On July 26, 2023, an important message was delivered from the offices of the Commerce, Justice, and Treasury Departments in the form of a “Tri-Seal Compliance Note”. This second-ever issued note marks a significant moment in the development of corporate compliance and violation disclosure standards, aiming to guide businesses towards a path of self-regulatory transparency. The contents of this Note have been explored and in-depth analysis has been provided by Akin Gump Strauss Hauer & Feld LLP, which can be found here.
The note outlines the governmental expectation of voluntary disclosure of sanctions, export, and other potential violations of national security laws. It urges organizations to embark on voluntary self-disclosures (VSDs) without regard to whether there are administrative or criminal violations at hand. The emphasis on the behavior is designed to promote a culture of transparency, help prevent potential infractions, and to assist in maintaining national security.
VSDs can be a strong, proactive approach for corporations in managing and mitigating potential legal issues. Companies are encouraged to integrate such disclosures into their compliance operations. A strategic use of VSDs can not only flag and remedy potential violations but can also serve to strengthen company reputation and trust amongst regulators, stakeholders, and the public.
The Tri-Seal Compliance Note and the emphasis on voluntary disclosures echo the global trend towards corporate transparency and accountability. For legal professionals and corporate executives managing compliance, this shift necessitates a thorough understanding of the intricacies of these expectations.
As policies and guidelines like the Tri-Seal Compliance Note continue to emerge, legal experts will need to become well-versed in the evolving legal landscape. These professionals will have the essential role of deciphering these guidelines and making strategic recommendations on how they should be integrated into corporate compliance systems. As public and regulatory scrutiny intensify, maintaining a comprehensive compliance program that addresses these changes will be paramount.