European Parliament committee approves proposals on country-by-country reporting and on reducing bureaucracy for smaller EU firms
In its 18 September 2012 meeting, the European Parliament committee on legal affairs (JURI) approved a package of proposals imposing on large companies extracting oil, gas and minerals and loggers of primary forests a new obligation to provide full details on their payments to national governments. It also endorsed changes to existing EU accounting legislation aimed at reducing bureaucracy for smaller EU firms.
Both proposals were made in the connection of the European Commission's proposals for fostering more growth in Europe which involve changes to the Accounting Directives and the Transparency Directive. The proposals were originally published in October 2011.
The proposal on country-by-country reporting would require large extractive companies dealing with oil, gas and minerals to disclose full information on their payments to national governments, on a country-by-country and project-by-project basis. Similar rules were adopted by the United States Securities and Exchange Commission (SEC) in August 2012, and indeed, many European member states had warned not to adopt strict country-by-country reporting until the United States had made a similar move.
At the same time, the committee does not want to overburden smaller EU firms. Therefore, the the requirements will not be extended to small and medium sized entities (SMEs). Klaus-Heiner Lehne, the chairman of JURI, said: "We have to take care that we do not overload the reporting requirements with unnecessary information that proves useless in the end", and went on to indicate that the unanimous vote showed that the European Commission's course of reducing the accounting burden for SMEs was also a clear vote against "any attempt to introduce International Financial Reporting Standards (IRFS [sic]) for SMEs" that would "rather provide a platform for accounting tricks than a basis for accurate financial statements" anyway.
Please click for JURI press release on the European Parliament's website.