How to Handle US & EU Corporate Compliance Together

Global companies must navigate a complicated system of regulations in different jurisdictions with varying laws and legal entities. The United States and European Union Compliance is often managed separately, creating duplicated roles, unnecessary procedures, and costly controls riddled with gaps.

Globalization & Risk Exposure: Increased globalization comes with a myriad of risks that must be mitigated. These include exposure to corruption laws such as the Foreign Corrupt Practices Act in the United States and the UK Bribery Act in Europe, as well as differing privacy regulations like the California Consumer Privacy Act and the General Data Protection Regulation. There are also ESG mandates like the SEC Climate Disclosure Rules and the EU’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive. Because of the overlaps, there is a need for a unified approach…the structure ensures that compliance standards set by both the US and EU sides are adhered to without incurring the risk of fines from either side.

Compliance Fatigue: Legal, finance, or operations teams forced to manage multi-layered and complex task lists that include quarterly, annual, and ad hoc submissions are bound to tire out. Centralized entity management streams and automated reminders have been shown to reduce management fatigue by 50%.

Efficiency Gains: The consolidation of GRC (Governance, Risk & Compliance) tools helps streamline processes across an organization by improving the coordination of departments. A singular platform allows the elimination of repetitive work, guarantees a unified standard of evidence retrieval, and provides real-time snapshots and dashboards at the corporate family level.

When you integrate policies, controls, and technology, compliance changes from a cost center to a competitive advantage, and demonstrates strong US and EU corporate compliance to stakeholders and customers.

US vs. EU Compliance: Key Differences Every Global Company Should Know

US teams concentrating on state-specific CCPA notice and consent banners create a privacy program to enhance cross-border transfer underwriting. Prescriptive approach detailing runs mandated Data Protection Impact Assessments (DPIAs). 

Privacy policy created under the premise of meeting GDPR standards enables streamlined adjustments to meet CCPA fulfillment standards.

Knowing the overlaps and gaps within each set of these requirements allows firms to create a cross-border compliance management policy with one control architecture that meets both.  

Operational excellence tips:  

• Leverage Jira Service Management or a similar tool to funnel submissions through legal, tax, and finance.  
• Have the process owners attest to control effectiveness monthly through control self-assessment (CSAs).
• Perform health assessments or mini-audits of high-risk processes quarterly to identify risks early on.  

EU Corporate Governance and Compliance Standards Explained

Accompanies existing frameworks, adds its own universe of directives, including:  

CSRD (Corporate Sustainability Reporting Directive)  

• Broadens non-financial reporting to include double materiality, climate risks, and social considerations.  
• Covers ~50,000 companies (including large MNEs), which is tenfold the scope of the previous Non-Financial Reporting Directive.  
• Mandates ESEF tagging of ESG metrics alongside financial statements.  

DAC7 (Digital Platforms Reporting)  

• Requires digital marketplaces to report seller revenue together with VAT ID and personal information to tax authorities.  
• Provides for annual electronic exchange, enabling EU member states to tax income earned across borders.  

CSDDD (Corporate Sustainability Due Diligence Directive)  

• Progressive entry by scale; €450m revenue in 2027, €150m in 2028, €40m in 2029.  
• Implies the need for supply-chain audits, grievance mechanisms, and risk-based due diligence policies.  

GDPR (General Data Protection Regulation)  

• It has an extraterritorial application. Data Protection Officers(DPOs) and binding SCCs are needed.  
• Must notify of breach within 72 hours and can incur fines up to 4% of global turnover.

EU Whistleblower Directive

• By December of 2023, a system must exist for internal reporting of corporate wrongdoing. Protected channels for whistleblowers, which lie within the European Union Whistleblower Directive, must be integrated by December.  

These are EU corporate governance standards that impose multi-jurisdictional filing obligations that can vary from country to country; hence, establishing a central sustainability reporting process is one way many of these filings can be handled-providing a parallel to the SOX control environment.

Pro Tip: Create an “EU compliance hub” that binds all policy templates together and links training materials on Lynda/LinkedIn for local teams. 

