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Summary week 5 and 6 Corporate and White-Collar Crime
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Summary of all the mandatory articles from week 5 and 6 that you need to learn for quiz 3
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1OECD Regulatory Enforcement and Inspections Toolkit
Introduction
The purpose of the Toolkit is to build on the Principles to offer government officials, regulators,
stakeholders and experts a simple tool that allows assessing the level of development of the
inspection and enforcement system in a given jurisdiction, or of a particular institution or structure,
to identify strengths and weaknesses, and potential areas for improvement.
The Toolkit is not be in any way binding for OECD countries. We acknowledge that there are
significant differences between jurisdictions in how regulatory enforcement is organised. The Toolkit
should form a universal and sufficiently flexible basis for evaluation and self-assessment. A good
inspection and enforcement system should simultaneously aim at delivering the best possible
outcomes in terms of risk prevention or mitigation and promoting economic prosperity, enhancing
welfare and pursuing the public interest. Doing so without exceedingly increasing costs for the state
and burden for regulated subjects, and ensure trust and satisfaction from different stakeholders,
whose perspectives are often conflicting. This is not only challenging to achieve, but also difficult to
measure. First, because data is often unavailable, or not necessarily reliable, due to limitations in
measurement methods. Second, because even if data is available and trusted, inspections and
enforcement only have very indirect effects on the indicators that would be most relevant to the
regulatory goals. Enforcement will be taken in its broad meaning, covering all activities of state
structures aimed at promoting compliance and reaching regulations’ outcomes. To distinguish the
two meanings of enforcement, regulatory enforcement will refer to the broad understanding, and
enforcement actions to the narrower sense. Inspections will be understood as any type of visit or
check conducted by authorised officials on products or business premises, activities, documents etc.
Risk should be understood here as the combination of the likelihood of an adverse event (hazard,
harm) occurring, and of the potential magnitude of the damage caused.
Criterion 4: Responsive regulation
Enforcement should be based on “responsive regulation” principles: inspection enforcement actions
should be modulated depending on the profile and behaviour of specific businesses.
1. Applicable legislation allows for (or does not prohibit) differentiated (responsive) enforcement
and provides an appropriate framework for discretion -> There is strong evidence that
responsive regulation delivers better outcomes than uniform sanctioning of each and every
violation. It is thus indispensable that legislation explicitly allows for differentiation in
enforcement response (from simple warning to full weight of sanctions or prosecution)
depending on the circumstances. Enforcement discretion should be clearly allowed (as it will
anyway exist in practice), but also restrained by the application of principles and criteria. There
should also be requirements for enforcement structures to be accountable for their decisions.
2. The gradation of available sanctions is adequate to allow credible deterrence through
escalation of sanctions (“light” enough to be used when needed, “strong” enough to outweigh
potential profits from non-compliance)-> The potential sanctions must be sufficiently strong to
outweigh the potential benefits from violations – but they should be sufficiently flexible that
there is a credible threat that inspectors and enforcement agencies will actually use them. If only
very severe sanctions (e.g. shutting down the establishment) are available, then they will very
rarely be used (at least in most jurisdictions) because the economic and social consequences, and
potential political backlash, would be considerable. At the same time, inspectorates should
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