ArticleView portlet

First VDMA China Seminar in 2016 on the three main pillars of Compliance

02.02.2016 | id:11868299

The first VDMA China Seminar in 2016“Compliance – Guidelines for Prevention, Detection and Response”, sponsored by ECOVIS Ruide China, took place on the 29th January 2016.

Compliance is a hot topic in China. Corporate internal and government investigations are increasing – revealed compliance scandals are not a rarity anymore. However, compliance in China is often difficult to understand for foreign companies – clear action plans and awareness of the legal framework are needed. Therefore, VDMA China organized a Seminar which covered the three main pillars of compliance:  Prevention, Detection and Response.

Mr. Mike Goldammer, Partner of Taylor Wessing and Mr. Neal Beatty, Director of Control Risks together shared their expertise on compliance and also presented very interesting case studies to the audience.

Mr. Beatty introduced the topic with the “New Normal” in terms of compliance. China is in a phase where on the one hand more emphasis is put on compliance by the government and authorities but on the other hand there is no uniform anti-corruption law yet and the mind-set of people of what might be called ‘developing good relations’ or ‘corruption’ still differs compared to the mind-set of Westerners. Furthermore, companies need to take care of compliance themselves and be their own investigators, prosecutor and judge. Mr. Goldammer also made clear which impacts a breach in compliance can have on different parties – both the company and the individual are affected.

Measures that strengthen the prevention of compliance are amongst others a clear risk assessment, stakeholder mapping and knowing your business partners well, staff training, code of conducts, non-competition arrangements and internal audit systems.

For the detection of non-compliance issues, communication plays a big role. The implementation of whistle-blower hotlines, internal audits, training and communication with suppliers can help to detect cases. If a dawn raid takes place, it is important to define internally the dos & don’ts and to be able to identify who the visitors are.

There are different ways to respond to a non-compliance case, e.g. site visits, IT forensics, analysis of books and records, interviews and reporting. The case can end with e.g.  labour contract termination, a litigation, administrative penalties. After the case, it is important to review the current business model, the internal compliance system and other issues that might have caused the case. Overall, it is important to focus not only on ‘eliminating’ the problem but also to focus on the business recovery afterwards.

After the three topics, the sponsor of the event ECOVIS Ruide China, a consulting company with core competencies in accounting, auditing and tax consulting introduced their service scope to the participants. All in all, the seminar was very successful and showed that the interest in compliance is very high amongst the member companies.

Press Gallery