rule which asked companies to disclose even more payment information. The court said then that the rule was overly-broad and asked companies to release too much information, including some not disclosed by firms operating other countries.

The regulation is designed to allow regulators and the public to scrutinize the payments for improper spending or corruption, and SEC Chair Mary Jo White said she was “pleased that the Commission has completed these final rules, which will provide enhanced transparency to further the statutory goal."

But the oil and gas industry was already criticizing the rule on on Monday. 

“The SEC’s rule forces U.S. companies to disclose proprietary information to its competitors while foreign entities do not,” said Stephen Comstock, the director of tax and accounting policy for the American Petroleum Institute (API), which sued against the original rule.  

“This can give some large industry players an advantage on future business projects, and can fundamentally harm American jobs.”

API said it was reviewing the rule and considering its next steps.