Bringing your compliance A-game: why all multinationals should undertake a yearly CoSec health check
Article

Bringing your compliance A-game: why all multinationals should undertake a yearly CoSec health check

07 December 2017

While year-end sees many companies rushing to meet their reporting deadlines, it’s also an opportune time for them to reassess their global corporate secretarial program, and undertake a health check.

Regardless of the size or status of a multinational company (MNC), a robust global corporate secretarial program has always been key for effective entity management, compliance, governance, and risk mitigation.

However, the importance of such a program is increasing for international companies as they are faced with an ever-growing list of compliance requirements. From Base Erosion and Profit Shifting (BEPS) to Anti-Money Laundering (AML), Ultimate Beneficial Owner registration (UBO) and the Foreign Account Tax Compliance Act (FATCA). International companies must adhere to – and satisfy – a myriad of rules.

The trend across the world is to control what kind of information is being shared by companies, not just from a financial point of view, but also a UBO perspective. There are many new regulations and new reports that MNCs must present to local or central authorities, and even those that have been operating in a market for decades can be caught out.

In this rapidly evolving regulatory environment, it’s important to know that your international compliance program is up to scratch. Good practice is to review the status of all your entities at least once a year. The end of the year being an appropriate time, as companies typically have sufficient information to run health checks.

While it sounds like an easy thing to do, in reality of course, it can be difficult and can require in-country support to complete properly. With increasing financial and reputational risks from non-compliance, frequent entity status checks are a must for international businesses.

Here are some key signs that can indicate your entity is not in good standing from a compliance perspective.

1. Company accounts are being filed incorrectly or late

We all know that human errors happen, and unexpected circumstances can lead to deadlines being missed. But if incorrect filings are occurring frequently, or your paperwork is chronically late, your existing process may be due for an overhaul.

2. The authorities are knocking on your door

No MNC should be surprised by authorities conducting random checks, and indeed companies with robust systems in place should be well prepared for any surprise audits. However, if you are receiving an unusually high level of correspondence from authorities in any particular jurisdiction requesting further information about your company’s activities, it’s likely something is chronically wrong with your compliance regime. And you need to address it - fast.

3. You’re receiving fines for non-compliance

If your MNC is failing to meet certain regulations and you’re receiving penalties as a result, the writing is on the wall. It’s time to overhaul your failing CoSec program and adopt a more optimal approach.

While these signs are not hard to spot, addressing them becomes a challenge for overworked global compliance departments. Some of the issues can arise when departments are trying to manage multiple external compliance providers. Using the one provider – such as TMF Group – that has legal administrative experts in the same jurisdictions as your operations can save enormous time and effort; as we are able to collect all necessary information and perform a health check before implementing your global compliance program.

With the help of the right corporate secretarial services provider, multinationals can bounce back and return to a point of full operational compliance.

Talk to us

TMF Group’s global team of legal experts work to remediate any issues so your company can continue its operations with complete compliance peace of mind. Our health checks review and verify company records, databases and identify any compliance failings.

Need more information? Make an enquiry with us today.

Find out how our corporate secretarial services can help streamline your international operations.

Written by

Priscila Westerhof-Fittipaldi

Director of Corporate Secretarial Services

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