Advantage series regulatory convergence study

A study on the international alignment of policies and laws and
how global organizations can adapt their business strategies to
avoid the risks and gain competitive advantage
31 May 2016

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Foreword
“It is not the strongest of the species that survive, nor the most intelligent,
but the ones most responsive to change” – Charles Darwin
At Grayling, we believe that the gradual
demise of divergent national regulations is
inevitable as our economies, markets and
societies globalize with exponential speed.
As a global Public Affairs consultancy, we
witness examples every day of regulatory
convergence, whereby standards, policies
and laws align across different geographies.
Convergence is occurring bilaterally between
countries, and at a regional/international
and global level across several nations.
We see evidence of convergence in all
sectors of the economy, whether it is financial
services, ICT, food or health, albeit at a faster
pace in some than in others. It is happening
organically, with rules naturally aligning over
time, and deliberately, where policymakers
cooperate in response to a common threat
like a prevalent disease, or to achieve a
common goal like greater market access.
At Grayling, we advise some of the world’s
leading organizations on how to maximize
the benefits and mitigate the risks of
regulatory convergence. This has enabled us
to understand the many factors influencing
the speed, success and impact of this
phenomenon.
The drivers of convergence are diverse, from
the political, economic and societal to the
technological, ethical and cultural. They are
highly interlinked, and whilst some can be
predicted and controlled, others cannot.
The real question is moving beyond what
is driving regulatory convergence to
what this phenomenon/trend means for
organizations. More and more, companies,
trade associations, NGOS, and civil society
groups are wondering how they can turn it
to their advantage.
For corporations, regulatory convergence
can offer substantial economic gains, such
as opening up new markets and new types
of customers, and reducing legal uncertainty
and costs. For NGOs, regulatory alignment
can increase their societal impact through
cross-border transparency, and lead to
public-private partnerships that drive positive
societal change.
However, there are also risks associated
with regulatory convergence, like ‘one-
size-fits-all’ legislation or a lowest common
denominator outcome which lowers global
standards.
As professionals advising on public policy
management, we have examined empirical
evidence of regulatory convergence at
play, and what it means for organizations
in five prominent sectors – financial
services, information and communications
technologies (ICT), energy and environment,
food and consumer, and healthcare.
Undertaken in Q1 2016, the study draws
conclusions about key drivers, barriers and
trends influencing regulatory convergence.
It puts forward recommendations on how
organizations can integrate this knowledge
into boardroom decisions and public affairs
strategies. It integrates case studies and
strategic insights from across our global
network, though was developed in Brussels
and therefore retains a certain European-
centricity on which we are happy to be
challenged!
A very big thank you to our own Grayling
colleagues around the world for their wise
counsel, and to the many clients and contacts
who so kindly provided their views. We
welcome yours.
Russell Patten
Chairman Grayling Public Affairs Europe
Eleanor Flanagan
Manager and Lead Author, Grayling EU-
Brussels Public Affairs

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Contents
I. Executive summary
II. So…What is regulatory convergence?
III. Objectives, scope and methodology
IV. Factors influencing the pace of regulatory convergence
V. A sector-by-sector approach
VI. Analysis and conclusions
VII. How to respond to regulatory convergence
VIII. What next?
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I. Executive Summary
REGULATORY CONVERGENCE AS A CONCEPT
Regulatory convergence is a complex phenomenon, and one for which no universal definition
exists. It is often referred to as the gradual alignment of regulatory requirements across
countries and regional groupings1
, yet even this seems too broad to really capture the many
forms convergence can take. We have therefore developed a new categorization of regulatory
convergence to help organizations assess where they might be at in their respective policy areas:
1. Regulatory Convergence 1.0 - is the seed-stage of harmonization, where similar
guiding principles and/or objectives underpin policy development in different regions.
Policies, laws and standards still differ dramatically.
2. Regulatory Convergence 2.0 - is where governmental policies align across different
jurisdictions, but the rules and regulations in place to give these policies legal effect
remain very different.
3. Regulatory Convergence 3.0 - is the alignment of legal frameworks and the adoption
of similar rules and regulations across regions. It is extremely tough to achieve, and
normally takes place through agreements between major economies, such as Free
Trade Agreements. and normally takes place through agreements between major
economies, such as Free Trade Agreements (FTAs).
4. Regulatory Convergence 4.0 - is where the same standards or laws formally apply
across different jurisdictions.
COMMON OBJECTIVES, COMMON POLICIES?
A number of cross-cutting objectives are driving regulatory cooperation at the international level.
From a macro perspective, there must be an opportunity for mutual benefit if regulatory convergence
is to begin and succeed. Otherwise, there is no incentive for authorities to collaborate.
At a micro level, seven key concerns are driving regulatory cooperation:
Of course, common objectives by no means lead to regulatory convergence. Success is ultimately
determined by a wide variety of different factors.
Wealth and
job creation
Reduced costs
and efficiency
gains
Competition Environmental
protection
Consumer
and citizen
protection
Transparency
requirements
Global
security
1
http://www.fda.gov/BiologicsBloodVaccines/InternationalActivities/ucm271079.htm

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INFLUENCING FACTORS, AND WHY THEY ARE IMPORTANT
Why does regulatory convergence occur in the first place? What are the motivating factors driving its
development, and what are the obstacles blocking progress?
Our trends analysis has shown that there are five key accelerants impacting every sector
analyzed in this study:
There are of course also a number of barriers to regulatory convergence and in today’s economy:
Aside from accelerants and barriers, there are ‘Unpredictables’, including political upheaval, like
elections or changes in government, and the degree of stakeholder support for or resistance to
regulatory alignment.
THE POWER OF STAKEHOLDERS AND GEOPOLITICS
Stakeholder groupings play an important role in determining the outcome of regulatory
convergence efforts. The influence of industry voices can be considered strong in most if not all
major economies, although is more noticeably prominent in the US, Japan and Europe. Corporate
interests also inform policy development in Russia and China, though domestic players are
undoubtedly more influential than foreign companies.
NGOs and civil society groups are also incredibly strong, particularly in Europe.
International standardization bodies like the International Organization for Standardization
(ISO) and issue-specific international bodies like the World Trade Organization (WTO) and World
Health Organization (WHO) are, by nature, in charge of facilitating international cooperation on
issues of global relevance.
SECTORAL ANALYSIS
When examining trends of regulatory convergence in five key policy areas, we found vast
differences between and within sectors in terms of the speed and success of the regulatory
convergence taking place.
Financial and environmental regulation can be considered the most advanced. In both cases,
internationally binding agreements, treaties and standards have been established to address
global threats.
Economic
necessity Standardisation
The advent
of technology
Free trade
agreements
Cataclysmic,
one-off events
Ideological,
cultural and ethical
differences
Nationalism and
concerns for
sovereigty
Disconnect between
international and
national objectives
Limited capability
to comply with
international rules
Different
approaches to
regulation

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Broadly speaking, regulatory convergence is in its infancy in the ICT sector. The harmonization
of regulations governing ICT companies is set to increase exponentially as technology becomes
ubiquitous and governments join forces to tackle a new challenge: how to regulate a rapidly changing
global sector when the legislative process can take years?
Regulatory convergence remains slower in the food, consumer and healthcare sectors, despite some
landmark successes in global safety standards, due to cultural, regional and even ethical specificities.
BUSINESS IMPACT OF REGULATORY CONVERGENCE
Regulatory convergence has implications for all companies, and particularly those operating in an
international environment. There are both positives and negatives to be aware of if companies are to
effectively adapt their business strategies to regulatory convergence as a global trend.
What are the advantages? Efficiency gains; cost reductions; lower risk; access to new markets and
customers; commercial opportunities, such as stronger return on investments for innovations.
What are the risks? An overall lowering of global standards; the adoption of ‘one-size-fits-all’
regulation which is ineffective in national contexts; double regulation, if national frameworks
are not adapted; or delays in regulatory action on an issue that needs urgent attention.
WHAT CAN YOU DO ABOUT IT?
There are three key steps to reaping the benefits and avoiding the risks of regulatory convergence:
The Grayling View: By acknowledging that regulatory risks and opportunities are no longer
confined to countries or regions, and placing regulatory convergence at the heart of business
strategy, it is possible to take the lead on policy issues that will not only affect your organization,
but the sector at large. In turn, this will give you a uniquely global perspective on policy
development and enable you to become a trusted partner for regulators across your key
markets for years to come.
ENSURE C-SUITE UNDERSTANDING
of your regulatory environment in the global sense
1
INTEGRATE REGULATORY CONVERGENCE
into your public affairs strategy to create a
favourable regulatory environment
2
LEVERAGE REGULATORY CONVERGENCE
as a slow and complex process that offers
opportunities to shape global policies
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II. So…What is regulatory convergence?
CONTEXT
Regulatory convergence is a concept with which many of us are not that familiar, even though
it affects our professional and personal lives every day. When you plug in your laptop or tablet,
the ability to use the same plug abroad as you do in your home country is a result of regulatory
cooperation on consumer electronics.
When you buy a new car, the price will be partly determined by the carbon emissions the
engine produces, and whether the vehicle is judged as being a high, medium or low pollutant
according to international standards.
Indeed regulatory convergence has been a common project of governments and international
organizations for a long time. At its core, it is a reaction to the incremental, non-linear
integration of societies, economies and markets, or ‘globalization’ as a trend and ideology.
There is considerable evidence2
to show that the harmonization of policies, laws and standards
really took off in the latter half of the 20th century, when the US emerged as a global
economic superpower and international trade spawned a series of multinational corporations.
On the other side of the pond, Europe undoubtedly fostered and promulgated regulatory
convergence with its plan to harmonize legislation across now 28 borders and create the
largest internal market in the world where products, services, capital and people should freely
move around. The proliferation of communications technologies in the 1980s onwards further
accelerated socio-economic integration and, as a result, efforts in regulatory convergence.
A number of fundamental objectives are driving regulatory convergence across the globe. At a
macro level, efforts towards regulatory alignment are rooted in the idea of mutual economic and/
or societal benefit. This could be wealth creation through international trade and employment, or
a collective response to a global public health threat. The existence of mutual interest is critical.
Indeed, without it, or when the potential outcomes of regulatory cooperation are perceived as
being advantageous for one side over the other, convergence becomes very difficult.
At a more micro level, seven key objectives are underpinning international cooperation on
regulation across all sectors:
1. Wealth and job creation (eg removing trade barriers and creating economies of scale)
2. Reduced costs and greater efficiency (eg lowing compliance and legal fees,
streamlining processes to increase productivity)
3. Competition (eg leveling the playfield between domestic and foreign players)
4. Environmental protection (concerns about which are promoting sustainable business
and lifestyles)
5. Consumer and citizen protection (in the broadest sense, from human health and well-
being to fair prices and the choice of all goods and services available on the market)
6. Transparency requirements (between and among public and private actors, particularly
in the corporate world)
7. Concerns for global security (against organized and individual crime, notably
terrorism, trafficking and cyber-crime)
2
http://www.fda.gov/BiologicsBloodVaccines/InternationalActivities/ucm271079.htm

