# The Reports on Payments to Governments Regulations 2014

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U.K.

Statutory Instruments

# 2014 No. 3209

Companies

Partnership

# The Reports on Payments to Governments Regulations 2014

Made

28th November 2014

Coming into force

1st December 2014

The Secretary of State is a Minister designated for the purposes of section 2(2) of the European Communities Act 1972 M1 in relation to the creation, operation, regulation or dissolution of companies and other forms of business organisation M2.                        

The Secretary of State makes the following Regulations in exercise of the powers conferred by section 2(2) of the European                           Communities Act 1972, sections 15 and 17 of the Limited Liability Partnerships Act 2000 M3 and sections 468, 1069 and 1105 of the Companies Act 2006 M4.                        

In accordance with paragraph 2(2) M5 of Schedule 2 to the European Communities Act 1972, section 17(4) of the Limited Liability Partnerships Act 2000 and sections                           473(3), 1069(3), 1290 and 1292(4) of the Companies Act 2006, a draft of these Regulations has been laid before Parliament                           and approved by a resolution of each House of Parliament.                        

Marginal Citations

M11972 c.68. Section 2(2) was amended by section 27(1) of the Legislative and Regulatory Reform Act 2006 (c.51) and by Part 1 of the Schedule to the European Union (Amendment) Act 2008 (c.7). The enabling powers of section 2(2) were extended by virtue of the amendment of section 1(2) by section 1 of the European Economic Area Act 1993 (c.51).

M2S.I. 2007/193.

M32000 c.12. Section 17 was amended by S.I. 2009/1804.

M42006 c.46.

M5Paragraph 2(2) was amended by section 27(c) of the Legislative and Regulatory Reform Act 2006 (c.51).

## Citation and commencementU.K.

1.—(1) These Regulations may be cited as the Reports on Payments to Governments Regulations 2014.                  

(2) These Regulations come into force on 1st December 2014.

## InterpretationU.K.

2.—(1) In these Regulations—                  

“the Act” means the Companies Act 2006;                  

“affiliated undertakings” means any two or more undertakings within a group;                  

“Companies Act accounts” has the meaning given by sections 395(1)(a) and 403(2)(a) of the Act;                  

“consolidated report” has the meaning given in regulation 8;                  

“the Directive” means Directive 2013/34/EU of the European Parliament and of the Council of 26th June 2013 on the annual financial statements, consolidated financial                     statements and related reports of certain types of undertakings M6;                  

“director” means—                  

in relation to a company—

a director of the company, and any person occupying in relation to it the position of a director (by whatever name called),                                       and                                    

any person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors                                       of the company are accustomed to act;                                    

in relation to a limited liability partnership, a member;

in relation to a limited partnership, a general partner; and

in relation to a partnership, a partner;

“electronic means” has the meaning given in section 1168 of the Act;                  

“equivalent reporting requirements” are reporting requirements in non-member States that are equivalent to the requirements                     of Chapter 10 of the Directive and which have been assessed by the European Commission as being equivalent in accordance with                     Article 47 of the Directive;                  

“general partner” has the same meaning as in the Limited Partnerships Act 1907 M7;                  

“government” means any national, regional or local authority of a country, and includes a department, agency or undertaking that is a                     subsidiary undertaking where the authority is the parent undertaking;                  

“group” means a parent undertaking and all its subsidiary undertakings;                  

“IAS accounts” has the meaning given in sections 395(1)(b) and 403(1) and (2)(b) of the Act;                  

“large undertaking” means an undertaking that meets at least two of the three following criteria—                  

its balance sheet total on its balance sheet date exceeds £18 million;

its net turnover on its balance sheet date exceeds £36 million;

the average number of employees during the financial year to which the balance sheet relates exceeds 250;

“limited partnership” means a partnership formed in accordance with the Limited Partnerships Act 1907;                  

“logging undertaking” means an undertaking which undertakes in primary forests the activity referred to in Section A, Division 02, Group 02.2                     of Annex 1 to Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20th December 2006 establishing the statistical classification of economic                     activities NACE Revision 2 M8 as set out in Table 1 in the Schedule to these Regulations;                  

