Regulatory compliance is the term generally used to describe the policies and processes, which companies have in place to ensure that they follow the laws, rules and regulations applicable to their industry and jurisdiction. Since there is an extensive variety of federal, state and local laws and regulations, Congress created governmental units, bureaus, agencies, departments, commissions, boards, etc. to carry out government regulatory needs, particularly:
i) to supervise the compliance of private sector with the laws by requiring periodic reports or establishment of certain practices,
ii) to provide additional guidance by enacting administrative rules and procedures, and
iii) to enforce the law by bringing administrative and judicial proceedings. Governmental agencies can bring investigations, audits, fines, penalties, injunctions and other administrative and legal actions for non-compliance. The agencies have an authority to hold a public hearing, which is similar to court hearing, and to dispose the matter. If the parties do not agree with the outcome of such hearing, judicial review is available by request of any involved party.
The goal of the agencies’ work is to ensure that private economy is properly functioning, the equal opportunities are available to all market participants, no fraudulent or improper practices are utilized by the private companies, the interests and rights of the consumers are observed and protected and the offered products and services are satisfactory both in quality and price. The U.S. regulatory process was established with the goal of setting standards, enforcement and providing services to the businesses. Different agencies have authority over a particular industry and almost all industries are under certain compliance requirements. As an example, some of the most popular regulated activities include commerce, import/export, health, agriculture, consumer services, education, welfare, labor, transportation, environment, workplace safety, financial services and transactions, corporate governance, communications, and many others. Accordingly, the regular and proper compliance with the applicable laws and regulations is one of the main concerns of business owners.
The overall success and profitability of the business depends on the implementation and compliance with the relevant regulations. Initially it may seem overwhelming to comply with all applicable regulations, but there are certainly practical, time and cost-effective ways to deal with it. The business owners should address regulatory issues before establishing a new enterprise and set the necessary procedures of compliance at the initial stage of the business operations.