Payments to Governments

Challenge to Rule 13q-1 Implementing Section 1504 in 2013

United States views on international law [1] in relation to Challenge to Rule 13q-1 Implementing Section 1504: On July 2, 2013, a district court judge vacated Rule 13q-1 implementing Section 1504 of Dodd-Frank, finding that the SEC's interpretation of the statute as requiring public disclosure of payments to governments was unreasonable under the APA. American Petroleum Inst. et al. v. SEC, No. 12-1668 (D.D.C. 2013). The court also found that the SEC acted unreasonably in refusing to allow an exemption from the disclosure requirement in the case of payments to governments whose domestic law forbids such disclosures. The SEC brief defending its approach to implementing Section 1504 is available at (Secretary of State website) state.gov/s/l/c8183.htm. Several members of the U.S. Senate— including Senators Cardin and Lugar who authored the provision—urged the SEC to engage in additional rulemaking to reinstate the rule, suggesting that with further elaboration of its rationale, the SEC could properly maintain the public disclosure requirement, without any exemption for payments to governments prohibiting such disclosures, and still satisfy the district court's concerns. The letter from these U.S. senators to the SEC is available at (link resource) sec.gov/comments/df-title-xv/resourceextraction-issuers/resourceextractionissuers-2.pdf. The SEC declined to appeal the district court's decision vacating the rule and will instead promulgate a revised rule.

Resources

Notes

1. Challenge to Rule 13q-1 Implementing Section 1504 in the Digest of United States Practice in International Law