12 Feb Set yourself up properly now, in expectation of greater oversight later
Right now for small and medium Australian businesses who set up offshore, there is usually little in the way of industry compliance checking of the offshore operation with regards to areas like data security, privacy legislation, and staff training. There are exceptions of course, banking and healthcare being two industries that are more heavily monitored.
It is reasonable to assume however, that as offshoring grows, and industry and government awareness of offshoring grows, that compliance will not be far behind.
We expect that at some stage in the future, Australian SMEs that operate in industries where compliance is important will find themselves being audited, and/or required to sign statutory declarations that advise that their business and offshore providers/teams are all fully compliant with all Australian legislation.
It may perhaps happen that the insurance industry will be leveraged as the thin edge of the wedge to provide enforcement, by refusing insurance coverage (and payouts) to those who do not have proven offshore compliance.
This recent order by ASIC gives a hint of what will follow.
Now it would appear that this organisation under review had raised the attention of ASIC because of the non-compliant loans it was issuing, not because there was any complaint or concern with it’s offshore staff. Nevertheless, they were ordered to engage an independent consultant to review the training and compliance of their entire team, including their offshore Chinese team:
The additional licence condition requires Award Mortgage Solutions to engage an independent consultant to review its compliance obligations under the National Consumer Credit Protection Act 2009 (National Credit Act) including the following aspects:
- general conduct
- responsible lending, which is a key obligation of the National Credit Act, and
- the appointment, supervision and training of its representatives, both in Australia and overseas.
Easy Offshore recommends that the best way to approach the likely future compliance obligations is to start with this in mind. If you have regulation compliance requirements in your indsutry, set up your team so that you are compliant now and so that you can be audited in the future without a major upheaval. Any kind of compliant workspace and staffing method is available, right down to some of the most difficult, like PCI DSS and even HIPAA from America.
Easy Offshore can help match you with office space and providers that help you meet your potential compliance obligations.