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Non-compliance is a serious offense: High liability risks and criminal consequences


A failure to observe compliance rules is no trivial offense. Non-compliance can mean serious consequences, both in terms of civil and criminal law. This was the clear message put forth by the compliance experts at the recent CMS Business Breakfast. The high relevance of the topic – in part due to numerous non-compliance scandals in recent months – was evidenced by the event’s large attendance numbers. Held in early March, it was part of the CMS event series, which this year focuses on the topics of Risk & Prevention and Digital Economy.

Many companies remain unaware that non-compliance not only holds significant liability for the company and its management, but also leads to criminal consequences. In short, anyone who does not rigorously establish – and enforce – compliant behaviour among the company’s executives and employees is exposed to high liability risks and the possibility of criminal proceedings.

At the second CMS Business Breakfast of the year, compliance experts were on hand to answer questions from the many participants present. Experts included: Rainer Wachter, Head of Compliance Practice CMS Austria; Harald Potinecke, Head of Compliance Practice CMS Germany; and criminal law expert and former Federal Minister of Justice, Wolfgang Brandstetter.

It is indisputable that regulatory requirements are increasing, and anti-corruption laws and codes of conduct becoming increasingly complex. The risk of compliance violations can be minimised with the establishment of a tailor-made compliance structure. "According to certain foreign rights, this may also have an impact or exclusion effect, in particular according to the UK Bribery Act, as well as the U.S. Foreign Corrupt Practices Act," says Wachter.

Comprehensive CMS Compliance Practice in CEE

With a team of approximately 25 lawyers, the CMS office in Vienna has a strong compliance practice (by European standards). The team advises corporations and medium-sized companies in Austria and Central and Eastern Europe on the development of compliance programmes. This is not all that is included in their comprehensive range of services, however, as Rainer Wachter explains: "We not only advise companies on the implementation or adaptation of compliance management systems, but also conduct internal investigations into incidents or suspected cases of non-compliance, and advise management on what subsequent measures to take. Last but not least, we advise and represent companies in related criminal proceedings."

CMS Trending Topics 2018

The EU General Data Protection Regulation and Compliance are just two of the many topics that CMS will address in a comprehensive series of informational events for companies. In addition to Risk & Prevention, a second major area – Digital Economy – will be addressed. CMS Vienna further organises numerous events to present and discuss increasingly important legal issues related to FinTechs, Cybercrime, Smart Contracts, and ICO (Initial Coin Offering), among others.

Photos of Rainer Wachter and the CMS Business Breakfast can be found here, for free use:

Rainer Wachter

Wolfgang Brandstetter, Rainer Wachter, Harald Potinecke (v.l.n.r.)

Further events at CMS in Vienna can be found on the website cms.law under Events.

Non-compliance is a serious offense: High liability risks and criminal consequences
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Rainer Wachter