The Extractive Sector Transparency Measures Act (ESTMA)
came into force on June 1, 2015. ESTMA is designed to reduce
international corruption by enacting reporting obligations with
respect to payments made to foreign and domestic governments (and
government officials), and eventually aboriginal or indigenous
The reporting requirements also encompass payments made by a
foreign company that is controlled by a company listed in Canada or
that has a place of business, does business or has assets in Canada
and meets the size threshold. The notion of control is broadly
defined to include direct or indirect control by any means.
Companies subject to ESTMA are required to report and publicly
disclose all payments, including taxes, royalties, fees and any
other consideration for licensees, permits or concessions in excess
of C$100,000 (or such other threshold set by regulation) to a
"payee." "Payee" is defined broadly to
All levels of government in Canada
Any corporation or other body
established to exercise or perform — or that exercises or
performs — a power, duty or function of government
An employee or public office holder
of the foregoing
Given the breadth of the definition of a "payee,"
ESTMA will apply to payments to certain aboriginal governments,
subject to a two-year transitional period for aboriginal
governments in Canada.
ESTMA requires a director, officer, independent auditor or
accountant of a reporting company to attest that the information
contained in the report is true, accurate and complete.
Non-compliance with the reporting requirements is an offence.
Any director or officer who directed, authorized, assented to,
acquiesced in or participated in the non-compliance can also be
held personally liable, subject to a defence of due diligence.
These offences are subject to a maximum fine of C$250,000 for each
day that the non-compliance continues.
ESTMA will apply to financial years that begin after June 1,
2015. Reports must be made within 150 days after the end of the
company's financial year. As noted above, however, payments
made by companies to aboriginal governments in Canada before June
1, 2017 will not need to be disclosed or reported. The precise form
of required reporting and other matters will be addressed in
Ministerial guidelines that will likely be circulated for public
comment this summer.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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