“mining or quarrying undertaking” means an undertaking which performs any activity involving the exploration, prospection, discovery, development, and extraction                     of minerals, oil, natural gas deposits or other materials, within the activities listed in Section B, Divisions 05 to 08 of                     Annex 1 to Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20th December 2006 establishing the statistical classification of economic                     activities NACE Revision 2 as set out in Table 2 in the Schedule to these Regulations;                  

“net turnover” means the amounts derived from the sale of products and the provision of services after deducting sales rebates and value                     added tax and other taxes directly linked to turnover;                  

“parent undertaking” has the meaning given in the Act, but is to be read as if “undertaking” has the meaning given in these Regulations;                  

“partnership” means a partnership within the Partnership Act 1890 M9;                  

“payment” means an amount paid, whether in money or in kind, for relevant activities, where the payment is any of the following types—                  

production entitlements;

taxes levied on the income, production or profits of companies, excluding taxes levied on consumption such as value added                              taxes, personal income taxes or sales taxes;                           

royalties;

dividends, other than dividends paid by an undertaking to a government as an ordinary shareholder of that undertaking, where—

the dividend is paid to the government on the same terms as to other ordinary shareholders, and

the dividend is not paid in lieu of production entitlements or royalties;

signature, discovery and production bonuses;

licence fees, rental fees, entry fees and other considerations for licences or concessions; or

payments for infrastructure improvements;

“primary forest” means a forest of native species, where there is no clearly visible indication of human activities and the ecological processes                     are not significantly disturbed;                  

“project” means the operational activities which—                  

are governed by a single contract, licence, lease, concession or similar legal agreement, and

form the basis for payment liabilities with a government;

“public interest entity” means an undertaking—                  

whose transferable securities are admitted to trading on a regulated market of any member State within the meaning of point                              (14) of Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council of 21st April 2004 on markets in financial instruments M10;                           

that is a credit institution as defined in point (1) of Article 4 of Directive 2006/48/EC of the European Parliament and of the Council of 14th June 2006 relating to the taking up and pursuit of the business of                              credit institutions M11, other than those referred to in Article 2 of that Directive; or                           

that is an insurance undertaking within the meaning of Article 2(1) of Council Directive 91/674/EEC of 19th December 1991 on the annual accounts of insurance undertakings M12;                           

“the registrar” has the meaning given in section 1060 of the Act;                  

“relevant activities” means—                  

the activity as set out in Table 1 in the Schedule to these Regulations within primary forests; or

any activity involving the exploration, prospection, discovery, development, and extraction of minerals, oil, natural gas                              deposits or other materials, within the activities listed in Table 2 in the Schedule to these Regulations;                           

“report” has the meaning given in regulation 4;                  

“subsidiary undertaking” has the meaning given in the Act, but is to be read as if “undertaking” has the meaning given in these Regulations;                  

“undertaking” means—                  

a limited company;

a limited liability partnership;

a limited partnership, each of whose general partners is—

a limited company,

an unlimited company, each of whose members is a limited company,

a Scottish partnership which is not a limited partnership, each of whose members is a limited company, or

a Scottish partnership which is a limited partnership, each of whose general partners is a limited company;

a partnership, each of whose partners is—

a limited company,

an unlimited company each of whose members is a limited company,

a Scottish partnership which is not a limited partnership, each of whose members is a limited company, or

a Scottish partnership which is a limited partnership, each of whose general partners is a limited company;

an unlimited company, each of whose members is—

a limited company,

an unlimited company each of whose members is a limited company,

a Scottish partnership which is not a limited partnership, each of whose members is a limited company, or

a Scottish partnership which is a limited partnership, each of whose general partners is a limited company;

(2) The references in paragraphs (c)(i) to (iv), (d)(i) to (iv) and (e)(i) to (iv) of the definition of “undertaking” to a limited                     company, an unlimited company, a Scottish partnership which is not a limited partnership or a Scottish partnership which is                     a limited partnership include a comparable undertaking incorporated in or formed under the law of a country or territory outside                     the United Kingdom; and in relation to such an undertaking the references in those paragraphs to the members and general partners                     are to be construed as references to the members of the undertaking comparable to members or general partners.                  