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These objectives are horizontal and cross-cut all sectors. The degree of importance attached
to each varies widely depending on geography, and it is only when authorities have similar
interests and are able to find a common regulatory approach that we see substantive
convergence of policies, laws and standards on key issues.
CONCEPTS AND DEFINITIONS
The legal and practical distinction between policies, regulations and regulatory standards
confuse even the most experienced of Public Affairs professionals. For the purposes of this
study, we consider them as follows:
• Policies are communications of political direction designed to help governments
achieve their objectives. Policies are implemented via legislation, and are overarching
and general in nature.
• Laws are written rules that permit punitive action from authorities in case of breach.
They can only be proposed by the executive branch of a government, and are
administrative in nature3
.
• Standards are documents that set out “requirements, specifications, guidelines
or characteristics that can be used consistently to ensure that materials, products,
processes and services are fit for their purpose”4
. They can be introduced by authorities
or standardization organizations like ISO.
Contemporary literature also throws up countless definitions of regulatory convergence. The
OECD definition of regulatory convergence is often cited as a reference point: “international
regulatory cooperation is defined as any agreement or organizational arrangement, formal or
informal, between countries (at the bilateral, regional or multilateral level) to promote some
form of cooperation in the design, monitoring, enforcement, or ex-post management of
regulation, with a view to support the converging and consistency of rules across borders.”
We believe that this phenomenon should be considered in its broadest scope, referring to the
alignment of one or several regulatory aspects in any context5
:
3
http://www.differencebetween.com/difference-between-policy-and-vs-regulation/
4
ISO, Standards, http://www.iso.org/iso/home/standards.htm
5
OECD, International Regulatory Co-operation: Addressing Global Challenges, http://www.oecd.org/gov/regulatory-policy/irc.htm
1
2
3
4
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Underlying principles
Objectives
Policy frameworks
Regulations
Implementation processes
Oversight and enforcement
mechanisms

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To help organizations make sense of the type of regulatory convergence taking place on
their key issues, we have developed a new categorization of harmonization based on our
experience:
1. Regulatory Convergence 1.0, or ‘Principle or Goal Convergence’
Similar guiding principles and/or objectives underpin regulatory development across
regions, but the policies, laws and standards themselves differ markedly in substance
and application, and efforts between regulators remain non-existent or in their infancy.
2. Regulatory Convergence 2.0, or ‘Policy Convergence’
Governmental policies are broadly aligned, but the laws in place to implement these
policies are very different at the local level.
3. Regulatory Convergence 3.0, or ‘Legal Framework Convergence’
Regulations are very similar in content and implementation across regions, but
important legal differences remain to account for national contexts.
4. Regulatory Convergence 4.0, or ‘True Convergence’
When a blanket law or near-equivalent rules formally apply across different
jurisdictions6
. This kind of regulatory cooperation is regularly achieved at a regional
level, and internationally through binding trade deals between major economies or
global bans on products or activities deemed a threat to the global society.
Aside from the substance of the convergence taking place, some acts of convergence
are organic, whereby laws naturally align over time due to the sharing of information and
knowledge in a globalized economy.
Others are deliberate, where the spread of policies and regulations is a result of concerted
efforts in emulation by governments and stakeholders. Deliberate convergence is mainly in
response to pull factors, like a mutual interest in greater cross-border trade, or push factors,
like natural disasters or global threats to public health or security.
GEOGRAPHICAL BREADTH
This study is based on the following assumption about the geographical breadth of regulatory
convergences taking place today:
• Convergence at a global level (a) involves most of the G20 countries or equivalent
major economies;
• Convergence at an international level (b), involves at least two major economies or
regional groupings such as the EU, US, Russia, China, Canada, Australia, Africa or
Japan, and is generally implemented via trade deals;
• Convergence at a regional level (c) involves a number of countries within one regional
grouping such as Europe or Asia. Intra-regional convergence is important in forecasting
exercises, as it often pre-empts wider cooperation on an international or even global level.

6
http://www.oecd.org/gov/regulatory-policy/irc.htm

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LIFE-CYCLE STAGE
We consider regulatory convergence as falling broadly into one of the following stages7
:

How quickly or slowly regulatory convergence is progressing comes down to complex
combinations of influencing factors, which are addressed in detail later.

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Adapted from organizational theory
INFANCY
Many barriers still exist,
with convergence taking
place between small
players and at a slow rate
GROWTH
Forceful drivers are
accelerating convergence
between major economies,
though barriers still exist
MATURITY
Convergence is established
and the focus is now on
application and oversight
Stage 1 Stage 2 Stage 3

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III. Objectives, scope and methodology
OBJECTIVES
The objective of this study is to provide a global view on regulatory convergence and what it
means for organizations operating in five major sectors. At a granular level, we aim to provide:
1. Evidence-based analysis: We identify prominent factors influencing regulatory
convergence, and combinations that are accelerating or obstructing harmonization in
different sectors.
2. Impact assessment: We define in practical, cost-benefit terms what regulatory
convergence can mean for an organization, in terms of both risk and opportunity.
3. Foresight and strategy: We put forward recommendations for how organizations
can effectively respond and adapt to regulatory convergence to support long-term
strategic planning and better risk and opportunity management.
SCOPE AND METHODOLOGY
Our study is based on empirical evidence gathered from across Grayling’s global network.
This includes case study examples of regulatory convergence taking place in five different
sectors, face-to-face interviews with senior executives in the political and business spheres, and
extensive desk research into academic and empirical literature on the subject.
Our selection of 10 case studies is categorized by sector8
and designed to illustrate the
phenomenon in different forms and stages. Drawn as classic examples of regulatory
congruence from a much wider pool, the case studies focus on the overarching issue that has
promoted regulatory cooperation, which countries, regions and stakeholders are acting as
instigators and promotors, and the external push and full factors influencing its success.
In addition, a series of interviews were conducted with the upper echelons of the corporate,
political and regulatory worlds. We used adapted versions of the same questions relating
to drivers of and obstacles to regulatory convergence in their sectors and markets, the role
they feel their and other organizations play in its development, and best practice tactics to
anticipate and adapt to a changing regulatory landscape.
8
ICT, financial services, food and consumer, energy and environment, and healthcare
Evidence-based analysis Impact assessment Foresight and strategy

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IV. Factors influencing the pace of regulatory
convergence
There are many factors influencing the pace of regulatory convergence at both a sectoral level (eg,
food and nutrition) and on an issue-specific basis (eg, a global ban on Bisphenol A (BPA)).
Some factors accelerate the process, such as the transformative power of ICTs to globalize our
economies and societies and make national regulations ineffective or irrelevant. Others act as real
barriers to regulatory convergence, like misfit between international standards and national legal
frameworks, or cultural, ethical and ideological differences between important economic regions.
Certain influencing factors are what we call ‘The Unpredictables’, which speed up or slow down
regulatory convergence depending on the situation. Political upheaval, like the election of a new
government, and the degree of stakeholder support and power are clear examples of where their
impact can only be determined on a case-by-case basis.
What is clear is that the speed and practical success of regulatory convergence is not down to any one
factor. They do not exist in isolation, and it is always a combination that leads to convergence (or lack
thereof) across difference sectors. For example, policies and standards are often aligned when there
is a clear socio/economic incentive to do so, strong support from organized stakeholder groups like
industry and civil society, and a relatively similar regulatory approach in different regions (eg, risks-
based vs principles-based/heavy-handed vs light-touch).
On the other hand, the lethal combination of misfit between national and international objectives and
interests, opposition from powerful stakeholders, and divergent capabilities to comply with global
standards convergence will always block true regulatory convergence (4.0) in the international arena.
COMMON ACCELERANTS OF REGULATORY CONVERGENCE
We have identified a number of accelerating factors driving forward regulatory convergence, though
this is by no means exhaustive or a hard and fast rule.
1. Economic necessity, created by globalizing economies and markets and the 20th century
rise of the multinational organization.
Case study example: Visa policy
With progressive economic growth and the advent of international business travel came
the need for harmonized visa legislation to facilitate the free movement of people across
countries and continents. Beginning in Australia in 1996 with the establishment of the
Electronic Travel Authority (ETA) programme (e-Visa principle), today’s global economy
functions on the basis of several regional free-travel zones created via international
treaties like the ASEAN Travel and EU Schengen Agreements. This is a classic example
of Global Framework Convergence (3.a), where the objectives, policies and broad
legal frameworks are quite similar, but important differences still exist in the statutory
legislation.

