Friday, August 6, 2010So You Thouht it was All About Financial IndustrReform…By:Martin FisherHaydis and Ian MacGregor
Version francais
The DoddFrank Wall Street Reform and Consumer Protection Act (the"DoddFrank Act"), as signed into law by US President Obama on Jul21, 2010, creates the followinnew disclosure obliations for resource extraction issuers and users of "conflict minerals":
theorts with the US Securities and Exchane Commissionresource extraction issuers that are reuired to file re "SEC"the issuer, its subsidiariesmade borts ana mentwill now be reuired to disclose in their annual re or an entitunder the issuer's control, to annonUS overnmentor to the US federalovernment for the ur oseof the commercial develoment of oil, naturalas, or minerals an USreportin issuerthat uses conflict minerals in its products will now be required to determine whether the minerals oriinated in the Democratic Republic of Cono the"DRC"or anDRC and if so,countr borderin the to file a reort with the SEC includin, amonother thins, a descrition of the due dilience measures taken b the issuer on the source and chain of custodof the minerals each US reortin issuerthat is an oerator, of a coal or other minethat is an oerator, or that has a subsidiar will now be required to disclose information regarding violations of, and other matters relating to, the US Federal Mine Safety and Health Act
This bulletinrovides a brief summarof theserovisions of the DoddFrank Act, as well as some of the issuesou ma wish to consider as the SEC drafts and seeksublic comment on the reulations that will set out the secifics of the new disclosure reuirements. Asa result of the lare number of reulations the DoddFrank Act reuires the SEC tore are, the SEC is allowinthe ublicto rovidecomments on all such reulations before theare ublished,includin those relating to the DoddFrank Act provisions described in this bulletin.Anyone who is interested in providing comments to the SEC as to the form the reulations should take can access theSEC's public comment pae for the DoddFrank Act provisions.
Disclosure of Payments Made to Governments
The DoddFrank Act reuires anissuer that is alreadre uiredto file an annual reort with the SEC under the US Securities Exchane Act of 1934a"US reporting issuer"in the commercial development of oil,a edand that is en natural as,or minerals, to disclose in its annual reort the te and total amount on aro ect level basis of ana ment that relates to that commercial develoment, is not ade minimisovernment orand is a ment,n nonUSaid to a forei the US federalovernment bthe issuer, anof its subsidiaries or anentit underthe issuer's control.For uroses of the Act, a foreign government will include any nonUS government and any department, agency, instrumentality of or compan ownedb thatnonUS overnment.An issuer is considered to be involved in the commercial development of oil, naturalas or minerals if it is ena edin exloration, extraction,rocessin ,ex ortand other sinificant actions relatin tooil, naturalas or minerals, or the acuisition of a license for anof those activities.Althou hthe Act does not set out each te ofa mentthat must be disclosed, it does secif thatthe willinclude taxes, roalties, feesincludin license fees ,roduction entitlements, bonuses, and other material benefits determined bthe SEC, consistent with the Extractive Industries Transarenc Initiative,to beart of the commonlreco nizedrevenue stream for the commercial development of oil, natural gas, or minerals.The Act also requires that the disclosure be provided in interactive data