(3) An undertaking which is a large undertaking in a financial year does not cease to be a large undertaking because it no longer                     meets at least two of the criteria in the definition of “large undertaking” in the following financial year.                  

(4) But if a large undertaking ceases to meet at least two of the criteria in the definition of “large undertaking” in two consecutive                     financial years, it ceases to be a large undertaking on the first day of the financial year immediately following the second                     of those consecutive years.                  

(5) If agreements of the kind referred to in the definition of “project” are substantially interconnected, those agreements are                     treated for the purposes of these Regulations as a single project.                  

(6) For the purpose of paragraph (5), “substantially interconnected” means forming a set of operationally and geographically integrated contracts, licences, leases or concessions or related                     agreements with substantially similar terms that are signed with a government, giving rise to payment liabilities.                  

(7) Such agreements may be governed by a single contract, joint venture, production sharing agreement, or other overarching legal                     agreement.                  

Marginal Citations

M6OJ L 182 29.06.2013 p.19.

M71907 c.24.

M8OJ L 393, 30.12.2006, p.1, as last amended by Regulation (EU) No 70/2012.

M91890 c.39.

M10OJ L 145 30.04.2004 p.1, as last amended by Directive 2010/78/EU.

M11OJ L 177 30.06.2006 p.1.

M12OJ L 374 31.12.1991, p.7, as last amended by Directive 2006/46/EC.

## Application and transitional provisionU.K.

3.—(1) These Regulations apply in relation to a financial year of an undertaking beginning on or after 1st January 2015 subject to                     paragraph (2).                  

(2) These Regulations do not apply in relation to a financial year beginning before 1st January 2016 of an undertaking that is                     a subsidiary undertaking and whose parent undertaking is required to prepare consolidated group accounts in a member State                     other than the United Kingdom.                  

## **PART 1**U.K.REPORT ON PAYMENTS TO GOVERNMENTS

### Duty to prepare report on payments to governmentsU.K.

4.  The directors of an undertaking must prepare a report annually on payments made to governments for each financial year of                     the undertaking (the “report”) if that undertaking is—                  

(a)a large undertaking or a public interest entity; and                  

(b)a mining or quarrying undertaking or a logging undertaking.                  

### Content of reportU.K.

5.—(1) For each financial year, the report must state the following information in relation to the relevant activities of the undertaking—                  

(a)the government to which each payment has been made, including the country of that government;                  

(b)the total amount of payments made to each government;                  

(c)the total amount per type of payment made to each government; and                  

(d)where those payments have been attributed to a specific project, the total amount per type of payment made for each such project                        and the total amount of payments for each such project.                  

(2) Where an undertaking makes a payment that is not attributable to a specific project, that payment may be disclosed in the                     report without splitting or disaggregating the payment to allocate it to a specific project.                  

(3) A payment need not be taken into account in the report if—

(a)it is a single payment of an amount less than £86,000, or                  

(b)it forms part of a series of related payments within a financial year whose total amount is less than £86,000.                  

(4) Payments, activities and projects may not be artificially split or aggregated to avoid the application of these Regulations.

(5) The disclosure of payments must reflect the substance, rather than the form, of each payment, relevant activity or project                     concerned.                  

(6) Where payments in kind are made to a government, the report must state the value of such payments in kind and, where applicable,                     the volume of those payments in kind, and the directors must provide supporting notes to explain how the value has been determined.                  

### Exemption for subsidiaries or parent undertakings included in consolidated reportsU.K.

6.  The directors of an undertaking that is a subsidiary undertaking or a parent undertaking are exempt from preparing a report                     if the payments to governments made by the undertaking are included in the consolidated report drawn up by the parent undertaking                     in accordance with regulation 8.                  

### 

7.  The directors of an undertaking that is a subsidiary undertaking or a parent undertaking are exempt from preparing a report                     if—                  

(a)the parent undertaking is subject to the provisions implementing Chapter 10 of the Directive in any member State other than                        the United Kingdom; and                  

(b)the payments to governments made by the undertaking are included in the consolidated report drawn up by that parent undertaking.                  

