GLOBAL Financial Integrity (GFI) lauded European leaders today for agreeing to adopt historic transparency rules for European companies operating in the extractive sectors. The rules, announced yester evening in Brussels, will require large, privately-owned European companies and EU-listed firms operating in the oil, gas, mining, and logging sectors to disclose information on payments made to governments.

The agreement will require firms covered by the rules to disclose on a project-by-project by project basis all payments made to governments above €100,000 (approximately US$131,000) including taxes-paid, royalty fees, and license fees.

Connections to Cardin-Lugar

The European agreement builds upon U.S. legislation passed in 2010, the Cardin-Lugar provisions (section 1504) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires all companies registered with the U.S. Securities and Exchange Commission operating in the oil, gas, and mining sectors to report on payments made to foreign governments.

Unlike the Cardin-Lugar provisions, the European rules will also cover large, privately-owned firms, and they will extend to companies operating in the logging sector. Moreover, the new rules would instruct the European Commission to consider extending the rules to more industries.