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7 Things Your Business Should Do Now To Avoid Non-Compliance Issues

Non-compliance issues! No matter what stage your business is in, you will need to work on your business. However, you will also want to spend time on other essential things. The US corporate compliance world is fraught with regulatory threats.

You should be aware that many industries will have different forms of compliance that are specific to them. However, by the end of this post, you will learn some essential things that you must do to avoid issues surrounding non-compliance that are relevant to most businesses.

Compliance With Business Regulations Is Important

With the increasing number of regulations, business owners have to be more careful about what they do. They have to make sure that they follow the standards and laws of the particular country they are taking their company in. A growing number of businesses require compliance with a legal framework to conduct their operations. In general, these companies need to comply with the local rules and regulations of any given country. Anyone operating any business size cannot ignore the importance of complying with business regulations.

Most countries have set up laws and regulations for businesses and other entities. These abide by specific practices and codes. Compliance with these laws ensures the smooth running of particular procedures and activities. The US Chamber of Commerce has stated that companies must comply with the law. If companies and entrepreneurs know their limitations and those of their competitors, they will play fair in the market and make sure that they succeed. There are many cases where companies are penalised if they do not comply with the law. Therefore, the cost of compliance management can be significantly reduced when you factor in the penalties associated with non-compliance. Not only can non-compliance negatively impact you financially, but in some cases, it can even affect your brand. Are there any ways you can ensure your company complies with the various regulations that exist? Fortunately, there are many things that you can do, some more complex than others, but all of them are in your best interest.

Identify The Regulations That Affect Your Business

Regulations are essential because they provide clarity and transparency in the market. They also protect consumers from harmful actions and give their business an edge by providing a competitive advantage. With this in mind, your first step should be to investigate which regulations apply to your industry specifically. While many apply to businesses as a whole, some will be niche-specific. For example, a financial company may be required to comply with regulations surrounding the amount of money they can lend to a specific demographic (to avoid negative outcomes, etc.).

On the other hand, payment processing companies may need to implement specific policies to protect customer data in case of a data breach. Lastly, there are the general regulations that all businesses must follow, such as employment regulations, hiring practices, and so on. Once you are aware of the rules specific to your business, you can begin to implement them as best as possible.

Educate Your HR Department (Employment Regulation)

In the United States, workers are guaranteed certain rights and benefits by law. These benefits include protection from discrimination, fair compensation for work, and a safe workplace. An employee needs to be provided with a written contract in the US before accepting a job offer. This contract explains what tasks they will require in their new position and any other terms that you might include in their employment agreement. Compliance is important because it provides protection from discrimination and ensures that employees are being compensated fairly for their work. You can go some way to avoiding employment non-compliance by keeping your HR department updated on the latest laws and hiring best practices.

Develop A Practical Method For Achieving And Maintaining Compliance

The success of a practical compliance program depends on a company-wide ownership effort. To achieve compliance, people from all levels of the organisation should work together. Train employees to make good compliance decisions and reward those who go the extra mile to ensure compliance. Ensure you are familiar with what is happening on the front line, not just what you hear. People don’t always do what they say they’re doing, so what they’re saying isn’t actually happening. As a result, you might be in for a nasty surprise when something goes wrong.

Submit Reports On Time

Whatever reports are relevant to your business must be submitted on time. Prompt submission is an easy point to accomplish but one that is often overlooked. Many companies make the mistake of leaving these reports to the last minute, but this could result in errors and possible repercussions.

Stay Up-To-Date On Changes In Compliance

Businesses tend to forget about current rules, especially smaller operations with fewer employees. However, it is in your best interests to remain abreast of the latest changes in law. The easiest thing to do is to assign someone within your organisation as a dedicated compliance officer whose job is to ensure you stay within the law at all times.

Maintain Good Relations With Your Regulatory Agency

Everyone has a job to do, and you will make no friends by constantly haranguing those whose job it is to ensure compliance. While you don’t need to become best friends, maintaining good relations is in your best interest. You can do this by submitting reports on time, allowing easy access to inspectors, and continuing an open line of communication.

Improve Your Program Through Continuous Improvement

It is the job of regulatory agencies to ensure you comply with regulations, but it is your job to be proactive in their implementation. This is another job you can assign to your compliance officer, but you as a business owner must also retain some level of responsibility.

No matter what industry your business is in or what industry your business is going into, you should always take the time to learn about whatever rules and regulations may apply to your industry. Stay up to date, learn about which rules are specific to your industry, and be as facilitating as possible to the agencies in charge of their enforcement.

Product Liability Lawyers Join DLA Piper in LA

DLA Piper law firm announced today that Jayme Long has joined the firm’s Litigation and Regulatory practice as a partner based in Los Angeles.

Long is a first-chair trial lawyer who defends companies faced with complex litigation matters in a broad array of areas, including product liability, premises liability, mass torts and commercial litigation. She represents companies in the energy, chemical, manufacturing, safety and maritime industries in state and federal courts across the country.

