Risks: does your business have immunity? Compliance risks (III)

Risks: does your business have immunity? Compliance risks (III)

Rolandas Mištautas, Head of Law Firm KONSUS LEGAL

The energetic new head of the Lithuanian Business Confederation once said at a prestigious conference under the vaults of the Lithuanian Academy of Sciences, "Stop thinking of us entrepreneurs as potential criminals and crooks! This is nothing more than a silly public myth from the "Wild 1990s!"

He was right. Absolutely. Business is a positive phenomenon. Especially since Lithuanian companies are aware of the laws and regulations related to business and follow them carefully.

There are cool initiatives such as socially responsible business, "White Gloves" and many others. Not to mention that in 2020, when a pandemic almost paralyses our country and our healthcare system, the first to come to the rescue are the medical profession, the military and... entrepreneurs.

But - and this is quite strange - despite this, business is often (still!) equated with "evil" by public authorities. With the "shadow", which is supposedly the only thing to blame for Lithuania's tight budget, the underpayment of taxes, and many other things that are usually not even related to business as a phenomenon.

It is necessary, in the common interest, to get rid of false and offensive myths and to be bold in assessing the real situation. We are living in the 21st century and much has changed in thirty years. It is time to banish the old stereotypes and to recognise, universally, that business and the "shadow" are two different factors.

The careless, hasty lumping of the two together causes great social, moral, ethical and, to some extent, even economic damage. I argue that this attitude increases public distrust both of business as a field of activity and of the individuals who create, develop and expand it.

As long as this is the prevailing, misguided prejudice, it discourages many bright, talented people from thinking about going into business for themselves and thus naturally contributing to the success of our country.

Especially since, for example, if we think not only about money, profits and added values, but more broadly, it is obvious that: the more jobs, the higher the profits and the higher the salaries they bring, the more satisfied citizens in Lithuania will be with their lives. The more such citizens, the more resilient these citizens are to internal and external threats, to all kinds of confusion, discontent, etc. And the more resilient the citizens, the safer, in simple terms, the safer the country and each family living in it. Yours too.

So, when we admire famous sportsmen, doctors, soldiers, politicians or diplomats, we must not forget the businessmen who patiently toil for the common good.

It goes without saying that even businessmen and women make mistakes. However, the vast majority of infringements are not due to a "deliberate intention" by all of them, the business people, not to comply with the law, as is often assumed by those who know little or nothing about business themselves.

Most infringements are the result of ambiguities in a particular law or its interpretation. The social effectiveness of the legal rules is not yet sufficient today, and this has recently led to a significant increase in the number of problems in the business sector, which are linked precisely to activities that do not comply with the letter of the law and with the legal rules mentioned above.

In a situation where the same norms of conduct and the corresponding actions to be taken are perceived and treated in one way by business and in another way by some public authorities, there is a multitude of misunderstandings, disputes, troubles, unnecessary tensions and, at times, disastrous costs.

In 99 cases out of 100, the pursuit of justice, the precise determination of circumstances, etc., is easily left to the discretion of the courts. Court proceedings are usually lengthy, exhausting, lead to acrimonious conflicts between public authorities and business representatives, and often, because of the aforementioned public stereotypes or the journalists' passion for sensationalism, cost the reputation of the company, its directors and its staff, which has been cherished for many years.

These pitfalls can be avoided in advance: the problem of clarity as a principle of law poses a particular risk in administrative and criminal jurisprudence, in terms of additional costs, fees or sometimes unjustified liability.

Conclusion: continuous monitoring of the legal economic business environment and effective, timely legal advice are essential to ensure successful business decisions.

Updated: 2023-03-31