Insights | November 20, 2019

Cross-border seminar on cross-border investigations, enforcement and compliance risks and their impact on Nordic companies: Key takeaways

Recent investigations by foreign authorities of Nordic companies and financial institutions was one of the topics discussed in two recent cross-border seminars, arranged by Roschier, Paul Hastings and FRA. Also, on the agenda were questions about how compliance risks impact Nordic companies and financial institutions and their foreign subsidiaries and how to deal with these risks in practice.

The speakers included Tom Best and Jonathan Drimmer from Paul Hastings; Derek Patterson, Tytti Saarinen and Viktor Josefsson from Forensic Risk Alliance (FRA); and Ola Åhman, Johan Sidklev, Gisela Knuts, Minna Vammeljoki, Annika Pynnä and Laila Sivonen from Roschier.

Key takeaways

Enforcement landscape. It is a long-standing trend within e.g. the anti-money laundering domain of municipal regulatory enforcement agencies to exercise their investigatory jurisdiction over foreign entities. Companies operating in heavily regulated fields no longer have to relate and adapt to the expectations of enforcement authorities from only one jurisdiction, but often from several. Each enforcement agency operates under different rules and regulations and legal traditions. This leads to an increasingly complicated enforcement landscape, which can be cumbersome to navigate.

Culture-based compliance. Some of the discussions related to how companies should construe their compliance policies in light of this complex regulatory environment and in lieu of legislative predictability. Although well-written compliance policies are important in this respect, creating culture-based compliance among employees is perhaps even more crucial. The experts identified two key drivers for culture-based compliance, namely setting good examples for employees through managerial modelling, and aiming at achieving organizational fairness by, for example, promoting a corporate environment based on a “lack of retaliation” and a “speak-up culture”.

Internal investigations. How should internal investigations be managed that are at risk of becoming “non-internal”? As many compliance officers know, successful intra-company investigations need to consider regulatory scrutiny. This becomes all the more complicated in a cross-jurisdictional context. Companies and institutions need to understand the expectations of stakeholders and how they can be met.

Co-operation with authorities. Different approaches and strategies may be adopted with respect to a company’s decision to self-disclose compliance matters and whether to actively co-operate with the authorities. The chosen approach depends largely on local cultural expectations as well as the legal requirements in the relevant country. With regards to the situation in the Nordics, self-disclosure and co-operation are less regulated than in the US. However, these activities are in line with the pursuit of transparency: an ideal valued by many stakeholders operating in the region.

The panelists were asked to give their tips on how to efficiently handle compliance risks in a cross-jurisdictional context. They agreed that the key considerations are establishing dependable and flexible processes and making sure that they are followed rigorously. Several members of the audience also provided their insight, stressing the importance of connecting with different layers and departments of an organization to raise the prospect of both preventive and reactive compliance work succeeding.