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2. Normative standardization by international bodies such as ISO, or the World Bank, which
set a common benchmark for regulatory performance across signatory nations.
Case study example: Pesticide control
In May 2015, over 90 countries sitting in the Conference of Parties (COP) 7 of the
Stockholm Convention voted for global ban on pentachlorophenol – a toxic pesticide
that has proven contaminant effects in wildlife and human biomonitoring studies9
. This
can be classified as Global True Convergence (4.a) due to its unilateral and legally-
binding effect across many jurisdictions.
3. The advent of information and communications technologies (ICTs) in an
organizational context. ICTs are transforming and internationalizing organizations and supply chains
across all sectors, which is producing a need for an equally international legal framework.
Case study example: Data protection
In February 2016, the EU and US signed an international agreement – the Privacy
Shield – to align US commercial privacy policies with those of the EU. Why? Because
international data flows are considered an economic necessity in a global economy
driven largely by the EU and US, but which were controversially suspended in October
2015 when the EU felt that US privacy standards were too out of sync with its own.
Although the Privacy Shield does not require any change to the legal framework in the
US (making it International Policy Convergence (2.b)), the overall principles, concepts
and standards are being harmonized under its terms.
4. The removal of trade barriers and liberalization of markets through bilateral and
multilateral free trade agreements, such as the EU-US Transatlantic Trade and Investment
Partnership (TTIP), the Trans-Pacific Partnership (TPP), and EU-Canada and EU-Japan FTAs.
Case study example: Investor-dispute resolution
Both TTIP and TPP aim to harmonize regulations governing investor-state dispute
settlement (ISDS). If adopted in the final texts, this instrument of public international
law will award investors the legal right to initiate proceedings against a foreign
government10
. This could represent an example of Global Framework Convergence
(3.a), since the specificity of the subject and its relevance to a global financial market
(rather than domestic) means that the statutory law enacted to implement it is likely to
be similar across regions.
9
http://www.ipen.org/news/toxic-pesticide-globally-banned-after-unprecedented-vote-un-chemicals-meeting
10
http://www.nyulawglobal.org/globalex/International_Arbitration_Foreign_Investors_Host_States.html

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5. Cataclysmic, unprecedented events or phenomena that threaten the functioning of the
global economy, or unprecedented threats to human health and safety and the environment
which cannot be addressed by local jurisdictions11
.
Case study example: Emissions reduction
As a direct result of global warming, governments across the globe have taken similar
policy steps towards emissions reduction. Added to national regulations that set
emissions caps and testing and monitoring requirements for vehicle manufacturers for
example, the Conference of the Parties (COP) to the 1992 United Nations Framework
Convention on Climate Change (UNFCCC) is facilitating game-changing cooperation
to reach collective targets. The COP 21 agreement reached between 196 nations in
December 2015 was a huge step forward for global regulatory convergence. It does not
impose the same rule of law across nations, but does encourages the adoption of similar
policies and legislation at a regional and national level by setting communal goals and
targets, making it Global Framework Convergence (4.c).
11
http://www.oecd-ilibrary.org/governance/international-regulatory-co-operation_9789264200463-en

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COMMON BARRIERS TO REGULATORY CONVERGENCE
There are also barriers to regulatory convergence at an international level. One is often enough to
block the process, whilst a combination is a recipe for disaster for authorities trying to align policies,
legal frameworks and standards.
1. Ideological, cultural, and ethical differences between regions or countries
Case study example: Geographical indications (GIs)
GIs are a constant headache for policymakers and stakeholders searching for regulato-
ry convergence, particularly in the food and beverage sector, and an area in which no
convergence is taking place at an international level. As a distinctive sign or label that
a product originates from a certain territory or region, GIs are a way to protect region-
al, national and local cultures and, often, home-grown industries. Because they are so
inherently linked to European cultural heritage and GDP (a 2012 study by the European
Commission put the value of GI products in 2010 at €54.3 billion12
) and do not exist at all
in the US, GIs are a key barrier to regulatory convergence under the Transatlantic Trade
and Investment Partnership (TTIP).
2. The rise of nationalism and governments’ concerns for their own sovereignty
and security
Case study example: Cybersecurity
Regulators across the globe agree that cyberspace is a forum through which new and
existing types of crime are facilitated, from fraud and human/drug trafficking to online
hacking. Despite this and the fact that the Internet and other web-based systems used
to conduct cybercrime are borderless in nature, regulatory cooperation is very slow.
Joining forces to fight cyber-threats and attacks inherently involves the sharing of
classified state information. This, combined with the rise in power of nationalistic parties
like France’s Front National, makes regulatory convergence almost untenable politically.
The EU’s Network and Information Security (NIS) Directive is a classic example, with
adoption taking 12 years and resulting in a text which is too broad and unambitious
compared with where discussions started in the early 2000s. Cybersecurity law may be
considered International Goal Convergence (1.b), since the EU is collaborating with
other major economies like the US and Russia to achieve broadly the same aims, but
their ways and means are very different. This is also due to the fact that policy in this field
is in its infancy generally.
12
http://ec.europa.eu/agriculture/external-studies/value-gi_en.htm

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3. Disconnect between transnational and national objectives, legal frameworks and
decision-making processes
Case study example: Genetically Modified Organisms (GMOs)
The genetic modification of humans, animals and plants is the subject of intense public
debate in most developed economies. Despite calls from Life Science industries and
patient groups for policies that promote innovation in this field, regulatory convergence
is proving extremely difficult for many reasons, among them diverging ethical beliefs,
religious principles and policy frameworks. Indeed between the EU and the US,
discussions on regulatory cooperation remain at the GMO labelling stage, and have not
progressed to rules around cultivation or marketing since the ways in which these issues
are regulated differ vastly. In the US, rules are made at a federal level, with all states
obligated to comply. In the EU, Member States retain authority over how and which laws
are put in place, making international cooperation virtually impossible.
4. Limited resources of domestic players to comply with policies, regulations or
standards set internationally
Case study example: Shareholder protection
Discussions between the EU and Ukraine on regulatory convergence pre-dated the
two parties’ Association Agreement, finally signed in 2014. Initial dialogue around the
alignment of policies, laws and standards started after the dissolution of the Soviet
Union in 1991, but became long and arduous due (in part) to the Ukrainian government’s
belief that it did not have the resources or infrastructure to meet European standards.
One example was the absence of regulations on shareholder rights, particularly with
respect to transparent access to corporate information and disclosure policies. Their
introduction would have generated huge adaptation costs for a newly independent
country in the process of rebuilding political and economic stability. This led the
government to judge the costs of regulatory convergence as vastly outweighing the
benefits. Although later addressed, regulatory convergence was blocked for many years
due to this and other legal misfits between European standards and Ukrainian capacity
to comply.
11
http://www.oecd-ilibrary.org/governance/international-regulatory-co-operation_9789264200463-en

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5. Fundamental differences in countries’ or regions’ approach to regulation
Case study example: Carbon tax
All countries and regions have their own, individual approach to regulation of different
sectors. Some, like the US, are more laissez-faire and risks-based, preferring to allow the
market to evolve naturally and only intervening in cases of clear market or regulatory
failure. Others, like the EU, are much more prudent in their approach, legislating on the
basis of the Precautionary Principle to mitigate threats and avoid problems before they
arises.
Similarly, some governments prefer incentives-based regulation, whilst others go for
the Command and Control (CAC) method13
. A clear case may be found in the complex
debate around carbon taxes. Policies and rules designed to lower emissions have
naturally aligned across countries which favor an incentives-based approach to curbing
emissions, such as Australia, India and Japan. Other governments face serious domestic
opposition to taxes, however, due in part to their preference for a capping policy that
forces companies to lower emissions without having to offer them financial gain in return.
13
http://study.com/academy/lesson/incentive-based-regulatory-approaches-environmental-taxes-tradable-permits.html

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THE ‘UNPREDICTABLES’
Alongside common accelerants and barriers to regulatory convergence, we witness two
influencing factors that very often shape the pace and success of regulatory convergence. It
is difficult, if not impossible, to categorize these as either driving or obstructing the process,
since they are nearly always case-by-case.
1. Political upheaval
Case study example: Fisheries policy
The impact of changes in government and the will of individual politicians to drive
regulatory convergence are often underestimated. Euroscepticism is a timely example
following the influx of EU-sceptic politicians to Brussels after the 2014 EU elections.
Closely linked to concerns over the loss of national identities, doubts over the
functioning of the euro and the internal market, and the sentiment that the institutional
environment of the EU is not as democratic as it portrays itself to be, Euroscepticism has
gained considerable currency in the last number of years14
. This has real consequences
for the process of European integration, particularly at a policy level. Just recently,
UKIP’s Nigel Farage called for a total rethink of a European quota system for angling in
order for countries to “get back control and management of our own waters”. Farage’s
Europe of Freedom and Direct Democracy (EFDD) party also recently opposed the
proposed establishment of a European Border and Coast Guard Agency as a “full frontal
attack on national sovereignty”15
.
2. Stakeholder influence
Case study example: Basel III
The degree of influence and positions of stakeholders are critical to determining how
effective regulatory convergence is in practice in any context. For this reason, we are
seeing a general trend of authorities engaging in public consultation before taking
legislative action in a bid to ease concerns, gather insights and mitigate opposition that
may otherwise emerge too late down the line. The delayed application of the Basel III
Agreement is a case in point. Designed as a comprehensive package of international
reforms to tighten the regulation, management and oversight of banks, Basel III can be
considered successful regulatory convergence in the sense that it was fully adopted in
2010. Nevertheless, its implementation has been significantly delayed (from 2013 to
2019) due to opposition from banks and certain government officials (Russia is thought
to be particularly weary). The opposition is rooted in the context of stagnated economic
growth and stakeholders fears that Basel’s more stringent capital rules for lenders will
lead to a drop in corporate lending or dividend pay-outs16
.
14
https://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000332443/Euroscepticism+gaining+currency%3F+Implications+of+the+EU+elections+for+economic+policy.pdf
15
http://www.efddgroup.eu/newsroom/eu-border-power-grab-a-full-frontal-attack-on-a-country-s-control-over-national-borders
16
http://www.bloomberg.com/news/articles/2015-09-27/kremlin-said-to-urge-basel-iii-delay-as-economic-crisis-deepens

