Brussels, 10/04/2013 (Agence Europe) - On Tuesday 9 April 2013, the Irish Presidency of the EU Council of Ministers reached agreement with representatives of the European Parliament (EP) on review of the EU accountancy directives (see EUROPE 10822). Once officially endorsed by the EP and Council of Ministers, the new rules will come into force two years afterwards, in mid-2015.
The new directives include transparency provisions similar to those in force in the United States, with EU extractive and forestry companies being required to report details of payments, taxes and bonuses of over €100,000 year, project by project, to countries outside the EU (the US rules require the reporting of payments of over US$100,000). The aim is to allow individuals and NGOs in non-EU countries to hold their governments to account as a way of tackling corruption.
The chair of the Competitiveness Council, Richard Bruton of Ireland, said that the country by country reporting measures will massively improve transparency on payments to governments from European companies working in mining and will help people living in countries rich in natural resources to hold their governments to account about what they do with the cash they receive. The agreement marks the start of a new era of transparency, lifting the veil on an industry that is often far too secretive and it will also contribute to the fight against tax evasion and corruption, argued EU Internal Market Commissioner Michel Barnier.
At the most recent three-way negotiations, the Council of Ministers and the EP decided that the European Commission should prepare an implementing measure laying down criteria for deciding whether the United States' rules are equivalent to EU law, in which case, EU companies quoted on US stock exchanges would be able to use a copy of the information reported in the US for fulfilling the EU reporting requirements.
The organisation Transparency International has welcomed the agreement, describing it as a body blow against corruption in mining and natural resource industries. It is delighted that 90% of multinational mining industries will be covered by the new transparency rules and calls on EU leaders to get their colleagues on the G8 and G20 to follow suit in their own countries.
Describing the agreement as a “major advance”, Eva Lichtenberger MEP (Greens/EFA, Austria) regretted that the application of the new rules was narrowly defined. She said it was difficult to understand why reporting should be confined to mining and forestry when many developing countries depend on agricultural products and new industries not covered by the transparency rules. The Greens, she said, are particularly unhappy that it wasn't possible to extend the rules to the private security industry. The EP also wanted financial services, telecoms and construction to be covered.
Small business. The new rules include simplification of the accountancy rules that should save some €1.5 million, says the Irish Presidency, by cutting red tape. Rules will be simplified for European micro companies (those with a balance sheet of less than €4 million and a turnover of less than €8 million). Member states will have the option of extending these thresholds by 50% if they want, in order to make more companies eligible for lighter transparency rules. (MB/transl.fl)