In the European Union, the regulatory framework is becoming more complex by every day. The framework is almost unlimited and covers all areas of business activities in all Member States. While a couple of years ago compliance was a term used only in connection with large corporations and financial institutions, now compliance became a reality even for Small and Medium size corporations (SMEs). However, the difference is that one has sufficient finances and capacity to maintain a compliance department, where the other does not. Nevertheless, the legal obligations remain for both.
Thomson Reuters repeatedly published their Compliance Report, in which they survey individuals from Africa, Europe, the Americas, Asia, Australia and Middle East, whereas focusing on financial industry. According to their 2016 Report, compliance officers are still experiencing regulatory fatigue and overload in the fact of ever-changing and growing regulations. Almost two thirds of the corporations are expecting even higher compliance burden in the upcoming year. The most challenging however is the tracing and analyzing of existing and future compliance regulation. Thus, a quarter of firms outsources part or fully their compliance functionality in order to get additional assurance on compliance processes.
It is without doubt that most of these fears are substantiated as greater regulatory harmonization is to be expected, at least in the European Union, but with time also in Canada and the US, as long as the CETA and TTPA become materialized. Outsourcing the compliance will also become the one and only tool for smaller corporations that do not have the capacity to keep a compliance officer or a team thereof for the entire year. To this end however all corporations and managers have to be reminded that liability still remains on their shoulders, possibly even the personal. The time of “foul play” are behind.