Twelve Democratic Senators urged the SEC to "promptly re-issue a new
anti-corruption rule implementing
Section 1504 of the . . . Dodd-Frank Act . . . that is
consistent with both Congressional intent and the extractive
industry transparency laws in effect in thirty other
countries." The Senators emphasized that the recent enactment
of H.J. Res. 41 to nullify the SEC final rule regarding resource
extraction issuer disclosure requirements (see
previous coverage) "does not change the [SEC's] legal
obligation under the Dodd-Frank Act to promulgate a [final]
Commentary / Nihal Patel
The Democratic Senators agree with their Republican colleagues
on at least one point. In a February 2, 2017 letter, six Republican
Senators expressed "strong" support for combating U.S.
companies' "participation in corrupt financial practices
abroad," and urged the SEC to adopt rules that are
"consistent with the international standards adopted by
European and other governments" when implementing the
"bipartisan Cardin-Lugar anti-corruption provisions in
[Section 1504]." The Democratic Senators agree that
consistency with European rules is "critical"; however,
they argue that their Republican colleagues' concern that
certain countries may prohibit the relevant disclosures is
unfounded. Instead, the Democratic Senators urged the SEC to adopt
a rule that contains narrowly tailored exceptions where any such
prohibitions exist, rather than "blanket exemptions" that
would conflict with international reporting schemes.
highlighted, the history of the SEC implementation of Section
1504 is tortured. When Congress overruled the SEC rulemaking via
the Congressional Review Act, it did not amend the statute, and so
the SEC remains tasked with writing the rules required under
Section 1504. (One of the sponsors of H.J. Res. 401 (Rep. Huizenga)
said that rather than have Congress rewrite the rule, he preferred
to "put it back to the SEC.") It remains to
be seen whether the SEC will take up the task. Acting Chair Michael
Piwowar has made no secret of his distaste for the statutory provision:
"Provisions such as Section 1504 have nothing to
do with helping investors. This is yet another situation where
politically connected special interests are using shareholder
resources to push their own agenda." (emphasis in
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