On 27 June 2016, the SEC adopted a final rule requiring resource extraction issuers to disclose payments made to the US federal government or a foreign government if the issuer engages in the commercial development of oil, natural gas or minerals and is required to file annual reports with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act") (Form 10-K, 20-F or 40-F). Issuers must also disclose payments made by subsidiaries or other entities controlled by the issuer and that are consolidated for purposes of the issuer's financial statements.
Resource extraction companies will be required to disclose the following types of payments made to governments or state-owned enterprises: (i) taxes, including taxes levied on corporate profits, income and production but excluding taxes levied on consumption (i.e. VAT); (ii) royalties; (iii) fees (including licence fees); (iv) production entitlements; (v) bonuses, including signature, discovery, and production bonuses; (vi) dividends, except those paid to a government as a common or ordinary shareholder under the same terms as other shareholders; (vii) infrastructure payments; and (viii) community and social responsibility payments required by law or contract.
In the case that a resource extraction issuer acquires a company not previously subject to "publish what you pay" reporting, it will not be not be required to report payment information for the acquired company until the filing of a Form SD for the first fiscal year following the acquisition. The rules also permit reporting of payments related to exploratory activities to be delayed by one year.
For more information, please see the official SEC Final Rule here:
https://www.sec.gov/rules/final/2016/34-78167.pdf
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