## **PART 2**U.K.CONSOLIDATED REPORT ON PAYMENTS TO GOVERNMENTS

### Duty to prepare a consolidated reportU.K.

8.—(1) The directors of a parent undertaking must prepare a consolidated report annually on payments made to governments for each                     financial year of the parent undertaking (the “consolidated report”) if that undertaking is—                  

(a)a large undertaking or a public interest entity;                  

(b)a mining or quarrying undertaking or a logging undertaking; and                  

(c)obliged to prepare consolidated group accounts.                  

(2) A parent undertaking is a mining or quarrying undertaking or a logging undertaking if any of its subsidiary undertakings is                     a mining or quarrying undertaking or a logging undertaking.                  

### Content of consolidated reportU.K.

9.—(1) For each financial year, the consolidated report must state the following information in relation to the relevant activities—                  

(a)the government to which each payment has been made, including the country of that government;                  

(b)the total amount of payments made to each government;                  

(c)the total amount per type of payment made to each government; and                  

(d)where those payments have been attributed to a specific project, the total amount per type of payment made for each such project                        and the total amount of payments for each such project.                  

(2) In this regulation the relevant activities are those of—

(a)the parent undertaking; and                  

(b)any subsidiary undertaking included in the consolidated group accounts of the parent undertaking.                  

(3) Where an undertaking makes a payment that is not attributable to a specific project, that payment may be disclosed in the                     consolidated report without splitting or disaggregating the payment to allocate it to a specific project.                  

(4) A payment need not be taken into account in the consolidated report if—

(a)it is a single payment of an amount less than £86,000, or                  

(b)it forms part of a series of related payments within a financial year whose total amount is less than £86,000.                  

(5) Payments, activities and projects may not be artificially split or aggregated to avoid the application of these Regulations.

(6) The disclosure of payments must reflect the substance, rather than the form, of each payment, relevant activity or project                     concerned.                  

(7) Where payments in kind are made to a government, the consolidated report must state the value of such payments in kind and,                     where applicable, the volume of those payments in kind, and the directors must provide supporting notes to explain how the                     value has been determined.                  

### Exemption from duty to prepare a consolidated reportU.K.

10.—(1) The obligation to draw up the consolidated report under regulation 8 does not apply to directors of—                  

(a)a parent undertaking of a small group, except where any affiliated undertaking is a public interest entity;                  

(b)a parent undertaking of a medium-sized group, except where any affiliated undertaking is a public interest entity;                  

(c)a parent undertaking which is also a subsidiary undertaking, if its own parent undertaking is governed by the law of a member                        State other than the United Kingdom.                  

(2) A group is a “small group” if it consists of parent and subsidiary undertakings to be included in a consolidated report and                     which, on a consolidated basis, meets at least two of the three following criteria on the balance sheet date of the parent                     undertaking—                  

(a)its balance sheet total does not exceed £5.1 million net (or £6.1 million gross);                  

(b)its net turnover does not exceed £10.2 million net (or £12.2 million gross);                  

(c)its average number of employees during the financial year to which the balance sheet date relates does not exceed 50.                  

(3) A group is a “medium-sized group” if it is not a small group and consists of parent and subsidiary undertakings to be included                     in a consolidated report and which, on a consolidated basis, meets at least two of the three following criteria on the balance                     sheet date of the parent undertaking—                  

(a)its balance sheet total does not exceed £18 million net (or £21.6 million gross);                  

(b)its net turnover does not exceed £36 million net (or £43.2 million gross);                  

(c)its average number of employees during the financial year to which the balance sheet date relates does not exceed 250.                  

(4) In relation to the aggregate figures for turnover and balance sheet total—

“net” means after any set-offs and other adjustments made to eliminate group transactions—                  

in the case of Companies Act accounts, in accordance with regulations under section 404 of the Act,

in the case of IAS accounts, in accordance with international accounting standards;

“gross” means without those set-offs and other adjustments.                  

(5) A company may satisfy the criteria contained in paragraph (2) or (3) using either the net or the gross figure.

### Exemption from consolidated reportU.K.

11.—(1) Payments made by a subsidiary undertaking may be excluded from the consolidated report where—                  

(a)severe long-term restrictions substantially hinder the exercise of the rights of the parent undertaking over the assets or                        management of that subsidiary undertaking;                  

(b)the information necessary for the preparation of the consolidated report cannot be obtained without disproportionate expense                        or undue delay; or                  

(c)the shares of that undertaking are held exclusively with a view to subsequent resale.                  

