Update on transparency reporting – compliance with EU reporting requirements by extractive companies on government payments is determined to be an acceptable substitute for Canada

In an earlier post we noted that the Canadian federal government had brought new legislation into force on 1 June 2015, the Extractive Sector Transparency Measures Act, which establishes reporting requirements of payments made to governments by mining (and other extractive) companies. This followed the earlier implementation by Norway and the UK of similar reporting obligations of payments to governments.  We have previously posted updates on the UK regime for extractive companies with debt or equity securities listed in the UK and large, unlisted companies incorporated in the UK (including subsidiaries of non-UK parent companies) to produce annual reports on payments to governments for financial periods starting on or after 1 January 2015. If you would like a copy of our detailed briefings on the EU Directives and on early UK implementation, please contact Jennifer Bell or Sarah Hawes.

Draft guidance now issued for comment

The Canadian federal government has now released its draft Guidance and Technical Reporting Specifications for review and comment (comments may be provided until 22 September).  These tools have been developed in consultation with industry, civil society organisations, Aboriginal experts and provinces, and provide general information on (a) who is subject to the Act (b) which entities must report (c) what payments should be reported.

EU reporting requirements determined acceptable substitute

Section 10(1) of the Canadian Act allows the Minister of Natural Resources Canada to determine that the reporting requirements of another jurisdiction are an acceptable substitute for the reporting obligations in the Act.  As of July 31, 2015, the EU's Accounting and Transparency Directives were determined to be an acceptable substitute, so that reports submitted to European Union and European Economic Area member-states that have implemented those 2 directives at a national level (eg the UK) may be submitted to the Canadian Minister as a substitute.  Companies seeking to use this substitution determination must comply with the reporting requirements in the EU/EEA member country, submit a substitution report to the Canadian government and follow the Canadian Act's publication requirements.

For further information, please contact Jennifer Bell, Partner, London or Sarah Hawes, Professional Support Consultant, London.