Dodd-Frank Provisions Applicable to Resources Companies Operating Internationally: Resource Extraction Disclosure Under Section 1504 of the Dodd-Frank Act
On November 13, 2012, new rules on disclosure by “resource extraction issuers” became effective. Rule 13q-11 under the Securities Exchange Act of 1934, as amended (Exchange Act),2 requires those issuers to disclose annually on Form SD (specialized disclosure report)3 payments of $100,000 or more to either a foreign government or the U.S. federal government in connection with the “commercial development of oil, natural gas, or minerals.”4 A resource extraction issuer must provide information about payments for each project and to each government made by the issuer, its subsidiaries, or any entity it controls.5 Rule 13q-1 implements section 13(q) of the Exchange Act,6 which was added to the Exchange Act by section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)7 to increase the transparency of payments made to [18-4] governments by issuers engaged in extraction activities in the oil, natural gas, and minerals industry. When it issued Rule 13q-1, the Securities and Exchange Commission (SEC) amended Form SD, which it had adopted as part of its “conflict minerals” rule, to require the resource extraction disclosure.8 The new rules will require resource extraction issuers to begin reporting qualifying payments made after September 30, 2013. This chapter provides an overview of the new rules and discusses some of the concepts that will be impor
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