This document summarizes a presentation given by Dr. Igor Máté on the rise of compliance in Central and Eastern Europe. It discusses how regulatory requirements have increased over the past decade due to laws like the US Patriot Act and UK Bribery Act. It also describes how compliance has evolved from a conventional, legal focus to an advanced approach that considers business and social responsibilities. An advanced compliance program aims to build a culture of sound ethics, strengthen governance, and improve competitiveness by addressing expectations of all stakeholders.

1. Snapshot on Compliance
Dr. Igor Máté
Group Compliance Manager (CEE)
CEE Compliance Summit / March, 2013

2. RISE OF COMPLIANCE IN CEE: NEW CHALLENGES AHEAD
Decade between 2000 and 2010
• regulatory boom targeting financial industry
• foreign laws with extraterritorial jurisdiction (US Patriot Act, UK Bribery• foreign laws with extraterritorial jurisdiction (US Patriot Act, UK Bribery
Act) also rule
• strengthened law enforcement
• emerging non-legal aspects beyond the legal and regulatory compliance
• show up of new stakeholders
• regulatory dumping imposed on companies of 2004 EU accession

3. ENHANCED REGULATORY REGIME AND LAW ENFORCEMENT
Iconic items (example of Hungary)
• 2000 – Hungarian Financial Supervisory Authority (HFSA) (significantly
similar to the FSA)
• 2000 – Amendment Competition Act (broaden definition of abuse of
dominant position)
• 2002 – Sarbanes-Oxley Act
• 2005 – EU Unfair Commercial Practices Directive

4. ABOVE THE LAW
Non-legal regulatory elements
• consumer protection vs. consumer affairs
• charity vs. corporate social responsibility
• environmental friendly vs. environmental awareness• environmental friendly vs. environmental awareness

5. PRESSURES ON A COMPANY

6. COMPLIANCE – A POSSIBLE ANSWER
Good Compliance consists of a method supporting the company in
structuring, operating and controlling itself in order to achieve:
• maintaining appropriate compliance with all the applicable legal and
regulatory requirements under which the company is carrying out its
activities;
• fulfilling the long-term strategic goal of the owners while• fulfilling the long-term strategic goal of the owners while
• taking into account the expectations of all the key stakeholders, and in
particular:
• consider and care for the interests of employees,
• work to maintain excellent relations with both customers and suppliers
• take account of the needs of the environment and the community
• building a culture, based on a foundation of sound business ethics

7. COMPLIANCE CONCEPTS
CONVENTIONAL COMPLIANCE ADVANCED COMPLIANCE
addressed to the management
who liaise with shareowners
addressed to all employees
who liaise with all stakeholders
aims accountability aims responsibilityaims accountability aims responsibility
exclusive
considers company
as a regulatory licensed operation
inclusive
as a good corporate citizen considers also
• industry and market standards
• reputation / public confidence
• media / public opinion
• customers and consumers
• pressure groups
• communities
• political opinion / upcoming legislation

8. CONVENTIONAL vs. ADVANCED
CONVENTIONAL COMPLIANCE ADVANCED COMPLIANCE
follower forerunner
legal & regulatory legal & regulatory + business + social
one way (declarative) round (communicative)one way (declarative) round (communicative)
internal internal and external
single, separated focus multiple, combined focus
checklisting matrixing
control guidance / support

9. ROLE WITHIN THE BUSINESS
D R I V E R S B A L A N C E S C H E C K S
undertaking / risk taking safeguarding controlling
business compliance I risk audit I controllingbusiness compliance I risk audit I controlling
management
dynamic dynamic dynamic/static static
PERFORMANCE CONFORMANCE CONVENTIONAL
COMPLIANCE

10. KEY BENEFITS
• strengthening governance
• increasing risk management
• boosting corporate integrity and corporate identity
• lifting approach form accountability to responsibility
• enhancing responsiveness
• promoting stakeholders’ (mutual) understanding and cooperation
• safeguarding reputation
• preventing corporate failures
• building corporate responsibility
• improving competitiveness

11. RESPONSIBILITIES
CONTROLLING
monitoring
overseeing
evaluating
analysing
channelling
challengingchallenging
risk identifying CATALYZING
> liaising
> facilitating
> negotiating
SUPPORTING
• advising business
• training employees
• issuing recommendations
• policy and procedure drafting
• implementing Group / EU / international / standards
• spreading compliance standards to subsidiaries

12. POSITION WITHIN THE ORGANIZATION
COMPLIANCE
• reports to CEO
• liaises with Group Compliance
• supervises respective functions of domestic and foreign subsidiaries• supervises respective functions of domestic and foreign subsidiaries
• co-operates with fellow functions
• legal and regulatory
• internal audit
• consumer protection
• marketing and communications
• operations
• HR / training
• Group management

13. Further on Compliance
Please contact the author at
https://hu.linkedin.com/in/igormate