(2) The parent undertaking may only exclude payments by a subsidiary undertaking under paragraph (1)(a) to (c) where the subsidiary                     undertaking is excluded from the consolidated group accounts on the same basis.                  

## **PART 3**U.K.EQUIVALENT REPORTING REQUIREMENTS

### Exemption from duty to prepare reportU.K.

12.  The directors of an undertaking are exempt from preparing a report if—                  

(a)the undertaking is subject to equivalent reporting requirements; and                  

(b)the payments to governments made by the undertaking are included in a report prepared in accordance with equivalent reporting                        requirements.                  

### Exemption from duty to prepare report or consolidated reportU.K.

13.  The directors of an undertaking that is a subsidiary undertaking or a parent undertaking are exempt from preparing a report                     or a consolidated report if—                  

(a)the parent undertaking is subject to equivalent reporting requirements; and                  

(b)the payments to governments made by the undertaking are included in a consolidated report drawn up to the same date, or to                        an earlier date, in the same financial year, by that parent undertaking prepared in accordance with equivalent reporting requirements.                  

## **PART 4**U.K.DUTY TO DELIVER REPORTS AND INFORMATION

### Duty to deliver reportsU.K.

14.—(1) Directors who are required to prepare—                  

(a)a report in accordance with regulations 4 and 5; or                  

(b)a consolidated report prepared in accordance with regulations 8 and 9                  

must deliver that report or consolidated report to the registrar within 11 months of the end of the financial year of the                     undertaking.                  

(2) For an undertaking that is a partnership or a limited partnership, the “financial year” is deemed to be the 12 calendar months                     ending on 5th April.                  

(3) A report or consolidated report delivered under this regulation must be delivered to the registrar by electronic means.

### Duty to deliver equivalent reporting requirements informationU.K.

15.—(1) The directors of an undertaking that is exempt under regulation 12 or 13 from preparing a report or consolidated report must                     deliver to the registrar information contained in any report or consolidated report prepared in accordance with equivalent                     reporting requirements within 28 days after such report is made publicly available under the equivalent reporting requirements.                  

(2) Any document delivered under this regulation is specified for the purposes of section 1105(2)(d) of the Act as a document                     that may be drawn up and delivered to the registrar in a language other than English, but which must, when delivered to the                     registrar, be accompanied by a certified translation into English.                  

(3) Information delivered under this regulation must be delivered to the registrar by electronic means.

### False statement offenceU.K.

16.—(1) It is an offence for a person knowingly or recklessly—                  

(a)to deliver or cause to be delivered to the registrar, for the purposes of these Regulations, a document, or                  

(b)to make to the registrar, for any such purpose, a statement,                  

that is misleading, false or deceptive in a material particular.

(2) Paragraph (3) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 M13 is in force on the day these Regulations are made.                  

(3) A person guilty of an offence under this regulation is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine (or both);                  

(b)on summary conviction—                  

(i)in England and Wales, to imprisonment for a term not exceeding three months or to a fine (or both);                  

(ii)in Scotland and Northern Ireland, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory                        maximum (or both).                  

(4) Paragraph (5) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is not in force on                     the day these Regulations are made.                  

(5) A person guilty of an offence under this regulation is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine (or both);                  

(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum                        (or both).                  

(6) No proceedings are to be brought under this regulation—

(a)in England and Wales except by or with the consent of the Secretary of State or the Director of Public Prosecutions;                  

(b)in Northern Ireland except by or with the consent of the Secretary of State or the Director of Public Prosecutions for Northern                        Ireland.                  

Marginal Citations

M132012 c.10.

### Enforcement of undertaking's delivery obligationsU.K.

17.—(1) This regulation applies where the registrar has reason to believe that an undertaking has failed to deliver a report or consolidated                     report in accordance with regulation 14.                  

(2) The registrar must serve notice on the undertaking requiring it to—

(a)deliver to the registrar—                  

(i)a report or consolidated report in accordance with regulation 14(1); and                  

(ii)a statement to the registrar confirming that the undertaking is required to prepare a report or consolidated report in accordance                        with these Regulations;                  

(b)deliver to the registrar a statement that the period for delivery of the report or consolidated report under regulation 14(1)                        has not expired; or                  

(c)deliver to the registrar a statement that the undertaking is not required to prepare a report or consolidated report in accordance                        with these Regulations.                  