In addition to Long, of counsel and certified appellate specialist Justin Sarno and associates Stephanie Peatman and Alexander Giraldo have also joined the Litigation and Regulatory practice in Los Angeles, along with paralegal Hannah Ali and trial assistant David Mitchell.

“Jayme is a deeply experienced trial attorney with an incredible range, demonstrated by a strong understanding of scientific and complex legal issues and an excellent track record in the courtroom. She and her team will add significant value and depth to our capabilities, allowing us to better serve the needs of companies operating in a wide range of sectors,” said James Brogan, United States chair and global co-chair of DLA Piper’s Litigation and Regulatory practice.

“I have followed the growth of Jayme’s practice for years and am very excited that she is joining DLA Piper. She and her team complement and expand our product liability and commercial disputes offerings on the West Coast, and her addition demonstrates our continued dedication to growing our presence in Southern California,” said Angela Agrusa, managing partner of the firm’s Los Angeles offices.

Long joins from Dentons United States LLP. She received her J.D. from Pepperdine School of Law and her B.S. from San Diego State University.

The case for regulatory-driven diversification in Ship Finance

A decade ago, we all knew of at least one shipping company that felt safe receiving its debt financing from a single source (a behaviour that was, unfortunately, encouraged by some bankers), and eventually experienced immense pain when some key-lenders abruptly withdrew from ship financing.

Back at that time, sourcing finance from a handful of different – typically European – banks (as opposed to, from a single one), was considered a sound approach to funding diversification, since the key driver for a Bank’s approach to lending was its own business policies and individual circumstances.

That was then. Next, the banking crisis happened. And then the shipping one followed… Both led to (a) an increased regulatory attention to bank-lending towards the shipping industry; and (b) the regulatory framework being the dominant parameter shaping each Bank’s business activity.

One unsurprising consequence of the above was that (European) bank lending, when it came to shipping, became much less abundant. A second, and initially less anticipated, change was that the approach of lenders, regulated by the same regulator, became significantly more homogeneous. A shipowner friend recently confided to me – half-seriously, half-jokingly – that “if I remove the bank logos from the term sheets I receive, I cannot really tell which-one sent me which.” This is mostly the result of the tighter regulatory framework under which European banks are operating and, jokes aside, highlights the need for regulatory diversification.

Given the importance that debt capital has for an industry as capital-intensive as shipping is, no shipping company can afford all of its lenders to operate under the same regulatory framework. Were it to do so, the result might be that next time something important happened, its lenders would be highly likely to change their views about their shipping exposure at the same time and in the same way. It is like operating a VLCC in high-seas, with no internal bulkheads limiting cargo shifting around: you don’t want to be on it when the wind starts blowing hard…

Thankfully, the alternative financiers, who flocked-in during the last few years, are a crowd made-up by highly different animals. We can hence observe “blocks” of lenders, each defined by the main regulator they operate under, with their respective members behaving in a correlated way. European banks are such a block, with a couple of sub-blocks, defined by the risk-rating model each bank uses to rate its obligors.

Another block are the Chinese financial institutions, another are the Japanese, each having different local regulatory frameworks and/or adopting global ones (like Basel IV) at a different speed than their European counterparts. An additional regulatory diversification bonus comes from the different local central banks’ monetary policies and the impact these have on respective lenders’ balance sheets and capacity to lend.

There is, of course, the block of lenders that are completely untouched by lending regulatory frameworks, such as the various credit funds: their activity is, of course, also contingent on market realities, views, models and limitations but – and this is the key issue here – these are different from the ones traditional financiers have.

The optimal mix of funding sources is a moving target, given the constantly changing finance scene, and also it differs from company to company, depending on parameters such as fleet size, corporate structure, or employment profile (but also some more nuanced ones like specific industrial relationships). A ship-finance specialist, whether internal or external to the company, can be the key for keeping this mix as-close-as-possible to optimal at all times.

Some might argue that the above approach is an expensive one: “I have a financier who provides me with a very competitively priced product, and I feel comfortable with him” or “Why start a new relationship with a geographically/culturally distant and/or more expensive lender?” are comments sometimes made.

In a nutshell, the answer is that diversification, even at some cost, works like an insurance policy. For an industry that has grown up having insurance at its heart (who can imagine shipping without it…) the concept of paying what could appear to be a ‘premium’ to hedge against a known and accepted risk (that of lack of financing), but which could pay-off in multiples later on, should not be that strange.

The ship financing scene is trying to find again its balance, while overall volatility in the finance world is increasing. Seeking regulatory diversification of funding sources might prove to be an efficient way to avoid “déjà vu all over again” as dear old Yogi Berra would have put it…

Dimitri G. Vassilacos is a Partner at Ship Finance Solutions (SFS), a boutique financial consulting firm specializing in the shipping sector. Prior to that he had assumed a variety of positions during a 20-year-long career in the banking sector, including Head of Greek Shipping at Citibank and Manager of the Shipping Division at National Bank of Greece.