How to Manage Cross-Border Compliance Without Overwhelm

Checklist for cross-border compliance management:

Create Your Legal Entity Map  

• Compile all representative branches, subsidiaries, and EU-based offices.
• Log:
  • entity type
  • local address
  • primary activities
  • corporate form (SA, LLC, GmbH, etc.)

Create Procedures and Policies Binders 

• Compile an anti-bribery, data privacy, and ESG policy for each jurisdiction and build a Global Policy Library.
• Organizational policies using version control (SharePoint, Confluence) enable tracking of local changes and control documents.

One platform to simplify global tax and compliance

See why high-growth companies trust Commenda

Schedule a call

One GRC Platform

• Decide on a solution that enables audit documentation of records from state compliance filings, EU data retention policies, OSHA, and ESG metrics segregation.
• Partner alongside the employee data management system (Workday) to automate payroll, SOC-1 data, headcount, and post-CSRD and CSDDD with HR data.

Create A Cross-Column Compliance Committee

• Leaders from Legal, Tax, IT, Operations, and Sustainability are invited to attend one meeting every quarter.
• Check for open action items, incoming deadlines, changes to regulations, and any other prerequisites that need attention.  

Continuous Training & Communication

• Mandatory online training course for GDPR for the entire region of Europe once a year; United States refresher webinars on FCPA; ESG briefings every three months.
• Best practices, new rules, and enforcement actions are consolidated and disseminated in a monthly newsletter.  

Centralizing International Entity Compliance: Frameworks That Work

Standard Operating Procedures (SOPs)  

• SOP for maintaining a new entity shall include: registration, setting up a local bank account, acquiring a tax ID, and local statutory filings.  
• SOP for deregistering an organization shall cover: dissolution, submitting final returns, and data retention. 

Collection of Internal Controls

• Every individual control must be mapped to more than one framework: SOX 404, CSRD assurance, and Article 30 of GDPR record-keeping.
• Employ a control taxonomy that includes: whistleblower channels, due diligence, record retention, and access controls.

Unified Documents Repository

• Board resolutions, licenses, permits, and charters must be kept in a document management system that is secure, such as iManage. 
• Documents must be tagged by compliance area, jurisdiction, and entity for easy access and retrieval.  

Training and Certification programs

• Sales personnel are required to obtain an FCPA Certification, staff in EMEA are required to have a GDPR Certification, and procurement officers are required to have training on ESG due diligence.  
• Conduct audits by keeping training logs and using those for audit purposes.

Choosing the Right Corporate Compliance Software for Global Companies

Of utmost priority when assessing platforms are:

Another such solution includes:

• GRC by OneTrust for privacy, ESG, and ethics-related governance.
• Workiva for sustained integrated SOX financial controls, sectional reporting, and SOX, and managing controls across integrated reporting entities.
• Riskonnect for enterprise risk management in virtually any region.

Solving Data Privacy Conflicts Between US and EU Regulations

GDPR vs Privacy in the US

• Scope: Any processing of EU personal data falls under GDPR. CCPA/CPRA governs California residents’ data.
• Data Subject Rights: The right to be forgotten by GDPR vs. the right to deletion/opt out of sale under CCPA.
• Fines & Penalties: Up to €20M for GDPR, while under the CPPA, it’s up to $7,500 per violation.

Harmonized Data Governance Framework

• Data Inventory & Mapping: It requires classifying data by categories such as PII and sensitive.
• Consent Management: Set up a global consent banner collecting GDPR opt-in and CCPA opt-out selections.
• DPIAs & Risk Assessments: Create standard templates for one assessment combining GDPR DPIA and CCPA risk profile.
• Breach Response: One global plan with tiered notification waits – 72 for GDPR, 45 days for CCPA.  

Working in sync like this helps prioritize regulatory reporting requirements alignment and single out duplicate processes by around 40 percent.

