Regardless of whether your organization has established an organizational unit specialized in the management of such risks, either exclusively or in addition to other tasks, it is important to be aware that compliance risks affect your company in all circumstances. In the public sector, these cases have typically been handled with the involvement of an integrity consultant, but the European Union Directive 2019/1937 on the protection of persons who report violations of EU law (implemented by December 17, 2021) defines several mandatory compliance requirements for the public sector, and organization with more than 50 employees, thus, the construction of compliance systems will be mandatory for the entire public sector and a significant part of the private sector as well.
In Hungary, so far compliance issue has mostly appeared in the public sphere, and only a part of them are about integrity requirements. The task of the integrity consultant is to assess and eliminate integrity and corruption risks related to the operation of state administration bodies. Compliance itself means much broader adequacy, the part of the organization’s internal control system, which is responsible for the identification and management of compliance risks at the organizational level (compliance risk: the risk that legal or supervisory sanctions will result in a significant financial loss or loss of reputation for the organization due to its failure to comply with any law, regulation, rule, self-regulatory body regulation or behavioral standard applicable to its activities.
It cannot be overlooked that a well-functioning compliance system can be a competitive advantage, even in a public procurement procedure, and can also be an effective tool for self-clarification. Sustainability and environmental protection requirements are weighing more and more heavily on economic operators’ shoulders. The Barna Orsolya Law Firm was one of the first in Hungary to start working on the construction of sustainability compliance systems, which can be used to effectively assess risks and avoid possible legal violations and fines.
Moreover, we assist our clients in the construction, operation, and incident management of whistleblowing systems without having to assign client resources. Today, the EU legal environment makes it mandatory that either employees or third parties can report a concern anonymously. For these reports, a channel must be built that enables, on the one hand, the action mechanisms to be launched efficiently and quickly in the event of confirmed violation of rights, and on the other hand, the reporter cannot suffer existential damage due to loss of anonymity, yet still be able to follow up on the actions taken as a result of his report.
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