Introduction
In order to provide an appropriate answer to this question, it is first necessary to define what is a “compliance program”. One of many possible definitions could be that of a “guidance system to prevent and detect companies’ regulatory breaches.” Nonetheless, how does it apply and what is it for? ¿Does it affect all laws or only criminal laws?
Subjects covered
First of all, “compliance” is a term used in various contexts, such as “corporate compliance” or “tax compliance”, all of them being a correct use of the term. The truth is that the compliance system can be enhanced to the extent that the organization deems it necessary. Namely, it is possible to make the system cover the prevention of tax, criminal and other violations that are of interest. In Spain, since the modification of the criminal code in 2010, along with the new wording of Article 31-bis of the Criminal Code, there should at least be a compliance program to cover crimes attributed to legal entities in place.
What is it used for?
From a criminal perspective, the compliance program can be used to remove the company’s responsibilities in the event that it was indicted for a crime committed within. In other words, there are certain crimes that, if committed within the company by its workers or managers, for their own benefit (understood to be in the company’s benefit), this can be brought as a criminal charge. Thus, having an efficient compliance program –and I stress “efficient”–, may serve for the company to remove its criminal responsibilities.
From a more general perspective, a compliance system can be much more useful. Nowadays, well implemented compliance systems are helping companies create greater efficiency, besides having an added value in terms of reliance and transparency. Last but not least, compliance control is becoming increasingly present in best practice standards.
How is it implemented?
A compliance system affects the entire organization to a greater or lesser extent. The commitment of the management is necessary, as well as fostering a culture of compliance within the company. This commitment and culture will be reflected in policies on larger or smaller scales. On the other hand, the compliance system has procedures and controls that influence the company’s day-to-day operations (channel for complaints, prevention course, etc.).
Conclusion
Therefore, the compliance system involves implementing a series of procedures and controls that are derived from the management’s commitment and compliance culture. It can be extended to the field of criminal law or to any other regulatory field affecting the company. If the program is efficient and only covers crimes, it can be used as an exculpatory in case of indictment of a legal entity. If it is further extended to other regulatory branches, it would allow companies to offer greater guarantees of regulatory compliance, and all that this implies in the market.
Vilá Abogados
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3rd July 2015