20
V. A sector-by-sector approach
FINANCIAL SERVICES – THE POSTER CHILD
State of regulatory convergence:
The modern financial system is extremely complex, characterized by many diverse assets,
instruments and markets that facilitate the exchange of capital between different actors, from
investment banks to private equity and hedge funds. The system has been considered globally
integrated since the liberalization of capital markets and a series of deregulatory measures
were adopted at the national level in the 1980s and 1990s.
The sector’s globalization has provoked widespread efforts to harmonize laws and standards
across borders. Although it is fair to say that regulatory convergence pre-dates the economic
crisis of 2007-2008, it gained huge impetus following the onslaught of the credit crunch. Eight
years on, the introduction of robust, international financial controls still tops the agenda of
major economies and powerful political clusters like the G20 and G8 groups.
When did regulatory convergence accelerate? Regulatory convergence first took off in the
area of financial reporting standards in the 1950s. Post-World War II, economic integration
and the internationalization of capital flows meant there was a greater need for statement
comparability and transparency if governments were to stimulate cross-border investment.
One of the most important signals of regulatory convergence as a trend was the creation of
international policy, regulatory and oversight bodies, such as the European Central Bank in
1998 and the G20 cluster of major economies interested in setting common financial policies in
1999.
Pre-crisis examples of regulatory convergence include the commitment by over 100
nations to align domestic rules with the International Financial Reporting Standards (IFRS),
and cooperation between the US Financial Accounting Standards Board (FASB) and the
International Accounting Standards Board (IASB) to reduce inconsistencies between US
standards and the IFRS. Global principles had also been introduced for risk management,
liquidity, bank capital adequacy and solvency well before 2008.
Nevertheless, it is clear that regulatory convergence accelerated dramatically following
the devastating financial collapse of 2007/2008. The effects were cross-cutting and global
in nature, and demanded a joint response from regulators across different jurisdictions to
stabilise international markets. The result? An astronomical surge in the sector’s re-regulation
at a national level, and increased cooperation between authorities and stakeholders to rectify
the damage of the crisis through macro prudential regulation at the global level.
17
Argentina,Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United
Kingdom, the United States, the European Union (EU). The EU is represented by the European Commission and by the European Central Bank
Substance 3.0 = Similar or equivalent rules and standards across jurisdictions
Life-cycle stage
Geographical
breadth
Global = Mainly under the auspices of the G20 group
Growth = An incremental, ongoing process

21
What are the key factors driving convergence?
Global markets and systemic risk: What the financial crisis proved is that with global
power comes global risk. At the height of their market supremacy, ‘too-big-too-fail’ financial
institutions such as Lehman Brothers leveraged their international operations to engage in
regulatory arbitrage, with disastrous consequences. By taking advantage of fragmented legal
frameworks, banks were able to hand out loans to subprime debtors, borrow too much from
other banks, and trade dodgy securities. This learning has driven regulatory cooperation at an
international level ever since.
Political will to harmonize regulations: It has been widely acknowledged that international
regulators and misbehaving market agents were jointly to blame for economic chaos that
ensued post-2008. Significant loopholes and divergences between different legal systems
coupled with a lack of regulatory oversight meant that politically, a united and robust response
to the crisis was the only way for shamed policymakers to regain credibility among their
constituents.
What are the barriers to convergence?
Inconsistent and/or ineffective application: Despite the considerable progress that has
been made in recent years to harmonize financial regulation, it is still common for countries
to implement the rules very differently. Take bank liquidity requirements, which are still not
being implemented in the same way in many countries despite the formal establishment of
an ostensibly global regime under Basel I, II and III. This barrier becomes a vicious cycle, as
uneven application casts doubt over the rationale for international standards and laws in the
first place. This can be further compounded by specific exemptions to international rules
negotiated between members of the G20 group, or lowest-common-denominator regulation
that fails to achieve its goals in practice.
Lack of coordinated enforcement: A 2011 report by the Private Sector Taskforce of
Regulated Professions and Industries (PSTF)18
, established in May 2011 at the request of the
Presidency of the G-20, noted that there remains a substantial lack of communication and
coordination between enforcement bodies. Linked to inconsistent application in many ways,
this is limiting “global tracking and resolution capabilities” that enable authorities to detect
and react to systemic risk. In the same vein as inconsistent application, this undermines the will
of politicians and industry to support convergence in the first place.
Global markets
and systemic risk
Political will to
regain credibility
Inconsistent
application
Lack of coordinated
enforcement
Differences between
major economic players
18
http://www.ifac.org/system/files/downloads/Private_Sector_Taskforce_of_Regulated_Professions_and_Industries.pdf

22
Differences between major economic players: The EU and US are at the forefront of
efforts to converge regulations, which is natural due to their economic worth of over half of
global GDP and a third of world trade flows18
. Nevertheless, some key differences remain
in their approach and legal frameworks which are severely blocking harmonization at the
international level. Just some examples include divergent rules governing securitisation,
compensation, insurance and ratings.
Which stakeholders are setting the rules? The stakeholder landscape in the financial sector is
as complex and diverse as the assets they trade. Chief among those setting the rules are:
• Financial Stability Board (FSB), which was initially an informal group of international
legislators and central bank experts that formalized following the crisis. The FSB is
responsible for the coordination between domestic regulatory bodies and efforts to set
international standards19
.
• Direct market participants, including banks and other financial institutions, rating
agencies, and global accounting and auditing companies all actively participate in the
development of post-crisis financial regulation, either individually or in an organized
fashion.
On the whole, the private sector is well-organized and an active participant to the convergence
process. Although there are of course examples of when industry actors oppose convergence
for commercial or other reasons, private economic actors on the whole support and input into
the process at an international level.
Take the Private Sector Taskforce, which is made up of leading and respected business
organizations such as the IASB, International Insurance Society, Institute of International
Finance and International Valuation Standards Council (IVSC). The group is just one of the
many credible third-party voices promoting regulatory cooperation.
Which countries or regions are driving it? The two regions driving convergence are the
US and EU. This is to be expected, not only because they represent the largest markets and
economies in the world, respectively, but also because they were the most badly hit in the fall
out of the crisis.
Prospects for the future Regulators’ efforts are slowly producing an international legal
framework that reflects the global nature of the sector, and the systemic risk it poses to
the global economy. The G10’s20
Basel III agreement of 2010 is a cornerstone example,
setting a global framework for stronger banking liquidity requirements and stress-tests, and
unprecedented limits to banks’ leveraging power. Although technically voluntary, it is widely
thought that the benefits of the framework – mutual recognition, greater transparency and
comparability, international understanding and, above all, increased credibility in the eyes of
other economic actors – will encourage international compliance.
Nevertheless, convergence of financial regulation is a slow, difficult process, with many barriers
remaining. It is often in the implementation phase that challenges arise, mainly due to private sector
opposition to high adaptability costs or the short-term market uncertainty created by regulatory
changes. Other important barriers include the inconsistent application of the rules at a national level
19
https://www.imf.org/external/pubs/ft/wp/2014/wp1446.pdf
20
Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States

23
and poor coordination between enforcement authorities, which create a vicious cycle of perception
that international rules are not effective in practice. Basel III a case in point, with its application delayed
from 2013 to 2019, touted by international media as a “victory for banks”21
.
Despite the fact that there are real and challenging barriers to financial regulatory convergence,
the aftershock of the economic crisis remains fresh in regulators’ and industry’s minds. This and the
empirical evidence attesting the risks of soft-touch and fragmented regulation in a globalized sector
means cooperation will continue at the international level.
21
http://www.bloomberg.com/news/articles/2013-01-06/banks-win-watered-down-liquidity-rule-after-basel-group-deal

24
INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) – THE NEW KID
ON THE BLOCK
The concept of uniform regulation may seem like an anomaly in a sector that prides itself on
market disruption, cutting-edge innovation and perennial, lightening-speed change.
Yet the growth potential and commercial viability of the ICT sector depend on regulatory
alignment given its socio-economic ubiquity and the borderless nature of the goods and
services it provides.
When did regulatory convergence accelerate? The alignment of rules governing the ICT
sector began at a regional level in the mid-1990s, graduating to a global objective in the last
five years.
International nature of the sector: ICT companies are now at the forefront of most major
sectors, disrupting markets and challenging incumbents. The lines between formerly distinct
ICT industries such as telecommunications, Information Technology (IT), broadcasting, and
the Internet economy have blurred, and the value chains of businesses operating in this space
have become borderless. The speed of their evolution and exponential growth and expansion
worldwide have drawn the attention of regulators, who agree that a common approach is
needed at an international level. Attempts to regulate these industries at a national or even
regional are unrealistic in the long term.
The rise of tech-enabled growth has also accelerated regulatory convergence. Political leaders
are recognizing with increasing clarity than fragmented national regulation limits all modern
companies’ access to an immense customer pool and the opportunities for cost reduction and
innovation that are available through ICTs.
International nature
of the sector
Competition concerns
Relevance for
national security
Substance
2.0 = Similar policies applied across jurisdictions, but considerable
differences in content and implementation
Life-cycle stage
Geographical
breadth
International = Largely between two major players (EU and US)
Comparatively fast growth = Forceful factors accelerating
convergence, driven largely by economic necessity in an
increasingly digital economy

