Brussels, 12/09/2003 (Agence Europe) - Commissioner Frits Bolkestein, is expected to look at the state of play governing ongoing negotiations with the USA on the Sarbanes-Oxley act on auditing companies during the informal Ecofin Ministers meeting on Saturday in Italy.
On Thursday the Commissioner met Bill McDonough, President of the US organisation in charge of checking auditing companies (Public Company Accounting Oversight Body-PCAOB). The Commission indicated that "discussions are serious", that this meeting was part of the "ongoing dialogue" and that another meeting had been planned for 14 October in Washington. The Americans provided assurances that, "dialogue continues. The PCAOB is committed to fully implementing the Sarbanes-Oxley Act by taking into account our common interests and without submitting non-US companies from suffering excessive charges".
In other words, negotiations begun last April are stalling. Reaching an agreement with the USA "will not be easy", pointed out Commissioner Bolkestein to the public freedoms committee at parliament his week.
The Sarbanes-Oxley Act was adopted in August 2003 in the USA for restoring confidence in auditing companies following the Enron and Worldcom scandals. It demands that all auditing companies register with the PCAOB and checks them regularly. Non-Us companies will be obliged to register in April 2004, which compels them to begin proceedings next January.
The European Union is attempting to obtain amendments to prevent European companies having to submit to a two-fold legislation of the Europeans and Americans. Last June, the Ecofin Council adopted a declaration requesting a moratorium in the USA while awaiting negotiations on mutual recognition of auditing legislation. Ministers believe that the Sarbanes-Oxley law is "restrictive, costly and useless". They find it particularly unacceptable that auditing companies are obliged to present confidential documents during checks and could be subject to sanctions (see EUROPE 4 June p 6).
During a visit to Brussels in June, Roel Campos, Commissioner for the US Security and Exchange Commission, provided assurances that the US would not compel EU companies to provide information that was in violation of their national legislation. This assurance does not appear to have convinced the Europeans. He above all indicated that the USA was not ready to negotiate mutual recognition agreements, declaring, "We are more inclined to put in place a single series of measures for all participants in the US market than mutual recognition" (see EUROPE 12 June p 13).