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Romania Adopts Risk-Based Approach to Compliance, Stressing Substance Over Form
The Romanian Competition Council (RCC) has taken a bold step towards redefining competition compliance in Romania by adopting a risk-based approach, emphasizing substance over form. According to the RCC’s new guidelines, compliance programs are no longer limited to larger international companies but are now an essential requirement for all companies, regardless of their size or sector.
Key Takeaways
- The effectiveness of a compliance program is directly linked to its implementation and the credibility and autonomy of the representative in charge.
- Personalized, tailor-made programs are necessary, with content varying significantly from one company to another.
- Risk analysis is crucial for developing an effective compliance program.
Risk Analysis Crucial
To develop an effective compliance program, companies must conduct a risk analysis to identify specific competition risks applicable to their business and the measures needed to address them. This involves identifying potential risks such as:
- Company size
- Geographical presence
- Activity sector
- Level in the commercial chain
- Third-party relations
- And others
Components of Compliance Programs
While there is no one-size-fits-all compliance program, the RCC identifies several essential components, including:
- A comprehensive compliance manual outlining main competition provisions, risks, and recommended courses of conduct.
- Monitoring procedures to ensure company activities are compliant with competition laws.
- Disciplinary measures for employees found in breach of these rules.
Implementation Measures
The implementation process involves a 4-step risk management approach: risk identification, assessment, evaluation, and management. This includes:
- Internal and external audits
- Taking into account changes in the company’s activity
Dissemination of Compliance Program
A compliance program that is not disseminated internally and externally does not achieve its purpose. The RCC recommends mandatory compliance training for all employees, either through direct interaction or online platforms. Trade associations also play a crucial role in promoting competition compliance, especially for smaller companies.
Competition Due Diligence
The guidelines emphasize the importance of competition due diligence in M&As transactions and commercial agreements. Companies must assess third-party risks and implement effective competition compliance programs.
Relevance of Compliance Guide
An effective compliance program is not only essential for minimizing risk but also reduces or exonerates costs resulting from anti-competitive behavior. It allows companies to apply for leniency, which can be a significant advantage in settlement negotiations.
Conclusion
The RCC has the authority to impose fines of up to 10% of global turnover and other corrective measures if companies fail to comply with competition laws. With this new risk-based approach, Romanian companies are now better equipped to navigate the complex world of competition compliance.