Definition and Concept of Compliance

The English term compliance, or conformité in French, refers to abiding by internal and external standards of businesses (best practices, Code of Ethics, anti-corruption, prompt risk prevention at the workplace, data protection, money laundering, etc.). Compliance with these rules can prevent and avoid tortious conduct by companies, among other offences.

The concept of compliance was implemented in the 70s and 80s in the United States as a result of major financial scandals involving egregious corruption that affected several large corporations For example, the Lockheed Corporation scandal with the bribery of foreign officials.

In turn, Spain has incorporated the concept of compliance into its legal system through several laws, particularly concerning data protection and money laundering.

More recently, the reform of the Spanish Penal Code has emphasized the importance of such a concept. Indeed, to regulate the criminal liability of corporate entities, the Code notably specifies the monitoring obligation that weighs on businesses and that the failure to perform this obligation may result in criminal liability.

Thus, the importance of the concept of compliance is assessed on several levels:

Legal level: respect for the law

One must take into account the changes introduced in the Spanish legislation and the resulting obligation for companies to act according to new legal standards.

The legal ramifications of the directors or employees breaching these standards fall on the company unless it can prove to have put in place the necessary means to prevent misconduct.

For a company not to be held liable, it must do the following:

  • Unify the criteria for action
  • Organize training of its staff
  • Establish a monitoring system
  • Identify the sources that increase the risk of tortious offences
  • Work jointly with legal counsel

Regulatory level: observing technical, environmental, product safety regulations, etc.

Social responsibility: act following the code of good practices, set up authorization procedures (due diligence), supervision, enforcement, information and control.

At this level, compliance requires that companies be responsible by not only conforming to the standards but by also keeping in mind the spirit and purpose of the regulations. Instead of compliance, Social Responsibility is closely linked to the concept of ethics that wants to prevent to use of the law for diverted purposes.

Ines Ducom & Nicolás Melchior

For further information regarding compliance in Spain,

Please note that this article is not intended to provide legal advice.

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