25
Competition concerns: The explosion into market of ICT companies has been welcomed
by policymakers across the globe. At the same time, governments are coming under extreme
pressure from heavily regulated market incumbents to level the playing field.
How does this lead to regulatory convergence? Take Company A, an app developer in the
travel and tourism sector based in San Francisco, California. Company A wants to enter the
European market and specifically France, where consumers are suffering high prices and poor
service as a result of a long-standing semi-state monopoly. It does so with ease and at low
cost, making its app available through relevant app stores that are pre-installed on French
users’ smartphones. Company A begins to attract customers and flourish, but must also begin
to comply with French law and even faces new laws at the demand of the market incumbents.
This development is an annoyance for Company A if the French law was largely similar or
indeed equivalent to Californian state and federal regulations it complies with in the US
However, when French law – which largely derives from European law – is vastly different from
US law, the cost of compliance becomes business critical.
This situation arises every day, and its resolution has risen to the top of the international
political agenda. The EU is actively trying to address it at a regional level through integrationist
measures like the Digital Single Market Strategy and at global level through transatlantic
agreements such as TTIP and the negotiation of a new Privacy Shield with the US.
Relevance to national security: At the same time as governments and businesses the world
over chant the economic potential of technologies, a stark awareness of technology’s darker
side has come to the fore. The potential of ICTs to facilitate traditional crime such as terrorist
activity or drug trafficking and spawn new types of wrong-doing like cyber-attacks threatens
society at a global level, and hence demands a global response.
Through a series of bilateral trade deals22
, the EU, US and China are known to be sharing
information and coordinating action on ICT-enabled threats to international security.
Legal approach: Perhaps more salient in the ICT sector than in most others are the
fundamental differences in regions’ approaches to regulation. The precautionary principle
underpinning EU legislative development makes Europeans opt for regulation before a threat
appears, whereas the US laissez-fair, risk-based approach leads to federal regulation only in the
case of clear market failure or corporate misconduct.
Cultural: Aside from business and political interests, protecting citizens’ fundamental rights
is at the heart of the debate on how to regulate the ICT sector. A key obstacle to regulatory
convergence at the global level is the different weighting given to these rights in different parts
of the world. Take privacy – sacrosanct in Europe, but secondary to freedom of speech in the US.
Legal approach Cultural factors Problems of process
22
TTIP, EU-China Trade & Investment Partnership etc.

26
This leads to markedly different views on legal questions, such as user consent for data
processing, or business liability for notice and take-down of content. Similarly, the US “survival
of the fittest” mantra clashes with the EU’s propensity to favor the underdog when it comes
to competition policy. Certainly the US has never seen anything on the scale of the numerous
antitrust inquiries currently being carried out by the EU’s Competition Directorate.
Protracted policymaking: The decision-making process in the economies with the ability
to drive regulatory convergence is slow on its own, and snail-paced when compared with the
speed of the sector it aims to regulate. With laws taking up to five years to pass at EU level
and a similar scenario in the US’s bureaucracy-laden Congress, the worrying reality is that even
if rules manage to converge, there is a strong propensity for their outdatedness by the time
they come into force.
Which stakeholders are setting the rules? The ICT industry is a major driver of the policy
debate at an international level. Harmonized rules are largely in its interest due to their natural
interest in cross-border trade online, and it has the expertise and market knowledge that
legislators of a certain generation just do not have. Activist groups (particularly privacy) are
particularly influential in Europe, whilst national security agencies and authorities hold more
sway in the US, China and Russia.
Which countries or regions are driving it? The US federal government and European
Union were the original frontrunners, regulating networked and data-driven industries as
early as 199523
. State concerns were the same then as they are now, centered on need for fair
competition and the dangers of state-owned market monopolies such as telecommunications
behemoth AT&T in the U. S, and consumer protection.
In 2016, legislative and judicial developments on both sides
of the pond are spreading to the other, with prominent
examples in the areas of data protection and privacy, net
neutrality and roaming charges, and cyber-security.
In recent years, China and Russia have emerged as power
players in the process of ICT regulatory convergence,
adopting laws on data localisation that are now being
considered in the political corridors of Brussels and
Washington D.C. The need for policy alignment becomes
even more of an economic imperative as Eastern
giants rise in trading partner attractiveness, but also as
venerable competitors, to European and US companies.
Prospects for the future The success of regulatory convergence in the ICT sector will
ultimately depend on how well major trading powers can align business ambition with
political agendas, overcome historical and cultural differences in their approach to regulation,
and address bottlenecks in their legislative processes that impede quick decision-making.
Convergence will continue to accelerate out of socio-economic necessity, but the path is
far from smooth.
23
EU Data Protection Directive 1995 and U.S. Telecommunications Act 1965 for reference
“Policymakers must accept and
adapt to the reality that conver-
gence will be technology-driven
rather than regulation-driven.
The legal framework should
provide direction for innovation,
not play catch up with it”.
Chris Sherwood,
Head of Public Policy
at Allegro Group

27
FOOD AND CONSUMER – THE EMOTIONAL HAZARD
The food and drink sector is highly regulated worldwide. From guaranteeing the highest
standards of food safety and promoting healthier choices to encouraging sustainable
production and consumption, national regulators have progressively adopted a wide range of
regulatory standards to achieve these goals.
Forced by the imperatives of international trade in a world where food is no longer produced,
sold and consumed locally, governments and international organizations are continuously
aiming to align regulatory standards. Created in the early 1960s, the Codex Alimentarius – or
“Food Code” – is the collection of internationally recognized standards, codes of practice,
guidelines, and other recommendations relating to the production, composition and labelling
of safe and high quality food products.
When did regulatory convergence accelerate? More than 50 years after the creation of
the Codex Alimentarius Commission, regulatory cooperation in the field of food policy is a
reality. However, it has not accelerated to a stage where it can be referred to as regulatory
convergence, since protectionism and cultural differences remain prominent barriers despite
the exponential growth of food traded internationally.
Public concerns about food safety – especially in relation to novel foods, biotechnologies,
pesticides, food additives and contaminants – are often discussed in Codex meetings. Such
debates are highly emotional whilst codex standards are based on the best available science.
In this context, regulatory convergence in the food sector is subject to a series of push and
pull factors.
International Trade
The mediatisation of
“food safety scandals”
Health determinants and
the fight against obesity
Substance
Life-cycle stage
Geographical
breadth
Regional = Convergence is happening between regional trade
partners with long standing free trade agreements
(Uncertain) growth = Forceful factors such as TTIP could accelerate
convergence, but political, cultural and ethical barriers stand in the way

28
Protectionism: The imposition of non-tariff trade barriers motivated by protectionism is
still current practice in the agricultural field. Often the result of wider political or geopolitical
motivations, they still constitute a real barrier to regulatory convergence in the agri-food
sector. Geographical indications, also known as GIs, are an example of a protectionist measure
that impedes the convergence of food standards on a global scale since in this specific case,
such standards are defined by the origin of the product itself.
International trade: The removal of trade barriers,
especially non-tariff ones, has driven the alignment of
regulations and standards in the food sector. Ingredients
and pre-packaged products traded globally increasingly
have to meet the same standards of quality and safety,
usually defined by the Codex Alimentarius, in close
collaboration with the FAO and WTO. Food ingredients
and products imported from and exported to emerging
markets such as China and India are subject to particular
scrutiny to ensure that they meet the same quality
and safety standards as the products produced and
consumed in developed countries.
The mediatization of food safety scandals: Emotions, public opinion and the imperatives
of consumer protection can be drivers of regulatory convergence in the wake of food safety
scandals. Such stories, amplified by the international and social media, often drive discussions
on stricter standards or even a ban on a certain substances. Taking the example of Bisphenol
A (BPA), discussions as to whether the chemical should be banned from food packaging took
off as from 2010, when Canada declared BPA toxic and banned it in baby bottles. Following
Canada’s lead, eleven US States passed a bill banning BPA from baby bottles and sippy cups in
2011. In 2012, the US Food and Drug Administration declared the ban at the Federal level. The
EU, China and Malaysia adopted a similar regulations in 2011.
Public health concerns and the fight against obesity: Public health concerns related
to obesity and non-communicable diseases have been the driver of international regulatory
convergence in the field of nutrition. The World Health Organization (WHO), together with the
Codex, has been taking a leading role to drive convergence in the field of nutrition labelling,
profiling and reformulation, as well as advertising and marketing to children. Interestingly
enough, such convergence has also been facilitated by industry itself via a series of regional/
global self-regulatory commitments and initiatives.
“TTIP is the single most
important factor shaping global
regulatory convergence today.
It requires extremely strong
leadership and political will to
succeed, particularly on the U.S.
side.”
Lucinda Creighton,
Former Irish Minister
for European affairs
Protectionism
Cultural and ethical
differences
Lack of scientific
consensus

