On July 10th The U.S. Department of Treasury on Wednesday issued an interim final rule requiring, among other things, that financial institutions receiving funds from the Troubled Asset Relief Program funds adopt policies concerning “excessive or luxury expenditures”. These policies are designed to ensure appropriate review and approval of such expenditures, including the use of “aviation or other transportation services” (i.e. company aircraft). Companies are required to post these policies online.
As part of the proposed rule, TARP beneficiaries must:
· Identify the types or categories of prohibited “luxury” expenditures (in terms either of the total amount spent for particular activities, or maximum amounts per employee for such activities);
· Set forth reasonable approval procedures for such “luxury” expenditures;
· Require the CEO or CFO affirms that the approval for such expenditures was properly obtained according to that company’s procedures (not unlike changes introduced by Sarbanes-Oxley, requiring executive-level approval of company financial statements);
· Require internal reporting of violations of these policies.
The Interim Rule calls for the creation of a new “Office of the Special Master for TARP Executive Compensation” to review compliance to the compensation and corporate governance rules. The Interim Rule is open to a public comment period that will run for 60 days once the rule is filed in the Federal Register. Few commentators expect material changes.
Mr. Ari Good, JD LLM practices in aviation taxation, corporate and partnership tax, international taxation and in representing clients before state and federal taxing authorities. He has closed over one hundred aircraft transactions involving everything from light sport aircraft to Fortune 100 business jets. Mr. Good supports aircraft dealers, brokers, flight schools and commercial operators worldwide in operational, regulatory and compliance matters. Call (239) 216-4106 and visit www.goodattorneysatlaw.com.