ESG, Due Diligence & the Evolving Risk Landscape

Managing CSDDD & Climate Obligations

• Supply-Chain Audits: Tier-1 and Tier-2 suppliers’ human rights, as well as environmental practices, are to be assessed by third-party audit firms.
• Grievance Mechanisms: Set up multilingual hotlines or platforms for workers based in Asia, Africa, and Latin American countries.
• Transition Plans: Set 2030 and 2050 targets, quantify Scope 1-3 emissions with the GHG Protocol, and specify in annual sustainability reports.  
• Investor Communications: Disclosures should be part of TCFD recommendations and the SEC’s proposed climate risk publications.  

Litigation & Private Actions

• Allegations of human rights or environmental breaches under national CSDDD law permit NGOs to sue in EU courts, where they could obtain an injunction or damages claim or be granted the court’s decision to impose restrictions on them. 
• By actively publishing supply chain information and detailed action plans showing what needs to be done to address any issues, these efforts reduce the chance of lawsuits, which demonstrates good faith actions.

In-House vs. Outsourced Compliance: What Global Firms Prefer

Recommended hybrid approach: 

• The core in-house team develops policies, trains personnel, and manages dashboards, which house all internal metrics.  
• Outsource niche tasks like zero-day law monitoring alongside tier-two supply-chain audits and specialized ESG reporting.  

Together, this approach allows effective multinational compliance automation, ensuring an ideal balance of costs and expertise.

Staying Ahead of Global Regulatory Changes: A Compliance Roadmap

• Monitor Rule-Change Platforms: Subscribing to Thomson Reuters Regulatory Intelligence, LexisNexis, or Bloomberg Law is essential.  
• Regulator Newsfeeds & RSS: SEC EDGAR updates, European Commission Legal Affairs and member state gazettes, legal developments, and national official publications’ newsfeeds.  
• Industry Forums & Associations: Regular calls with BSA, ICC, AmCham, and the S&P Global for peer best practices.  
• Quarterly Compliance Retreats: Half-day sessions for regional leads to analyze upcoming deadlines and conduct analyses, followed by collaborative gap analyses.

This roadmap maintains your US and EU corporate compliance program on top of quickly shifting rules and regulations.

How Commenda Helps You Simplify US and EU Corporate Compliance

Adhering to corporate compliance obligations in multiple jurisdictions doesn’t need to be a struggle. Commenda’s platform automates and centralizes the entire US and EU compliance processes, which allows you to:

Automate Entity Filings & Registrations

• Auto-file and submit proprietary report filings, registered-agent notifications, beneficial-ownership disclosures, and more for all 50 US states and 27 EU member countries.
• Gain advanced notifications of all upcoming deadlines in real-time so you will never be late for a renewal or accumulate late-filing penalties.

Unify Multi-Jurisdictional Monitoring

• Continuously monitor all regulatory changes, such as the new state privacy law in California and the EU directive transposition date in Germany, and obtain specific notifications.
• Map the changes directly to your entity footprint and affected controls, along with policy update workflows.

Centralized Documentation & Evidence

• Store confidential board minutes, compliance attestations, ESG reports, and DPIAs in a single secure, searchable vault.
• Exhibit complete audit trails, including user-level access logs, for on-demand verification of compliance, including SOX, GDPR, CSRD, CSDDD, and more.

Enhance efficiency in Reporting & Dashboards

• Aggregate compliance metrics from various jurisdictions into unified dashboards that display your US compliance calendar, together with your EU corporate governance obligations at a glance.  
• Modify executive summary reports for legal, finance, and sustainability divisions with just a few clicks.  

Simplify Third-Party Due Diligence

• Distribute standardized questionnaires to suppliers and joint-venture partners, obtain corresponding answers, and automatically assess their risk in terms of anti-bribery, ESG, and human-rights factors.  
• Connect your procurement and operations systems so that only compliant and pre-qualified vendors can be engaged.  

Dedicated Support & Expertise  

• Proactive compliance management uses proven templates, proactive-strategy sessions, and regulatory playbooks authored by trusted industry leaders to ensure your program stays one step ahead.  
• Managed compliance provides you with a dedicated Commenda compliance specialist who navigates relevant US and EU corporate compliance intricacies for you.  

Book your tailored compliance platform demo with us today and experience firsthand the ease of automating worldwide submissions and having your entity risk monitored.