One of the main topics in corporate management today is regarding governance & compliance standards. These are intended to ensure the continuation of the company and to avoid fraud. The treasury area is notoriously susceptible, whether this is in the area of processing payment transactions, with direct access to the “cash desk”; or cases that became known in the past from the press where money was embezzled by circumventing risk management and concluding financial derivatives. The goal is to protect companies against attacks both from outside and inside.
“Fake president” emails are an old trick, but the scam is still successful. There are always more new methods such as the sending of “real invoices,” but with changes to the bank details of the recipient when the email system of suppliers is taken over. Companies also face challenges related to security precautions undertaken to protect against cyber criminality such as hacker attacks, trojan horses, etc.. It is critical to ensure process security, compliance with specific requirements and to create awareness in the organization.
In addition, companies also have to deal with increasing external requirements such as reviewing and complying with sanction and embargo guidelines. This is because a violation will be punished not only with high fines, but also usually involves an extensive loss of reputation or even the revoking of a license in countries such as the USA. In addition to fraud protection and compliance with money laundering regulations or embargos, the treasury governance & compliance area also handles compliance with tax requirements.
Base Erosion and Profit Shifting (BEPS) describes the intentional reduction of tax measurement bases and the cross-border shifting of profits. Treasury operations with an in-house bank character are affected by this. This involves calculating surcharges on, for example, inter-company loans, internal FX transactions or guarantees so that they are in compliance with the arm’s length principle and can be justified in fiscal tax audits.
Our Support in Governance & Compliance
Governance and compliance in the aforementioned form is a complex challenge in companies and looks different in each one due to their individual business models. For example:
- Active fraud prevention by adopting a reasonable policy, providing training courses, selecting a suitable IT tool, e.g., a treasury management system
- Ensuring compliance with money laundering regulations, paying attention to sanction lists and embargos in payment transactions
- Ensuring tax compliance in connection with BEPS as part of defining surcharges for financial transactions within a company
- Creating awareness of the interaction between various regulations & requirements in the treasury area and compliance with them: KonTraG, EMIR, Mifid, WpHG, FATCA, IFRS 9, KYC, etc.
We will work with you to hold a workshop, conduct interviews and do desk research to evaluate the situation at your company. We will sketch a picture for you and identify weak points and gaps. This involves:
We do not just provide you with recommendations for action, but also back you up with our expertise in the field and our competent advisors, also during the implementation of the defined measures in the area of treasury governance & compliance. Detailed documentation of the introduced measures round out the procedure and ensure sustainability.