On 28 March 2014, the Department of Business, Innovation and Skills (BIS) published a consultation paper on the proposed UK implementation of Chapter 10 of the EU Accounting Directive.
This Directive introduces an obligation for companies active in the extractive or logging of primary forests industries to report on material payments made to governments in the countries in which they operate, on an annual basis (country-by-country reporting). BIS propose introducing regulations during 2014 requiring all UK-incorporated affected companies to comply with the reporting requirements, which will take effect in respect of financial years commencing on or after 1 January 2015.
The new BIS regulations will also be relevant to certain non-UK incorporated Transparency Directive compliant entities where the UK acts as home Member State and the FCA’s Disclosure Rules and Transparency Rules (DTRs) apply. Revised Article 6 of the amended EU Transparency Directive cross-refers to Chapter 10 of the Accounting Directive and requires companies to ‘prepare on an annual basis, in accordance with Chapter 10 of that Directive, a report on payments made to governments’. When the FCA implements this requirement through the DTRs, relevant issuers will use the new BIS regulations when preparing their report.
Therefore, we would encourage relevant issuers subject to the requirements of the Transparency Directive to read the following consultation and comment, if appropriate:
Extractive industries reporting: implementing the EU Accounting Directive[1]
All responses to the consultation should be sent to [email protected]
The consultation is open until Friday 16 May 2014.