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Highlights

Initial rule dates back to 2010

Would set minimum reporting standard at $750,000

Dissenting commissioners blast weakened rule

Washington — The US Securities and Exchange Commission agreed by a 3-2 vote to release a new proposal requiring multinational oil and gas companies to disclose payments made to foreign governments.

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The rule, initially mandated by Section 1504 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, has been twice adopted by the SEC, overturned by a federal court, and rolled back by Congress and President Donald Trump.

The rule is intended to bring transparency to bribes paid to foreign governments in exchange for oil, gas and mining rights overseas, but Robert Jackson Jr. and Allison Herren Lee, the two SEC commissioners who voted against the proposal Wednesday, said it would not achieve that aim.

"Today's proposal leaves many of these payments in the dark," Jackson said.

Jackson and Lee took issue with the proposal's expanded limits, or de minimis requirements, which do not require reporting payments of up to $750,000 for certain oil and gas projects.

"It's quite a stretch to call $750,000 de minimis, particularly in the context of some of these countries," Lee said.

Jackson and Lee said the proposal also sets up a reporting system with numerous new exceptions, including allowing disclosures to be aggregated and compiled by the agency, rather than through public, annual reports.

Lee said the SEC's new proposal "differs widely from international disclosure regimes."

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The proposal, for example, has exemptions from reporting if prohibited by a foreign law or pre-existing contract and for issuers that have recently completed their US initial public offerings.

Industry groups, including the American Petroleum Institute and the US Chamber of Commerce, have fought against earlier disclosure rules in court, arguing it carries a high compliance costs and causes competitive harm.

The rule was formally adopted by the SEC in August 2012, but vacated by the US District Court for the District of Columbia in July 2013. The SEC adopted a new rule in June 2016, which the then-Republican Congress rolled back through the Congressional Review Act in February 2017, which Trump later signed into law.

The rollback did not change the underlying law within Dodd-Frank, but it did establish that the SEC could not issue another rule that was "substantially the same" as the previous one.

"The proposal [approved Wednesday] is designed to address the statutory mandate in a manner that does not result in undue compliance burdens or competitive harm," SEC Chairman Jay Clayton said in a statement.

In January 2018, the House Financial Services Committee approved a bill by Representative Bill Huizenga, Republican-Michigan, to permanently repeal the disclosure requirements, but it was never voted on by the full House.

The rule proposed Wednesday will be subject to a 60-day public comment period, the SEC said.

-- Brian Scheid, brian.scheid@spglobal.com

-- Edited by Alisdair Bowles, newsdesk@spglobal.com