12 June 2018

Turning a challenge into an opportunity: compliance for Corporates

Today corporates are expected to have an internal compliance programme in place, bringing challenges, but also opportunities.

Financial crime incorporates many types of activity, including fraud, bribery and corruption, insider dealing, terrorist financing and money laundering. Tackling these illicit activities is a major concern for regulators, and is reflected in new legislation like the EU Fourth Anti-Money Laundering Directive. The focus on financial crime has also resulted in banks – and, increasingly, corporates – incurring large fines.

Compliance for Corporates

While stringent regulations are vital to building a financial system in which all participants can have confidence, the associated compliance requirements can bring a heavy administrative burden and additional costs, as well as delaying corporate banking activities such as opening bank accounts. As a result, there is a clear need for companies to work proactively with their banks and adopt best practices to overcome these challenges.  

Compliance pain points

Today most corporates – at least those active in international trade – are expected to have an internal compliance program in place. Driven by export controls, and particularly the need to monitor exports of arms, military equipment and dual-use goods, firms need compliance policies and procedures in place, including the screening of all aspects of an export.

Such controls fulfil an important need in tackling financial crime. However, the adoption of financial crime screening also brings internal compliance programmes to a new level – not least because treasurers were only marginally involved in this area in the past.

Addressing the challenges

Compliance may bring a number of challenges, but these are not insurmountable. There is plenty that companies and their treasurers can do to ensure compliance with the necessary rules, despite the many pain points.

For one thing, it is important to address the challenges proactively. This might include putting suitable training in place across the organisation. Companies may also need to appoint a compliance officer, or give another individual in the company responsibility for compliance topics.

Read further about how corporates can address compliance challenges and transform these into real opportunities.  
 

Full article first published in TMI edition 260.

Financial Crime Compliance: A Growing Challenge for Corporates

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12 June 2018

By Jutta Demant, Franz-Xaver Puy Michl and Thomas Woelk, Members of the Cash & Liquidity Ressort of VDT e.V. and of the EACT – Fraud working group

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