Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Musings that Would Not Amuse Compliance Minded Companies

I have to start with the caveat that I personally believe that compliance with laws is necessary, important and fundamental.  However, today is a cold and rainy day, which may be the reason why I am sharing my thoughts about the financial bailout and the auto bailout in such a negative manner.

Normally, the enforcers of laws, such as the tax man and the regulatory police, have a zero tolerance and the line that if one makes a mistake as far as the law is concerned, there is a price to pay.  This is a reasonably position and it causes people and companies to follow the law.

However, with the bailouts, the governments are overlooking poor behaviour on the parts of companies.  rather than punishing the poor behaviour or letting market forces take their normal course, the government is taking the unusual step of providing financial assistance with taxpayers' money. 

I am not oposed to bailouts per se.  However, there does not appear to be similar compassion when a company makes mistakes that have not caused any harm.  If a company imports a good and misclassifies the good, there is a fine for that innocent mistake.  If a company fails to provide information with a long enough lead time before the goods get to the border, there is a fine for that innocent misjudgment.  If a professor works with dual-nationality students, he could go to jail for an export control violation.  If a Canadian company exports U.S.-made goods to a friendly country, they may be fined for export control violations.  If an American travels to Cuba, he/she may get into trouble.

Every day, the tax man is auditing companies that try to comply with the laws and the tax man, wanting to raise an assessment, tries to expand the law to cover some apparent non-compliance.  Companies can be put into bankruptcy over such differences in opinion.

I am not against the bailouts - I am for fairness.  There is something that does not seem fair about the inconsistent treatment.

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