IS YOUR COMPANY RISKING NONCOMPLIANCE?

7 TACTICS TO PROTECT AGAINST FINES AND REPUTATIONAL DAMAGE

www.complyglobal.com

In a Mondaq article titled, “The Consequences Of Non-Compliance In Global Business,” authors Richard

Cantor and David Lewis of BDO International shed some light on the main factors that are making it difficult

for you to stave off the risks of noncompliance:

“Compliance regimes can be simple or complex, but more than anything they are varied. Furthermore, many territories change their filing regulations frequently, and without a contact in the country, it can be difficult to keep abreast of these changes. Therefore, the highest barriers to a truly centralised finance function are the problem of scalability, and the continued need to rely on local expertise. Without that key local knowledge, businesses can run foul of laws entirely unintentionally – but the consequences could still be strict.”

Without a proper approach to organizational compliance, you risk not only incurring compliance fines, but

also permanently damaging your reputation.

The following seven steps are critical elements of managing the compliance regulations impacting your

business as well as reducing the risk of fines, penalties and reputation damage from compliance violations

in global operations.

Compliance challenges for multi-national companies are becoming more complex on a daily basis. Government authorities in many countries continue to increase their monitoring of compliance and are accessing fines and penalties more frequently. The related funds are often an important element of what these companies require to sustain their various activities. In this ‘new normal,’ building the capability to adhere to continuously evolving regulations is essential. Your ability to succeed in growing business abroad hinges on many factors, but this is clearly a key factor.

www.complyglobal.com

1. UNDERSTAND THE NEED FOR PROACTIVE COMPLIANCEProactive compliance is your greatest tool to

combat noncompliance. There’s a significant

difference between reacting to compliance

violations when they occur and taking steps to

avoid these violations. In many cases, regulators

will be much more punitive when a violation

occurs and they believe the company has not been

proactive. In general, being proactive involves

steps such as:

• Establishing clear policies and procedures that require company personnel to follow all

applicable rules and regulations

• Communicating those policies and procedures, in local languages, to company personnel in

global locations

• Conducting both initial and ongoing training to be sure company personnel understand

applicable rules and regulations

• Having appropriate infrastructure in place to: disseminate applicable rules and regulations to

your various global jurisdictions; address compliance questions as they arise (e.g., a help desk);

and monitor compliance activities as they occur and, more importantly, when they don’t occur

It’s nearly impossible to stay compliant when tasked with meeting compliance deadlines only weeks

in advance. Staying compliant and avoiding costly fines takes a proactive, streamlined approach to

global compliance. Proactive compliance is a marriage between understanding the current compliance

requirements of each of your legal entities and managing steps your people are taking to comply with

those requirements, including maintaining a calendar of compliance reporting deadlines.

2. STAY CURRENT ON COMPLIANCE REGULATIONSAs Cantor and Lewis detailed, compliance regulations are in constant flux. It can make staying up to date

incredibly challenging – but essential nonetheless.

When you’re operating in a global market, acquiring companies, merging with others or investing in new entities,

it’s difficult to know all that you must comply with, and what those regulations are. You must have a means by

which you understand everything required of your organization and how you need to fulfill those requirements.

www.complyglobal.com

In the case of mergers and acquisitions, your most

realistic options are outsourcing your compliance

management to a consulting firm or leveraging

a software solution that identifies compliance

updates for you.

3. ESTABLISH A COMPLIANCE SCHEDULE AND STICK TO ITLearning the most current regulations is step one,

but your knowledge means little if you’re unable

to meet your reporting deadlines. Invest in an

organizational compliance calendar. A tactical

schedule is foundational to proactively complying

with global regulations on your operation.

The most effective compliance calendar is technologically driven and intuitive, empowering you to work

as far ahead of scheduled deadlines as possible. A smart calendar is self-maintaining, meaning it auto-

populates compliance demands and updates your compliance schedules without need for your oversight.

While fundamental, creating a proactive compliance calendar is only one part of the solution. You must

adhere to the schedule outlined by your calendar to ensure that nothing is overlooked. Make sure your entire

team is working with this calendar in mind, tackling the scheduled tasks and monitoring it frequently to stay

ahead of upcoming events.

4. SCALE YOUR COMPLIANCE EFFORTSUnderstanding the ins and outs of your organizational compliance efforts is critical, but you must invest

in backing up your compliance roles. Training other team members to manage and fulfill your compliance

demands not only gives you extra resources to handle these requirements should an assigned individual

be unavailable, but also provides additional sets of eyes to monitor your global compliance calendar and

remain proactive. Educate others on your team about your compliance processes and ensure that there are

always human safeguards against noncompliance.

www.complyglobal.com

5. DOCUMENT EVERYTHINGDocumentation is critical to proper compliance.

You must document everything to prepare for the

possibility of being audited or having to train new

hires on your processes. Secure documentation

is essential to legal diligence and a safeguard to

address regulators’ questions when searching for

evidence of noncompliance.

Advancements in web-based compliance solutions

have led to the prominence of cloud technology.

Storing all of your documents in a cloud database

is ideal, giving your team safe access to compliance

information from anywhere across the globe.

6. PROMOTE TRANSPARENCYStricter compliance penalties now include personal liability. You, other management members and your

board may be held personally responsible for compliance violations. They need to be fully aware of your

current efforts to avoid any violations.

Provide regular updates on your global compliance practices and frequent snapshots of your compliance

calendar. These snapshots should be tailored to share only relevant information with your various internal

stakeholders. Transparency offers peace of mind to everyone responsible for compliance, whether they’re

managing compliance regulations daily, proving compliance in the event of a merger or acquisition or

answering to regulators regarding your overall compliance picture.

7. EXPLORE WEB-BASED OPTIONSCloud-based compliance solutions streamline many of the time-intensive aspects of proactive compliance,

such as creating a calendar and monitoring global compliance regulations. With digitized records, forms and

files, exhaustive paperwork is unnecessary. Your time is better utilized managing your compliance efforts and

helping your business grow rather than executing tactical demands.

The fear of noncompliance and its consequences is understandable – but noncompliance is preventable. Enact

these principles of proactive compliance and you’re more likely to succeed in building a global business.

www.complyglobal.com

Interested in learning more about how to improve your organizational compliance efforts? Contact ComplyGlobal today to learn how to start on the path to proactive compliance.

www.complyglobal.com