The following is an excerpt from a roundtable discussion on investigations and global compliance with four partners from Clifford Chance LLP.
Q: How do global companies cope with differences in the legal or regulatory schemes of various countries?
A: That comes up a lot because there are inconsistencies in regulatory schemes. A company’s actions may be perfectly compliant in one country; however, if the company establishes new operations in another country with stricter laws, its compliance plan must be adjusted to address the tougher restrictions. A common strategy is to conform a broad company policy to the requirements of the strictest constituent country and then apply it across the board. We’ve also helped clients develop a global compliance plan, from which we’ve adapted individual plans for each country. The latter strategy is very difficult to manage, but for some companies, it’s the only realistic way to get the job done.
The key is to recognize that local laws have to be addressed and that blanket compliance plans can be unrealistic and place the company at risk. Moreover, complying with data requests from U.S. authorities in violation of EU data privacy laws, or restricting trade with Cuba in violation of the blocking statutes of any number of countries, has brought huge compliance headaches until there is a careful weighing and measuring of the risks. Clifford Chance has offices in many different countries with experts who have knowledge and experience in the local laws; thus, we can ensure that our compliance plans comprehend local laws and regulatory requirements. For a company facing enforcement action in Asia, the defense should never be “well, I complied with the UK law.”
Click here to read the complete roundtable discussion published by The Metropolitan Corporate Counsel.