Transformation of Compliance in a New Environment

This was discussed by the participants of the Compliance Club of the National Research University Higher School of Economics at the regular meeting of the Club on June 21, 2022. Representatives of companies and invited experts shared their views on how compliance is changing in the new environment, their experience in overcoming difficulties, defined the possible development strategy, goals, and objectives of the compliance function in the new environment.

The speakers were:

Eduard Ivanov, Professor, Faculty of Law, National Research University Higher School of Economics, Academic Head of the Master's Program "Compliance and Prevention of Legal Risks".

Sergey Taut, Deputy Head of PULAP, expert of the Pepeliaev Group, Associate Professor at the Faculty of Law of the National Research University Higher School of Economics.

Leida Lukyanova, Vice President for Business Ethics and Compliance of MTS.

The moderator of the Club's meeting was Dina Krylova, Head of the Laboratory of anticorruption policy, Public Ombudsman for Combating Corruption under the Presidential Commissioner for Entrepreneurs' Rights, who pointed out that despite the difficult circumstances on the market and the violations of the declared ethical and legal standards that we observe everywhere, it is important to maintain the determination to implement compliance principles in the organizations.

Eduard Ivanov pointed out in his speech that there is a strong emphasis on anti-corruption measures due to the lack of resources, and the need to implement anti-corruption compliance primarily in companies with state participation. For example, Russia participates in anti-corruption meetings in BRICS and shares its experience in implementing anti-corruption compliance. Eduard Ivanov also noted the new anti-corruption legislation in Kazakhstan, which provides for mandatory implementation of anti-corruption compliance measures in companies with state participation. He also noted the importance of anti-corruption compliance in the financial and credit sector to prevent the implementation of criminal schemes. Speaking about international cooperation, he mentioned the banks in the Arab region that are building a positive image of a reliable partner in the banking sector and are complying with all the anti-corruption compliance norms. In addition, Eduard Ivanov, told that a lot of attention is paid to the anticorruption compliance and elaborated on approaches that are used in this sphere.

Sergei Taut drew participants' attention to the fact that the role of compliance in the current environment, in times of uncertainty and turbulence, is only increasing. The cost of mistakes increases many times over, so it is better to prevent the risks associated with compliance in advance. As an example of such risks we can mention the 'loud' statements made by western companies that have representative offices in Russia. These representations may suffer serious damage because of their statements, if they do not take into account the changing legislative environment in the country. In particular, it is proposed to introduce a bill supplementing part 2 of Article 201 of the Criminal Code "Abuse of authority" with a ban on compliance with Western sanctions by all companies operating in Russia. Failure to comply with the requirements of this article may result in a penalty of 10 years' imprisonment. 

Leida Lukyanova believes that in spite of the situation of turbulence and lack of stability, the requirements of the regulators remain the same. The speaker noted that the focus is now shifting to those areas which have not been in the zone of compliance or have not been developed. The important point is that compliance functions, despite their supporting nature, are subject to constant updates and risks are subject to revision. Legislation must be monitored in order to make timely changes in the design of controls and business processes. In a situation of new challenges to be met, specialists must learn to adapt. There is already a search for a new market with a focus on the Eastern direction, where there are both new perspectives and new corruption, which has its own distinctive features from region to region. Compliance functions must be adapted in order to react quickly and have time to change. The speaker paid special attention to intra-company communication, which is one of the key issues in support of ethical business, because coordination within a company helps not to miss anything and not to violate the requirements of regulators.

Alexander Rusetsky, Deputy General Director for Compliance of Autonomous Non-commercial Organization "Moscow Transport Service Directorate" noted the role of training and the relevance of creating a favorable atmosphere in the team, support and positive attitude of the employees.

In the discussion that followed, the meeting participants expressed the opinion that the current crisis situation is a period of opportunity. And noted that the key factor is the transformation of people themselves: the development of flexibility and soft-skills of managers of compliance functions. According to the participants, improving the leadership skills of employees, critical thinking, teamwork skills, constant training and adaptation to new realities are the main drivers of transformation.