Regulatory Compliance as Legal Defense Strategy

Our lawyers in Honduras, experts in Litigation, Arbitration, and Compliance, share this article on how regulatory compliance has become a key strategic tool for the legal defense of companies in both judicial and arbitral settings. 

Introduction 
Regulatory compliance, commonly referred to as "compliance" in English, has evolved from being a mere formal requirement to becoming a key component in risk management and legal strategy for companies. Today, it is no longer sufficient to simply establish policies to prevent crimes or corporate integrity systems; businesses now seek for these policies to serve as genuine defensive assets in the face of potential litigation or arbitration. Many experts suggest that a robust compliance program can act as both evidence and a liability mitigation mechanism in litigation and international commercial arbitration. 

The Evolution of Regulatory Compliance 
We must understand that companies play a significant role in the economic development of our countries. Therefore, good corporate governance is essential to ensure this impact translates into growth and well-being. From this premise stems the importance of organizations having effective mechanisms to timely detect any regulatory non-compliance or criminal conduct that could endanger the integrity of the economic system. 

Hence, the importance of regulatory compliance must be emphasized. It is understood as the set of policies and procedures adopted by an organization to ensure adherence to applicable laws and ethical standards. Initially, it was perceived as a tool to prevent internal misconduct and avoid penalties for violations. However, as Paula Ramírez and Juan Ferré highlight in their book Compliance, Corporate Criminal Law, and Good Business Governance, the introduction of Corporate Criminal Liability in several European and Latin American countries—sometimes incorporated into criminal codes—has compelled many organizations to implement systems aimed at preventing crimes by executives and employees. 

As a result, a solid compliance program not only reduces the likelihood of committing illegal acts but can also serve as an effective defense tool in legal and arbitration proceedings. Promoting a corporate culture that values transparency and compliance can help reduce penalties, improve the company’s image with regulators, and, in legal contexts, offer compelling evidence that the company acted responsibly. 

Compliance as a Defense Tool 
Given that Spain has incorporated Corporate Criminal Liability into its Penal Code, the Spanish Compliance Association (ASCOM) conducted a study in 2020 to understand the role of compliance departments in organizations. The study concluded that one of the most relevant benefits of implementing compliance programs is the exemption or mitigation of criminal liability. Demonstrating that a company has an effective compliance program can help—and even prevent—criminal or civil liability. In countries such as Spain, Chile, and Mexico, where Corporate Criminal Liability is codified, companies have begun to adopt specialized compliance subsystems aimed at crime prevention, known as criminal compliance programs, also referred to as compliance programs or criminal compliance programs. 

In general terms, compliance programs cover all regulatory frameworks relevant to the organization, including laws, regulations, codes of conduct, and internal policies. On the other hand, criminal compliance programs focus exclusively on crime prevention. Although both types of programs share methodologies—such as risk analysis, protocol development, training, and oversight—they differ in scope, applicable legal frameworks, and procedural benefits such as liability exemptions or reductions. To implement both effectively, it is advisable to establish an integrated system following standards like ISO 19600 and ISO 37001, and to design and incorporate a specific module for criminal risk prevention that includes a risk map, an independent supervisory body, and the necessary documentation to support the process. 

Presenting a code of ethics, maintaining continuous training records, conducting audit checks, and preparing internal reports contribute to the perception that the company is acting in good faith. This can be crucial in cases where intent or gross negligence is in question. Moreover, compliance officers have become key witnesses in many legal proceedings; their testimony can demonstrate how the company strives to train and supervise its employees. 

Ultimately, while evidentiary standards may vary by jurisdiction, having a solid and well-documented compliance program becomes a strategic tool in both court proceedings and arbitration. It helps demonstrate the company’s diligence and strengthens its defense against any claims. 

Conclusion 
The adoption of a compliance program is no longer merely a preventive requirement; it has become a key strategy for legal defense. In the context of litigation and arbitration, having procedures, audits, and records from a solid compliance system can strengthen the company's position. This not only helps reduce sanctions and avoid liability but can also lead to more favorable settlements. 

The implementation of criminal compliance subsystems provides organizations with specific tools that complement and strengthen the broader regulatory compliance system. By presenting a solid and well-structured program, companies not only reduce the likelihood of violations but also bolster their defense: a clear code of ethics, evidence of continuous training, audit records, and the testimony of compliance officers can tilt the balance in their favor before judges and arbitral tribunals. In this way, compliance ceases to be a cost and becomes a protective shield that demonstrates diligence and the intention to act in good faith. 

Therefore, every organization should view compliance as a lever of value: designing, implementing, and maintaining both general and criminal compliance programs is no longer optional. Governments are pushing organizations to "switch sides"—to stand on the side of the law. 

In summary, the intersection of regulation, arbitration, and litigation shows that regulatory compliance has become the new frontier of corporate legal strategy. Organizations that recognize this reality and act accordingly will be better prepared to face an increasingly challenging and competitive legal environment. 

References 

The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.