Legislative News | Collision

Search Autoparts/Aftermarket-business/Legislative-news-collision/

A united compliance approach

Friday, April 22, 2011 - 00:00

Companies that operate abroad are aware that the U.S. government increasingly is focusing on laws that govern extra-territorial conduct by U.S.-based multinational corporations. This trend of increasing exposure to multiple regulations should raise concerns at all U.S.-based aftermarket companies that operate abroad because the U.S. government is looking at these laws in an integrated fashion that multiplies the risks for multinational corporations. With the government taking a more global view of the Foreign Corrupt Practices Act (FCPA), and the export controls, economic sanctions and anti-boycott regulations, multinational aftermarket exporters also need to be taking an integrated approach to compliance. Handling all international areas together has a number of compliance advantages, including:

  • ν Common procedures. Employees are busy, and compliance usually is not their primary focus. Creating one set of procedures is advantageous from implementation, training and operational standpoints.
  • Cross-fertilization. Integrating compliance reveals cross-trends, for example, FCPA controls for government officials can reveal illicit contracts; know-your-customer guidelines can reveal FCPA risk areas, and so forth.
  • Implementing best practices. An integrated approach allows for the implementation of best practices quickly across an entire organization.
  • Ease of auditing. The growing trend is for companies to perform periodic audits to confirm that well-conceived programs are being followed on the ground and to nip small problems before they become systemic. An integrated approach leverages audit capabilities across compliance areas.
  • Increased visibility for compliance. Traditional problems of getting companies and employees to take compliance seriously, and not just to treat it as a cost and distraction from making sales, are naturally combated by creating a centralized and higher-visibility compliance function.
  • Ease of board-level monitoring. Compliance needs to jostle with strategic concerns for board-level attention. Integrated compliance allows for the systematic presentation of compliance-related information to the board of directors, surely a strong consideration with Sarbanes-Oxley increasing the requirements of board-level monitoring.
  • Viewing compliance and risks as the U.S. government does. Although the U.S. government splits enforcement authority between multiple agencies, when problems arise, the government brings together the regulators in joint indictments and settlement discussions that cover multiple problems. It is a definite advantage to be identifying risk and engaging in risk mitigation in the same way that the government does.

Similarly, taking a integrated approach to compliance across geographic regions also has a number of advantages, including:

Print Article
< Previous
Next >
blog comments powered by Disqus