Investigation, compliance and financial crime

An investigation is a systematic and independent examination of the facts within a business, typically in cases of suspected corruption, financial misconduct, breaches of competition rules, whistleblowing regarding reprehensible conduct, or breaches of internal guidelines. A fact-finding investigation is often used in workplace environment cases. Organisations should initiate an investigation as soon as concrete suspicions arise. Prompt and orderly handling can limit reputational damage, reduce the risk of corporate penalties and ensure the necessary documentation is secured.

The Transparency Act requires larger Norwegian companies, and larger foreign companies that offer goods and services in Norway and are liable for tax here, to carry out due diligence assessments to identify risks of breaches of human rights and decent working conditions, both in their own operations and in the supply chain.

Businesses must publish an annual report by 30 June each year, and otherwise in the event of significant changes to the risk assessments, as well as having procedures in place to respond to requests for information within three weeks (or up to two months in the case of particularly burdensome requests). The Consumer Authority supervises compliance with the Act. Failure to comply may result in administrative fines.

Responsibility for compliance with the Act rests with the business. The board of directors has overall management responsibility under general company law and should ensure that due diligence assessments and reports are anchored at board level.

Businesses that regularly employ at least five employees are required to have written procedures for internal whistleblowing. This obligation may also apply to smaller businesses if circumstances so warrant. The procedures must at least include an encouragement to report reprehensible circumstances, the procedure for reporting, and the employer's procedure for receiving, handling and following up on the report. The Working Environment Act provides the whistleblower with strong protection against retaliation. Inadequate whistleblowing procedures may result in liability for damages on the part of the employer.

Compliance means adherence — that the business complies with applicable laws, regulations and internal guidelines. A compliance lawyer helps businesses establish and maintain compliance systems, carry out compliance risk analyses, draw up anti-corruption programmes and ethical guidelines, and ensure compliance with requirements relating to the Transparency Act and ESG. Good compliance reduces the risk of sanctions, reputational damage and corporate penalties.

Corporate criminal liability means that a company — not just individuals — can be subject to criminal penalties for offences committed by someone on behalf of the company. This applies, for example, to corruption, breach of fiduciary duty and breaches of competition law. The court conducts a comprehensive assessment, and a well-functioning compliance system and anti-corruption programme can have a direct bearing on whether corporate criminal liability is imposed and on the level of any penalty.