(3) Any statement made under paragraph (2) must state—

(a)the name of the undertaking; and                  

(b)the financial year to which the statement relates.                  

(4) A statement made under paragraph (2)(a)(ii) must state whether the undertaking is required to prepare a report under regulation                     4 or a consolidated report under regulation 8.                  

(5) A statement made under paragraph (2)(b) must state when the period for delivery of the report or consolidated report to the                     registrar under regulation 14(1) is to expire.                  

(6) A statement made under paragraph (2)(c) must state on which of the grounds under paragraph (7) the undertaking is not required                     to prepare a report or consolidated report and any further detail required by that paragraph.                  

(7) The grounds under this paragraph are that—

(a)the undertaking is not a large undertaking or a public interest entity;                  

(b)it is not a mining or quarrying undertaking or a logging undertaking;                  

(c)it has not made any payments to a government that meet the threshold for inclusion in regulation 9(4);                  

(d)it is exempt under regulation 6 (inclusion in a consolidated report), and if so state the name of the undertaking that is                        delivering the consolidated report;                  

(e)it is exempt under regulation 7 (inclusion in a consolidated report of a parent undertaking in a member State other than the                        United Kingdom), and if so state the name of the undertaking that is delivering the consolidated report and the member State                        in which the consolidated report is filed;                  

(f)it is exempt under regulation 10(1)(a) (being a parent undertaking of a small group);                  

(g)it is exempt under regulation 10(1)(b) (being a parent undertaking of a medium-sized group);                  

(h)it is exempt under regulation 10(1)(c) (being a parent undertaking which is also a subsidiary undertaking, if its own parent                        undertaking is governed by the law of a member State other than the United Kingdom), and if so state the name of the undertaking                        that is delivering the consolidated report and the member State in which the consolidated report is filed;                  

(i)it is excluded from a consolidated report because one of the conditions set out in regulation 11 applies, and if so state                        which condition and confirm that it has been excluded from the consolidated group accounts;                  

(j)it is exempt under regulation 12 (preparing a report in accordance with equivalent reporting requirements), and if so state                        which equivalent reporting requirements apply;                  

(k)it is exempt under regulation 13 (inclusion in a consolidated report prepared in accordance with equivalent reporting requirements),                        and if so state which equivalent reporting requirements apply and the name of the parent undertaking delivering the report.                  

(8) If the undertaking fails to comply with a notice served under paragraph (2) within 28 days after the service of such notice,                     an offence is committed by the undertaking and every person who is a director of the undertaking.                  

(9) It is a defence to prove that a director took all reasonable steps for securing compliance with a notice served under paragraph                     (2).                  

(10) Paragraph (11) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is in force on the                     day these Regulations are made.                  

(11) A person guilty of an offence under this regulation is liable on summary conviction to a fine.

(12) Paragraph (13) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is not in force                     on the day these Regulations are made.                  

(13) A person guilty of an offence under this regulation is liable on summary conviction to a fine not exceeding level 5 on the                     standard scale.                  

(14) No proceedings are to be brought under this regulation—

(a)in England and Wales except by or with the consent of the Secretary of State or the Director of Public Prosecutions;                  

(b)in Northern Ireland except by or with the consent of the Secretary of State or the Director of Public Prosecutions for Northern                        Ireland.                  

### 

18.—(1) This regulation applies where the registrar has reason to believe that an undertaking has failed to deliver equivalent reporting                     requirements information in accordance with regulation 15.                  

(2) The registrar must serve notice on the undertaking requiring it to—

(a)deliver to the registrar—                  

(i)information contained in any report or consolidated report prepared in accordance with equivalent reporting requirements;                        and                  

(ii)a statement to the registrar confirming that the undertaking is required to deliver such information;                  

(b)deliver to the registrar a statement that the period for delivery of the equivalent reporting requirements information under                        regulation 15(1) has not expired; or                  

(c)deliver to the registrar a statement that the undertaking is not required to deliver to the registrar any document under regulation                        15.                  

