SOLID FOUNDATIONS: BETTER ETHICS AND COMPLIANCE PROGRAMMES
Companies today are under increasing pressure to comply with an ever-growing framework of regulations across the various jurisdictions in which they operate, or risk damage to revenue, operations and reputation arising from compliance failures.
The threat level that organisations face continues to intensify, with traditional challenges being supplemented by emerging risk areas. In recent months, a few of the most pressing issues have centred on trade sanctions following Russia’s invasion of Ukraine, the expanding focus on environmental, social and governance (ESG), as well as a patchwork of overlapping privacy laws. Companies have had to quickly adapt to a wide spectrum of fast-moving regulatory developments.
A shifting regulatory landscape
Western countries responded to Russian hostilities in Ukraine by introducing a raft of heavy trade sanctions designed to weaken, if not cripple, Russia’s economy. For companies, the immediate risk was ensuring their operations and transactions did not inadvertently breach the new laws by dealing with prohibited entities or individuals. “Trade sanctions compliance has taken on even greater significance in the past several months with heightened sanctions relating to Russia and, because certain sanctions target Russian financial institutions, increased risks have arisen with respect to clearing transactions,” points out Brock Bosson, a partner at Cahill Gordon & Reindel LLP.
For Adam Turteltaub, chief engagement & strategy officer at Society of Corporate Compliance and Ethics & Health Care Compliance Association, complying with Russia-related economic sanctions is not always straightforward. “Determining who is the ultimate beneficial owner of a business can be quite difficult, especially in regions where there is poor visibility into these issues,” he says. “But we cannot lose sight of the fact that there is enhanced coordination of enforcement by prosecutors. A misstep could lead to enforcement actions in multiple jurisdictions simultaneously.”
Oct-Dec 2022 Issue
Richard Summerfield