29
Cultural differences, ethics and public acceptance: As a consumer-led business, the
voice of consumers is paramount to shaping business and regulatory standards in the food
and drink sector. Cultural differences therefore constitute a barrier to international or global
regulatory convergence, when consumers do not accept an ingredient or product that is
well accepted in another region. Examples of this phenomenon include Genetically Modified
ingredients (GMs) or High Fructose Corn Syrup as a sugar replacement, which are for instance
well accepted by consumers in the United States but not in Europe. While the different
regulatory approaches on both sides of the Atlantic – risk-based in the US and precautionary
in the EU – are a reason for different set of standards, different cultural approaches and
consumer acceptance can also explain that regulatory convergence has been stalled on these
polemic issues.
Lack of scientific consensus: If there is one sector particularly subject to the struggle
of emotions versus science, it has to be the food and drink sector. Whilst the imperative of
food security and resource efficiency are pushing industry to innovate and explore the use of
nanotechnologies, GMs or cloning, science is not always unanimous. Taking the example of
artificial sweeteners, several claims based on studies linking their consumption with increased
risks of cancer have been dismissed by food safety authorities across the world. The additional
question of “safe alternatives”, when safety concerns are substantiated, has also been
hindering convergence towards a ban on Bisphenol A in food packaging for instance.
Which stakeholders are setting the rules?
International players, part of the United Nations System:
• Codex Alimentarius Commission
• Food and Agriculture Organization (FAO)
• World Health Organization (WHO)
• World Trade Organization (WTO)
Regional Food Safety Authorities*:
• EFSA (EU) – Driving convergence of food safety standards in Europe
• FDA (US) – Driving convergence of food safety standards on the America continent
• FSANZ (Australia and New Zealand) – Driving convergence of food safety standards in Asia
* Coordinated by the International Food Safety Authorities Network (INFOSAN, part of the
WHO system).
Which countries or regions are driving it? As the two world’s biggest importers and
exporters of agri-food products, the EU and US are leaders in the field of regulatory
convergence in their respective regions – and to some extent internationally.

30
Prospects for the future The conclusion of a deal between the EU and the US on the
Transatlantic Trade and Investment Partnership (TTIP) would be a milestone in the field of
regulatory convergence, especially in the field of food. Part of the contentious issues that are
delaying the bilateral trade agreement include the barriers identified as hurdles for regulatory
convergence, namely protectionism and the lack of public acceptance, based on cultural
differences. If both trade blocks – the biggest worldwide when it comes to agri-food products
– where to strike a deal and establish regulatory cooperation in the field, this will most likely
act as a catalyser for regulatory convergence in the field of food on a global scale. It is also
interesting to note that one of the major obstacles in the current EU-Japan FTA is related to
food and in particular geographical indications!

31
ENERGY AND ENVIRONMENT – THE GAME CHANGER
The environment does not stop at your border. There is nothing more intrinsically global than
the environment in which we live and the energy we need. We all breathe the same air, need
the same trees and water to be able to live. We all need energy to light our homes, drive our
cars, transport our food and medicines, and run our societies.
The stakes for energy and the environment are extremely high: it is about our planet and
all our lives, regardless of where we come from. Fighting the negative impacts on the
environment is a global challenge, requiring global and regional solutions. Still, regulatory
convergence – although happening – is not an easy win.
When did regulatory convergence accelerate?
At the international level, serious attempts to find common solutions to environmental
problems first came about in the 1970s, when the world was faced with acid rain and a hole in
the ozone layer, as well as an extremely severe oil crisis.
Intense negotiations led to the signature of legally binding environmental agreements in
1985 – the Sulphur Emissions Reductions Protocol signed by 25 parties including Russia but
excluding the USA – and in 1987 – the Montreal Protocol on substances that deplete the ozone
layer, ratified by 197 parties.
Since then, a variety of international and regional negotiations on specific environmental issues
have commenced – from mercury to global climate change. The Kyoto protocol was signed
in 1997 and entered into force in 2005, which was linked to the United Nations Framework
Convention on Climate Change (COP) and set international emissions reduction targets.
Despite these milestones, it took 21 COP meetings, an ever maturing global economy, and 20
years to get to a global agreement on emissions reduction in December 2015 in Paris.
In parallel and at more regional level, very specific arrangements to reduce energy
consumption, increase energy efficiency and reduce CO2 emissions from specific applications
have mushroomed since the 1990s.
Substance 3.0 = Legal Framework Convergence
Life-cycle stage
Geographical
breadth
International for the environment, regional for energy
Maturity for the environment, Growth for energy

32
Oil prices: With an unstable political situation in most oil
producing countries and extreme price volatility, countries
reliant on oil imports (such as Europe) have actively been
cooperating on ways to decrease dependency on oil,
especially in a context of increasing energy demand.
Energy demand: Societies across the globe increasingly
need energy to fuel their economy, industries and
houses. With energy demand and consumption on the
rise, regulators are cooperating to find smart ways to cap
trends through policy harmonization and the exchange of
information and best practice paradigms.
State of the environment: Science is indisputable and the state of the environment will
continue to deteriorate without strong policy action. As the environment does not stop at the
border, this is an area where global or at least regional action does not only make sense but is
also necessary to ensure success.
“It is our duty as a globally
operating company to protect
the environment. But we also
see it as a business opportunity
to take the lead and work on
harmonizing policy around the
globe.”
Frans Hoorelbeke,
CEO of Daikin Europe
Geopolitical stakes Finance Industrial needs
Geopolitical stakes: Despite the fact that countries
agree in principle on the need for robust environmental
action, individual stakes in negotiations can vary widely
and thereby slow down progress. Oil-producing countries
seeking to continue to export as long as possible and
“green economies” all need to sit around the same
negotiating table. Other economic factors, such as trade
relations, or political allegiances and tensions also protract
convergence efforts enormously. Particularly in the energy
field, where there are very specific local and regional
needs and trends, convergence is extremely complex.
Finance: Based on our experience of COP 21, finding
appropriate finance mechanisms that are acceptable to
both financing countries (such as the US or Europe) and financed regions (such as Africa, or
Asia, and even China) will be the issue that make or break any further global or regional deal
on climate change.
“Even if everyone has the
same objective – to protect the
environment – you still have
vastly different approaches to
policy. True convergence like
what was agreed in Paris in
December requires the buy-in of
all stakeholders if it’s going to
be effective at a regional level.”
Andrea Voigt, Director
General of EPEE
Oil Prices Energy Demand State of the
Environment

33
Prospects for the future The signature of the COP21 Agreement represents a major
breakthrough in global convergence, although the devil will be in the detail and a lot of work
remains to be done to fix the specifics of the agreement. However, the signature has given
trust and hope to the international community that countries across the globe can agree when
they really want.
Hope and positivism is spreading across other international fora as well as there seems to
be a real sense of urgency. For example, the world is negotiating a potential amendment
of the Montreal Protocol on ozone depleting substances (ODS), which would also include
hydrofluorocarbons (HFCs) which are the substances that have replaced ODS in the 1990s.
There is strong momentum for making it happen within the next months and political
opposition is evaporating slowly but surely.
Finally, when it comes to regional convergence such as emissions trading, or capping CO2
Emissions in specific applications again the devil will be in the detail. Various regions are
working on the implementation of their regional / local legislation such as the EU-ETS,
legislation on CO2 from cars. Due to a high degree of technicality, a strong (local) industrial
presence convergence is likely to remain regional rather than spreading out to a truly global level.
Which stakeholders are setting the rules?
• Global UN bodies such as the UNFCCC and UNEP.
• European Union’s DG Climate Action & Energy, led
by Commissioner Miguel Arias Cañete.
• US Environmental Protection Agency (EPA) and
particularly the initiative of US President Barack
Obama.
Which countries or regions are driving it?
• Europe: always has had the ambition to be seen as a
leader on climate change and environmental issues.
• China: where it was still very much in the developing state, the country was very critical of
environmental agreements, but has in recent years taken an increasingly active role due to
the very critical state of the environment domestically.
“Europe definitely takes the
lead in terms of environmental
protection. But it is only now
that regulators in the US and
China see that it is in their
interests to engage with the
international community on
policy.”
Frans Hoorelbeke,
CEO Daikin Europe
Industrial needs: Depending on the state of the economic development of a country,
domestic industry will have varying needs and interests to defend. When interest of industries
are not aligned, convergence is nearly always blocked.

