Seven Key Principles

Economic Progress

This requires TSO's to consider the economic impact of their actions and the reasonableness of efforts by companies. Company size and resources should be kept in mind when intervention is being considered.

Risk Assessment

Officers must take a broad view of risk and take into account matters like -

• Past compliance record
• Are there good risk management systems
• External accreditation
• Management competence and co-operation

Proactive Advice

This calls for regulators to act proactively and assist companies in advance to comply with their duties. Practical and accessible advice should be given, generally free of charge. Home authorities will be the source of this guidance and this principle should make it easier for a company to use that advice as a defence.

Inspections

These should be targeted and justified by a proper risk assessment. They should concentrate on areas where breach is very likely and would give rise to a serious risk.

Information

Companies should not have to supply unnecessary or repetitive information. Officers should consider the true benefit of information requested and the cost of providing it.

Enforcement Action

The positive approach required under the Code should reduce non-compliance. This allows regulators to concentrate on the serious violators and target them proportionately. 

Accountability

Officers should be courteous and efficient. They should accept feedback as to how they carry out their duties. A proper complaints procedure is required and the performance of regulators should be measured against relevant standards.

Practical Impact

The Code represents a major shift in the enforcement regime.

Home authorities acquire a much bigger role, becoming adviser and guide as to due diligence. They are on the front line, for better or worse.

Those with good relationships with a home authority will benefit substantially. Anyone who has spent years cultivating that relationship has done the right thing. Anyone who hasn't will really struggle.

Tips

Despite the friendly, positive tone of the Code, you may find yourself faced with an aggressive TSO. What do you do?

• Do not agree to a taped interview
• Tell them you will answer written questions instead
• Get legal assistance before answering them
• Do not be bullied over timescales

The TSO may be less convinced of his case than he suggests. A set of careful written answers will flush this out and show how serious he really is, without causing damage to your defence if he is.

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