BIS publishes consultation on country-by-country reporting in the extractive industries

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31 Mar, 2014

The Department for Business, Innovation and Skills (BIS) has published a consultation on proposals to implement the country-by-country reporting requirements for large extractive companies introduced by the European Union (EU) Accounting Directive.

Chapter 10 of the EU Accounting Directive (Directive 2013/34EU (link to European Commission website)) (“the Directive”) (and changes made by Directive 2013/50/EU (link to the European Commission website) to the Transparency Directive (2004/109/EC)) require listed and large non-listed companies with activities in the extractive industry and the logging of primary forests to report any payments made to governments on a country-by-country basis in an effort to improve the transparency.  The Directive was published in the Official Journal of the European Union on 29 June 2013 and EU Member States have until 20 July 2015 to incorporate the rules into their national law.  BIS propose to introduce the requirements during 2014. 

The Directive fixes the content of the reports that must be provided and provides limited flexibility for EU member states to use their discretion when implementing.  However there are certain areas that the consultation is seeking responses, the main areas being: 

  • Timetable for implementation in the UK.  BIS propose that the first report should be prepared in respect of financial years commencing on or after 1 January 2015.
  • Timeframe for the publication of the reports.  BIS propose that unlisted UK registered companies, including public companies, are required to publish the extractive report no later than 11 months after the end of their financial year.  BIS comment that when the requirements of the Transparency Directive are transposed into UK law, as companies subject to those requirements will have a shorter timeframe to prepare their reports these companies will have to comply with the shorter timeframe.
  • The format of the extractive report.  An illustrative example is provided within the consultation.
  • Filing of extractive reports with Companies House.  BIS propose that extractive reports should be filed in electronic format with Companies House.
  • Penalties for non-compliance.  BIS propose a similar penalty regime to that currently in place for failure to prepare and file statutory accounts and reports. 

The consultation is relevant to large UK registered extractives companies and UK listed extractives companies as well as civil society organisations with an interest in extractives transparency.  Responses are requested until 16 May 2014. 

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