34
HEALTHCARE – THE SLOW BURNER
How policies, laws and standards can guarantee the health and safety of people across the
world in an equitable and affordable manner, whilst rewarding investment in pharmaceutical
innovation, is a key challenge facing regulators across the globe.
The sensitivity of the healthcare sector for both governments and people represent at the
same time a challenge to, and an opportunity for, international convergence. Governments
are generally very careful in allowing any interference on their internal health regulatory
environment, yet the need to deal with the cross-border nature of most health-related
challenges has represented a powerful driver spurring international harmonization.
The healthcare sector (including pharmaceutical products and medical devices) is one of the
most regulated worldwide and there has been (and continues to be) highly visible signs of
regulatory convergence, focusing on safety of medicines and medical devices, mainly at two
different levels: not only within the EU but also between the EU and the US (especially through
the EU-US free trade agreement currently being negotiated). This regulatory convergence
trend has also spread to other countries in the world.
When did regulatory convergence accelerate? The Thalidomide tragedy in the late 1950s
and early 1960s prompted changes to EU countries’ legislations, to ensure that medicinal
products are authorized before being placed on the market. Indeed, much of the impetus
behind the adoption of the first EU law on pharmaceuticals (Council Directive 65/65/EC which
introduced clear rules for EU countries on the authorisation and distribution of medicinal
products) stemmed from the determination to prevent a recurrence of the thalidomide
disaster. This tragedy contributed to establish the principle in the EU that no medicinal
product must ever again be marketed without prior authorisation and exemplified the need for
evidence-based authorisation.
Since then, numerous legislations have been developed around this principle in Europe, with
the progressive harmonization of requirements for the granting of marketing authorizations
and post-marketing monitoring implemented across the entire EU.
Substance
Life-cycle stage
Geographical
breadth
Regional = Convergence is happening between regional trade
partners, for example through free trade agreements
Maturity = Forceful factors such as free trade agreements could
accelerate convergence, but political, cultural and ethical barriers
might stand in the way

35
International cooperation also spread beyond the EU driven by similar imperatives. Numerous
other safety disasters and cross-border fraud in the conduct of clinical trials and marketing
of drugs have led to a further strengthening of global requirements, especially in the form of
World Health Organization’s norms and standards to ensure safety and quality of medicines.
In addition, regulatory cooperation has also accelerated as a result of many governments
realizing the big benefits that harmonization can bring in terms of earlier access to medicines.
Harmonized medicine authorisation requirements mean that clinical trials can be mutually
recognised. Mutual recognition of inspections of companies’ facilities has led to better
verification of product quality and higher compliance rates.
Most recently, the alignment of healthcare policies is one of the key issues on the table of the
EU-US Transatlantic Trade and Investment Partnership (TTIP), and specifically how the two
trading blocs can harmonize rules around the safety of drugs and medical devices. Especially
when it comes to medical devices, regulatory convergence is high on the negotiators’ agenda,
with a three-fold objective: to achieve recognition of manufacturers’ quality management
systems audits, to achieve the convergence of systems for identifying and tracing medical
devices, and to achieve convergence of models for marketing submissions.
International
trade agreements
Medicines safety
breaches
Global health threats
International trade agreements: In general, the growing number of bilateral and
multilateral free trade agreements has provided governments interested in cooperating in
regulation with a platform to do so. We are seeing this as a trend particularly in the healthcare
sector, where governments attempt to harmonize, or at least achieve mutual recognition of the
respective legislative frameworks, around patient and consumer safety through these channels.
Medical safety breaches: Breaches and malpractices in procedures related to the safety
assessment of medicines can now have an impact beyond the specific country where
the breach/misconduct takes place. There is growing complexity in medicines and their
ingredients, and managing the risks and benefits requires international collaboration among
regulators to provide access to collective resources and the best available scientific and
technical expertise.
Global health threats: The increased interconnection of our world means also that
dangerous communicable diseases are not confined to one part of the globe. Global threats
represented by new and emerging health security risks such as Ebola or Zika virus require
a global public health response, but also a mutual understanding and recognition of safety
standards of treatment.

36
Differences in innovation
capability and approaches
Cultural differences, ethics
and public acceptance
Differences in healthcare
standards and priorities
Countries’ ability and approach to innovation: Regulators discussing the European/
international alignment of healthcare policies and regulations generally agree that research and
innovation play a huge part in driving equitable access to affordable and effective treatments.
However, whilst most regions and countries agree with the principle, their capacity to invest
in medical research and innovation varies considerably. Certain actors have relatively large
state aid at their disposal to invest into new drugs and other healthcare solutions, whilst
others are more cash-strapped countries and therefore limited in their funding capability.
There are also clear differences in the governments’ approaches to the stimulation of R&D and
pharmaceutical innovation; some rely on market incentives and robust intellectual property
policies; others use state aid, or indeed a mixture of all three. These differences make
international agreement on R&D and innovation policies in healthcare very difficult.
In addition, although the EU has adopted a few legislations in the field of medicines safety, the
capacity of the EU to shape national healthcare policies is rather limited due a resistance from EU
countries to delegate the control of their national health policies to the EU supranational level.
Cultural differences: Divergent approaches to transparency and publicly available
information are also slowing regulatory convergence. For example, EU legislation on the
transparency of clinical trial data, adopted in 2014, now requires clinical trial results be
made public. The transparency of clinical trial results is widely shared in the US but has
traditionally been more restricted to protect information that can be considered ‘commercially
confidential’. In the opinion of consumer organizations for example, free trade agreement with
‘excessive’ IP protection rules can lead to higher drug prices and less transparency on drug
safety data.
Differences in healthcare standards and priorities across regions: Whereas regulatory
convergence between the EU and the US is proceeding at a fast pace especially in the context
of TTIP negotiations, more problematic is global convergence between industrialized regions
and developing countries. In spite of the key role played by the WHO in promoting common
standards and norms, huge differences across regions in terms of investment in healthcare,
healthcare management and priorities can significantly hinder global cooperation, especially
when it comes to sensitive issues such as intellectual property protection and pricing policies.
Which stakeholders are setting the rules? A number of stakeholder groupings have
shaped and continue shaping healthcare policies and hence largely contribute to regulatory
convergence. These include:
• The patient community, represented through patient groups and disease organizations.
• The pharmaceutical industry as well as the global health community are active

37
influencers of healthcare policies. Pharmaceutical companies play a key role as they are
often multinational companies, active across different regions, and therefore have a
good overview of the differences and best practices of the different countries and can
also drive concerted change to regulation.
• Increasingly, regulators are making concerted efforts to exchange information and
request more and more information from manufacturers, at all stages pertinent to
setting global standards.
• Although not on all issues, the World Health Organization has long been a
coordinating authority on international health issues. WHO Guidelines and Recommen
-dations form the basis for national regulations when adopted by Member States.
There are also globally recognised clusters and forums that facilitate cooperation on
pharmaceutical and medical devices:
• The International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human Use (ICH), the front runner of regulatory
harmonization for medical products.
• The International Coalition of Medicines Regulatory Authorities (ICMRA), a new
global collaboration forum which brings together senior leaders to provide
coordinated, consistent, and strategic leadership in the increasingly globalized and
complex regulatory environment.
• The Life Science Innovation Forum of the Asia-Pacific Economic Cooperation (APEC),
which has the mandate to promote a strategic and coordinated approach to medical
product regulatory harmonization/convergence within the region.
• The International Medical Device Regulators Forum is voluntary group of medical
device regulators from around the world who have come together to accelerate
international medical device regulatory harmonization and convergence.
Which countries or regions are driving it? Regulatory convergence in the pharmaceutical
sector is highly visible within the EU and in free trade agreements that the EU is negotiating
with the rest of the world. In addition, the recognition of the major emerging markets such
as Brazil, Russia, India, China and Mexico has fostered the potential for changing medical
practices in these regions.
Prospects for the future In the near future, the approximation and harmonization of
healthcare policies and regulations that shape patient access to safe and affordable treatments
may increase slowly between similar blocks (eg between US and the EU). However, legal
frameworks are unlikely to achieve full convergence due to regional differences in culture,
approaches and purchasing power, and the fact that important regional groupings like the
EU have a relatively limited competence to set healthcare policies. In particular, regulatory
convergence on issues such as intellectual property protection is felt to be increasingly
problematic in light of the significant differences in healthcare management and priorities
depending on the economic development of the different regions in the world.

38
VI. Analysis and conclusions
REGULATORY CONVERGENCE AS AN INTERNATIONAL PHENOMENON
From our analysis, we have drawn seven key conclusions about regulatory convergence as an
international phenomenon.
1. Regulatory convergence is a reality, and efforts are set to increase as our economies
and societies continue to globalize
• There are a number of cross-cutting objectives driving regulatory convergence.
–– At a macro level, mutual benefit to economies and societies is at the heart of all
efforts to align rules and regulations.
–– At a micro level, regulators and stakeholders are pursuing wealth and job creation,
reduced costs and efficiency gains, competition, environment, consumer and citizen
protection, transparency requirements and global security.
• Ideologically and conceptually, regulatory convergence makes sense in many ways
and should theoretically contribute to closer cooperation and less conflict between
important and growing economies and societies.
• Practically, it runs into many challenges. The feasibility of true convergence is often
questioned in the implementation stage, when it becomes clear that common rules can
never truly account for the idiosyncrasies and unique dynamics of national contexts,
markets and sectors that exist in spite of globalization.
• For regulatory convergence to really be successful, it must be driven by honest,
transparent, and common interests and objectives between different parties, instill
standards and rules which are achievable and implementable in practice, retain a
certain degree of flexibility to allow for adaptation in national contexts, and have the
support of the stakeholders who will have to comply.
2. There are vast differences in the pace and success of regulatory convergence at a
sector level
• There are stark differences between sectors, with some experiencing regulatory
convergence much faster than others. Take ICT: the nature of online companies like
marketplaces or apps providers means that their products and services can be sold all
over the world at the click of a button. Consumers are not restricted by geographical
borders, making international cooperation on consumer protection an economic
necessity. Food policy, on the other hand, is still largely national or regional, with
cultural and ethical motivations and beliefs making it difficult or even preventing
convergence at the international level.
• There are considerable differences in regulatory convergence within sectors.
Coming back to the ICT example, we see considerable convergence in the field of
telecommunications, whilst international cooperation on how to regulate over-the-
top players like Google or Amazon is in its infancy, with regulators still struggling to
legislate at even a national or regional level.