(3) A statement made under paragraph (2) must state—

(a)the name of the undertaking; and                  

(b)the financial year to which the statement relates.                  

(4) A statement made under sub-paragraph (2)(b) must state when the period for delivery of the equivalent reporting requirements                     information to the registrar under regulation 15(1) is to expire.                  

(5) If the undertaking fails to comply with a notice served under paragraph (2) within 28 days after the service of such notice,                     an offence is committed by the undertaking and every person who is a director of the undertaking.                  

(6) It is a defence to prove that a director took all reasonable steps for securing compliance with a notice served under paragraph                     (2).                  

(7) Paragraph (8) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is in force on the                     day these Regulations are made.                  

(8) A person guilty of an offence under this regulation is liable on summary conviction to a fine.

(9) Paragraph (10) applies if section 85(2) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is not in force                     on the day these Regulations are made.                  

(10) A person guilty of an offence under this regulation is liable on summary conviction to a fine not exceeding level 5 on the                     standard scale.                  

(11) No proceedings are to be brought under this regulation—

(a)in England and Wales except by or with the consent of the Secretary of State or the Director of Public Prosecutions;                  

(b)in Northern Ireland except by or with the consent of the Secretary of State or the Director of Public Prosecutions for Northern                        Ireland.                  

### Default in delivering report: court orderU.K.

19.  The court may, on the application of any member of the undertaking or the registrar, make an order directing the directors                     (or any of them) within such time as may be specified in the order to make good a default if—                  

(a)the requirements of regulation 14 or 15 have not been met; and                  

(b)the directors of the undertaking fail to make good the default within 28 days after the service of a notice on them requiring                        compliance.                  

### Directive disclosure requirementsU.K.

20.—(1) After subsection (4) of section 1078 M14 of the Act (documents subject to certain EU disclosure requirements), insert—                  

“(4A)Where a company is required by regulation 14 of the Reports on Payments to Governments Regulations 2014 to deliver to the                        registrar a report or consolidated report on payments to governments, that report or consolidated report.                  

(4B)Where a company is required by regulation 15 of the Reports on Payments to Governments Regulations 2014 to deliver to the                        registrar information on payments to governments which is contained in a report or consolidated report prepared in accordance                        with equivalent reporting requirements (within the meaning of those Regulations), that information.”                  

(2) In regulation 63 of the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 M15 (public notice of receipt of certain documents), before the heading “Registered office” insert—                  

Marginal Citations

M14Section 1078 was amended by S.I. 2012/2301.

M15S.I. 2009/1804, amended by S.I. 2012/2301, there are other amending instruments but none are relevant.

### Review of RegulationsU.K.

21.—(1) The Secretary of State must from time to time—                  

(a)carry out a review of these Regulations;                  

(b)set out the conclusions of the review in a report; and                  

(c)publish the report.                  

(2) In carrying out the review the Secretary of State must, so far as is reasonable, have regard to how the Directive (which is                     implemented by means of these Regulations) is implemented in other member States.                  

(3) The report must in particular—

(a)set out the objectives intended to be achieved by the regulatory system established by these Regulations;                  

(b)assess the extent to which those objectives are achieved; and                  

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that                        imposes less regulation.                  

(4) The first report under this regulation must be published before the end of the period of three years beginning with the day                     on which these Regulations come into force.                  

(5) Reports under this regulation are afterwards to be published at intervals not exceeding five years.

Jo Swinson

 Parliamentary Under Secretary of State for Employment Relations and Consumer Affairs

 Department for Business, Innovation and Skills

28th November 2014

 Regulation 2(1)

## SCHEDULEU.K.Table of activities relevant to the definitions of “logging undertaking” and “mining or quarrying undertaking”

### 

**Annex 1 to Regulation (EC) No 1893/2006**                  

#### Table 1

#### Section A - Agriculture, forestry and fishing

#### Table 2

#### Section B – Mining and quarrying

## Explanatory Note

(This note is not part of the Regulations)

These Regulations come into force on 1st December 2014 and extend to the whole of the United Kingdom, reflecting the extent                        of the Companies Act 2006 (c.46) (“the Act”).                     

