Corporate compliance annual report
Good compliance programmes are a key tool for winning business
The penalties for non-compliance are becoming more severe as the Portuguese government increases efforts to tackle corruption
Sofia Ribeiro Branco
As the Portuguese government steps up the fight against money laundering and corruption , companies increasingly recognise the need for a good compliance programme , the implementation of which can be a highly effective tool for preventing exposure to infractions and “ mandatory for winning business ”, says Sofia Ribeiro Branco , partner at Vieira de Almeida in Lisbon .
“ In Portugal , anti-money laundering ( AML ) and anti-corruption are at the top of the Government ’ s legislative priorities , with new and more demanding AML laws in the process of being approved , which are mostly based on European legislation ,” Ribeiro Branco says . “ In addition , laws related to cross-sector matters such as cybersecurity , competition , privacy , health , safety , security and environment have also been subject to significant change , as has the legal framework in regulated sectors such as energy , banking , insurance , auditing and capital markets .” Ribeiro Branco adds : “ On the one hand , regulatory and criminal penalties are becoming more severe , while on the other , recent legal regimes entail the adoption of written compliance mechanisms and compliance programmes , the breach of which may imply penalties .”
With Portuguese companies now facing severe fines and ancillary actions for breaching compliance obligations , along with a growing trend for potentially affected parties to use regulatory rulings or criminal prosecutions to build up cases against companies found guilty of breaches , compliance is increasingly being used as a strategic tool for doing business , according to Ribeiro Branco . “ Therefore , the way companies approach compliance matters – as perceived by employees , competitors , stakeholders and third parties – may be decisive when it comes to winning or losing business ,” she says . Ribeiro Branco adds that while the potential risks still depend on the business sector , the specific activity of the company and the jurisdiction , lawyers have an increasingly important role to play in designing tailor-made tools “ adapted to those particularities ”.
Change of ‘ company mindset ’ on compliance is vital
Cristina Coto
Spanish businesses often mistakenly think that having a compliance officer and a compliance programme is enough to stop them being held liable for regulatory breaches , but a change of company mindset is also crucial , says Cristina Coto , Partner at CMS Albiñana & Suárez de Lezo .
“ I see too many companies treat a compliance programme as just another legal requirement – they do it , have it and then they put it in a drawer ,” explains Coto . Consequently , not only do companies fail to produce an employee manual suitable for attorneys to use in court , they don ’ t look beyond the bureaucracy and embrace compliance as a social , ethical and cultural requirement , she adds . “ There are too many companies where the director of the legal department is very interested in having the perfect compliance manual but the board of directors don ’ t think the same ,” Coto says . “ For compliance to be successful in a company , the mindset has to change at the top .” This means the role of compliance officer must be taken more seriously too , she adds .
“ Companies believe that having a compliance officer is enough to be safe ,” says Coto . “ In reality , it ’ s a position that needs to be at a high level within the company , with enough autonomy to fulfil compliance objectives .” Another issue is there is still a mindset in which it is assumed that being an ethical company means being free from risk altogether , says Coto . “ Sometimes when we go to Spanish companies to explain compliance and the Spanish Criminal Code , they say ‘ no , that doesn ’ t happen here , we are a good company , we have no risk ’,” she explains . “ They are missing the point , risk is inherent in every company – the objective must be to identify and then mitigate or prevent risk – companies must know their risks and put all their efforts into preventing all of them .”
44 • IBERIAN LAWYER • May / June 2017 www . iberianlawyer . com