39
The sector(s) most susceptible/suited to convergence
The sector(s) most susceptible/suited to convergence
3. Geopolitics are a defining factor in the speed and success of regulatory convergence
• Common interests and the respective power of countries and regional groups seeking to
harmonize regulation is absolutely critical to whether efforts are successful or not.
• Overall, we see the EU and the US as being the most influential geographies,
followed by Japan as a close second, when it comes to shaping international regulatory
convergence. Combined, they represent the world’s largest economies, and the EU is the
biggest trading block. They are also largely similar culturally and ideologically, facilitating
international cooperation. Although they do not always promote convergence (and
indeed there are clear cases when one actively obstructs the process), overall they can
be considered the most important proponents of policy and legal alignment. This is due
to many diverse reasons, including economic stagnation and huge potential gains to be
reaped from the breakdown of regulatory barriers to trade.
Global threats
(climate change, cyber-attacks)
International sectors, supply
chains and markets (capital, online)
Industry support for harmonized
rules
(energy, bank, internet)
COP 21 Climate Agreement
EU-U.S. Privacy Shield
Global rules for bank liquidity
requirements
ACCELERATING
FACTORS
REGULATORY
CONVERGENCE
1. Energy and environment
2. Financial services
3. ICT
Ethical and cultural differences
(genetic modification, European
cultural heritage)
Lack of scientific consensus
(nanotechnologies, cloning)
Stakeholder opposition to
harmonized rules (industry and
activists)
Starkly different standards,
policies and laws on issues
like genetically modified
ingredients and products,
artificial sweeteners, tobacco,
and medical products across
the globe
KEY
BARRIERS
REGULATORY
DIVERGENCE1. Healthcare
2. Food and consumer

40
• On the other hand, our analysis shows that countries such as China and Russia are
growing in importance when it comes to regulatory convergence (or indeed lack
thereof). As their GDPs increase24
, so does their geopolitical power. With this, comes
an amplified voice at the negotiating table when it comes to policy development.
4. Stakeholder groups play a significant role in the process, but their influence varies
widely by region
• Stakeholder groups are clearly in the driving seat when it comes to shaping regulatory
convergence.
• The five most prominent include decision-makers themselves, industry (including
associations, large corporations and small business communities), civil society groups
and NGOs, academic and scientific institutions, and international organizations like
WTO, WHO, or ISO.
• The degree of influence of these stakeholder groups differs vastly depending on a
number of factors, including:
• The nature and fundamental mission and objectives of the stakeholder in
question
• Geographical location
• Sector
• Issue
5. There are five common drivers of regulatory convergence in today’s economy
• Economic necessity
• International standardization
• The advent of information and communications technologies (ICTs)
• Free trade agreements
• Cataclysmic, one-off events
6. There are also significant hurdles to true regulatory alignment, which are here to stay
• Ideological, cultural, and ethical differences
• The rise of nationalism
• Legal misfit between transnational and national regulations
• Limited resources of domestic players to comply
• Different approaches to regulation
7. There are also significant hurdles to true regulatory alignment, which are here to stay
• Political unheaval
• Stakeholders’ positions and degree of support or resistance
24
http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts

41
THE IMPACT OF REGULATORY CONVERGENCE FOR ORGANIZATIONS:
THE GOOD, THE BEAUTIFUL, THE BAD AND THE UGLY
Regulatory convergence has considerable implications for all organizations, but particularly
those operating in an international environment.
The Good...
It is clear that regulatory convergence often produces real benefits for business, levelling
playing fields, reducing costs and facilitating access to new markets.
We believe successful regulatory convergence can offer opportunities for business in five key ways:
The Beautiful...
Financial reporting: A case study example of the benefits of regulation convergence
The financial sector is benefitting in many ways from regulatory convergence. According to the
International Federation of Accountants (IFAC)25
, the adoption and application of international
financial reporting procedures are increasing the relevance and portability of financial data,
facilitating the flow of capital between capital markets and geographical regions, and helping
regulators to adopt better regional/national policies based on more accurate information from the
private sector.
5
Exploit new commercial
opportunities
• Like greater return on investment for innovations
recognised by the international community
4
Access new markets and
customers
• Particularly in emerging economies which
are unable to develop their own high-quality
standards and adopt those of the international
community
3 Avoid risk
• through lower legal uncertainty and greater
transparency, a reduced threat of individual
market over-confidence and regulatory arbitrage
2 Reduce costs
• of compliance and cross-border information/
translational needs
1 Increase efficiency
• by streamlining operations across different
legal jurisdictions
25
https://www.ifac.org/publications-resources/global-regulatory-convergence-and-accountancy-profession

42
The Bad...
There are also downsides to regulatory convergence that must be considered26
.
The Ugly...
A case study example of the downsides of regulatory convergence
The EU-US Transatlantic Trade and Investment Partnership (TTIP) has received strong criticism
since the launch of negotiations27
. Opponents from NGO and civil society spheres in Europe
argue that regulatory cooperation is leading to a dilution of European standards on consumer
and environmental protection. Certain politicians oppose TTIP on the assumption that it
will lead to more protracted decision-making on both sides as a result of reporting and
consultation obligations.
26
https://www.boell.de/sites/default/files/ttip_study_regulatory_cooperation_under_ttip_1.pdf
27
Grayling takes no position or view on the TTIP negotiations.
5 Delays in regulatory action
• Through obligations to provide trading or other
partners with information or consult with them
on changes to the international legal framework.
4 Legal uncertainty
• Convergence can sometimes create legal
uncertainty due to its slow, incremental and
highly political nature and the impact this has
on forecasting potential outcomes.
3 Double regulation
• The application of international standards will
only work when domestic legal frameworks can
be appropriately adjusted.
2 ‘One-size-fits-all’
• International standards and regulations are, by
nature, unable to account for national contexts.
• This can lead to outright stakeholder
opposition, fragmented implementation, and
even political instability.
1 A race to the bottom?
• Regulatory convergence inevitably involves
compromise, and sometimes appropriately
stringent standards are dropped or watered
down in political negotiations.

43
VII. How to respond to regulatory convergence
Although regulatory risks and opportunities may sometimes seem confined to individual
jurisdictions, this is highly unlikely to remain the case forever. It is clear that regulatory
convergence impacts multinational organizations in many ways, some good, some not so
good. Lateral thinking and a global mind-set are intrinsic to mitigating key risks and exploiting
valuable opportunities that regulatory convergence offers up.
The key question then becomes, what should you do about it?
At Grayling, we believe there are three golden rules for any company/organization operating
in an international environment:
Executive understanding of regulatory convergence
The problem: Often, regulatory convergence is not fully understood nor a prominent
consideration of top executives when they develop their overarching business strategies.
Companies of all shapes and sizes set business objectives, and then analyze the regulatory risks
and opportunities attached to them.
We believe international regulatory developments should be an ex-ante rather than ex-post
reflection. Before identifying business goals, executives need to understand their regulatory
landscape and how it is likely to change. Without this knowledge, they can end up addressing
the wrong issues, engaging with the wrong stakeholders, at the wrong level. Regulation all too
often only reaches the C-suite when there is a fire to put out.
The solution: There is a strong business case for thinking about regulatory convergence in the
boardroom, and integrating it into long-term commercial strategies. By looking at the legal
landscape from a global perspective and understanding where changes are coming from down
the line, Boards of Directors can more accurately assess where their business objectives and
strategy make commercial sense, and where they do not.
Take a major bank aiming to restructure in a bid to reduce operating costs and optimise
synergies. In the planning phase, the Board of Directors will look at many factors, like where the
HQ, sales and production teams are located, whether the new structure should favor expansion
or downsizing, if new product lines will be introduced, or further acquisitions are planned.
Regulatory convergence should play a part in answering all of these questions. Post-financial
crisis, new laws have been enacted across the globe to tightly regulate every aspect of a
bank’s business, from the separation of proprietary trading and how foreign branches are
governed to which booking models it uses28
. The degree of similarity or difference between
28
Legal Entity Restructuring: new trends and challenges in a changing regulatory environment http://en.finance.sia-partners.com/legal-entity-restructur-
ing-new-trends-and-challenges-changing-regulatory-environment#sthash.Jus82QdZ.dpuf
UNDERSTAND
what regulatory convergence
means at C-suite level
INTEGRATE
this understanding into your
Public Affairs strategy
LEVERAGE
regulatory convergence
to your advantage

44
these kinds of laws across jurisdictions is important, because it directly impacts the legal
viability of the bank’s new structure in different markets.
INTEGRATING REGULATORY CONVERGENCE INTO YOUR PUBLIC
AFFAIRS STRATEGY
It is critical that companies’ Public Affairs/Government Relations teams integrate regulatory
convergence into every step of their strategies. In order to do this, you need to think globally
at every stage in the process.
THINK OUTSIDE OF YOUR
IMMEDIATE ‘TO DO’ LIST
to identify the global policy/regulatory
issues that will impact your business in
the short and long-term
PRIORITIZE REGULATORY ISSUES
by analyzing the degree of business
impact, the timeline for change, and
the accelerants/obstacles to the
reform going through
ASSESS YOUR CAPABILITY
TO SHAPE POLICIES
at the local, national, regional, and
international level. Where are your
touchpoints of influence, and can you
reach them?
SET YOUR PUBLIC
AFFAIRS OBJECTIVES
according to your desired policy
(and implicitly commercial)
outcomes
DEVELOP YOUR PUBLIC
AFFAIRS STRATEGY
around how you position yourself on
your issue(s), what you ask for, and
how you will achieve your goals
LAUNCH ACTIVITIES AROUND FIVE
KEY PILLARS
• Political intelligence and monitoring
• Message and collateral development
• Proactive advocacy and
communications
• Direct lobbying and risk mitigation
• Third-party endorsement
PERIODICALLY MEASURE
AND ADAPT
based on a set of Key Performance
Indicators (KPIs) and changes in your
internal and regulatory environment
5
4 3
21
6
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