These Regulations implement chapter 10 of Directive 2013/34/EU on the annual financial statements, consolidated financial                        statements and related reports of certain types of undertakings F1. Chapter 10 requires certain undertakings active in the extractive or primary logging industries to make and publish reports                        on payments made to governments.                     

Regulation 3 sets out the application of these Regulations. These Regulations will apply to all undertakings in relation to                        a financial year starting on or after 1st January 2015, apart from those undertakings which are subsidiaries of parent undertakings                        who are obliged to prepare consolidated groups accounts in member States other than the United Kingdom. These Regulations                        will apply in relation to financial years for these undertakings beginning on or after 1st January 2016.                     

Regulation 4 contains the obligation on directors of undertakings which are both large or classified as public interest entities                        and active in the extractive or primary logging industries to produce a report on payments made to governments.                     

Regulation 5 sets out the required content of the report. It allows undertakings to disclose payments at the entity level                        rather than a project level where payments are made in respect of obligations imposed at the entity level instead of at project                        level. For instance, if an undertaking has more than one project in a host country, and that country's government levies corporate                        income taxes on the undertaking with respect to the undertaking's income in the country as a whole, and not with respect to                        a particular project or operation within the country, the undertaking would be permitted to disclose the resulting income                        tax payment or payments without specifying a particular project associated with the payment.                     

Regulations 6 and 7 contain exemptions from the requirement to prepare a report. These exemptions are for undertakings whose                        payments are included in a consolidated report of a parent undertaking in any member State.                     

Regulation 8 requires directors of parent undertakings that have subsidiaries that are mining or quarrying undertakings or                        logging undertakings to prepare a consolidated report on payments made to governments if obliged to prepare consolidated group                        accounts under the Act.                     

Regulation 9 sets out the required content of the consolidated report and regulation 10 contains exemptions from the obligation                        to prepare a consolidated report.                     

Regulation 11 provides that payments made by a subsidiary undertaking may be excluded from a consolidated report in certain                        situations, provided that those subsidiary undertakings are also excluded on the same ground from the consolidated group accounts.                     

Regulations 12 and 13 make provision for a further exemption for undertakings from the duty to prepare a report or consolidated                        report under these Regulations where an undertaking has already reported its payments made to governments under equivalent                        reporting requirements in a third-country.                     

Regulation 14 obliges directors of undertakings who are required to prepare a report or consolidated report to deliver such                        reports to the registrar of companies within 11 months after the end of the financial year of the undertaking.                     

Regulation 15 requires directors of undertakings that produce reports in accordance with equivalent reporting requirements                        to deliver the information contained in such reports to the registrar within 28 days of the report being made publicly available                        under the third-country reporting regime. It allows for the delivery of such information to be in a language other than English                        if accompanied by a certified translation.                     

Reports delivered under regulations 14 or 15 must be delivered by electronic means.

Regulation 16 makes it an offence to deliver to the registrar a false, misleading or deceptive document or statement under                        these Regulations.                     

Regulations 17 and 18 create an enforcement regime to secure compliance with these Regulations.

Regulation 19 gives the court the power to order the directors of an undertaking in default of an obligation to deliver a                        report under regulation 14 or information under regulation 15 to make good such default.                     

Regulation 20 makes necessary consequential amendments to the Act and the Limited Liability Partnerships (Application of Companies                        Act 2006) Regulations 2009 (S.I. 2009/1804) to ensure that documents delivered to the registrar under these Regulations are subject to the Directive disclosure                        requirements.                     

Regulation 21 requires the Secretary of State to review the operation and effect of these Regulations and publish a report                        within three years after they come into force and within every five years after that. Following a review it will fall to the                        Secretary of State to consider whether these Regulations should remain as they are, or be revoked or be amended. A further                        instrument would be needed to revoke these Regulations or to amend them.                     

A transposition note is available and is available on www.gov.uk/bis.

A full regulatory impact assessment of the effect that this instrument will have on the costs of business and the voluntary                        sector is available from the Business Environment Directorate, Department for Business, Innovation and Skills, 1 Victoria                        Street, London SW1H 0ET or from www.gov.uk/bis and is annexed to the Explanatory Memorandum which is available alongside the                        instrument at www.legislation.gov.uk.