ADVERTORIAL

Compliance is not “compli-cated”, but rather “compl-ex”

It´s the utmost obligation of all compliance officers to start implementing compliance procedures in corporation life effectively.

In April, the Criminal Division of the U.S. Department of Justice (the “DOJ”) updated its Guidance Document in order “to assist prosecutors in making informed decisions as to whether and to what extent the corporation´s compliance program was effective”[1].

The document explains that there are three fundamental questions a prosecutor should ask when investigating a corporation, determining whether to press charges, and negotiating a plea or other agreements:

  1. Is the corporation’s compliance program well designed?
  2. Is the program being applied earnestly and in good faith? Is the program being implemented effectively?
  3. Does the corporation’s compliance program work in practice?

Lucie Schweizer is a partner and head of the Compliance team at RUŽIČKA AND PARTNERS law firm. She deals with compliance on a long-term basis. She starts under the cover of Corporate Governance, and then under the form of recognized Corporate Designs and Strategies. When asked why she is dealing with this issue, she replied: ‘‘I enjoy contributing to business environment cultivation. Compliance is one way to do it.“

DOJ is the top authority worldwide that applies the harshest sanctions and the most sophisticated approach, and for me personally, it is a great inspiration when thinking about compliance.

In Slovakia, we often face a very different approach from the authorities – one that is bureaucratic, formal and unfortunately unprofessional. So, when reading through the DOJ´s Guidance Document, it made me think,
“Why is this so? What is the root cause?”

Bearing in mind the different legal frameworks
and systems, the answer was obvious and almost instant – the legal regulation is formally written and there is a reluctance to look for the purpose and to apply constant efforts to interpret the legal regulation in line with the purpose.

The implementation of law in our region (whether by courts or other authorities), was very precisely described by Pavel Holländer, a philosopher and brilliant legal professional: “the mechanical identification of law with legal texts became a welcomed tool for totalitarian manipulation. It has made the justice system a submissive and unthinking tool for advocating totalitarianism. This is also why the mechanical application of law, abstracting from the purpose and intent of the legal norm, shall create a tool for legal alienation and absurdity.”

And this is exactly what is happening in compliance as well. The interpretation of legal norms by the relevant authorities is often absurd, and even the most sophisticated corporations suffer from its ineffective implementation due to strict requirements required/imposed by the authorities.

The result of this is not surprising. There are many companies on the market that issue hundreds of strict internal regulations (along with updates) and thousands of pages of employee obligations, all compliant with the current legislation status. However, there is also a lack of willingness to know the rules or to follow them among the relevant employees.

It is the utmost obligation of all compliance officers to start implementing compliance procedures in corporation life effectively. This results in a return to the basics and addresses the very same questions suggested by the DOJ for its investigators.

Jaroslav Ružička is the managing partner and one of the founders of the firm. During his career, he has worked on many matters related to real estate and construction law. He also has rich experience in corporate transactions, company acquisitions, infrastructure projects and public-private partnerships. His focus is on tangible and procedural administrative law, which he also dealt with in the field of legal theory, university law education and government legislation before setting up his private law practice. Ružička also provides advisory services for foreign investors who intend to enter the Slovak or Czech markets.

The Guidance Document provides hints on how to evaluate, what to ask, what to focus on and what to think about. And yes, it is also the job of every compliance officer to stand up for its results and arguments effectively before authorities and/or the court. Only in this way can we all step out from the darkness of the totalitarian application of law in compliance.

Compliance is not complicated, but we are often afraid to go further, to dig into the purpose, provide for argumentation, and think outside the box, because it is just so easy to draft another document exactly as the law stipulates and the work is done. Lawyers are no exception. So, let’s think complex. Let’s think in context, and, most importantly, let’s have an answer to “why” we are doing it.

The implementation of any compliance norm while abstracting from the purpose and intent of the legislative framework is just another brick in the wall of compliance ineffectiveness.

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[1] https://www.justice.gov/criminal-fraud/page/file/937501/download

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