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Coronavirus – Mitigating compliance risk – Spain

  • Spain
  • Coronavirus
  • Coronavirus - Country overview


The crisis generated by COVID-19 is leading to unprecedented challenges for governments, multinationals, SMEs, freelancers and for society. As we start noticing its effects, strategic compliance issues arise, offering companies the opportunity to strengthen their controls to prevent operational, legal, business or reputational risks arising from the current crisis. At Eversheds Sutherland Nicea we want to accompany you during this crisis to ensure the continuity and protection of your business.

To this end, we will publish a series of informational alerts where we will analyze the main external and internal risks, as well as the mitigation measures to be considered. In this first alert we deal exclusively with external risks to which companies should pay attention during this crisis.

COVID-19: external risks

Crisis periods such as the current one may increase the external risks to which companies are exposed, either because they have not previously foreseen them in their risk analysis, or because the likelihood or impact of materializing was not assessed taking into account exceptional situations such as the current one. This may lead to problems like supply chain breakage, paralysis of activities, and exacerbated (or unfair) competitiveness in the market, among others. In this sense, companies face high-risk external situations during this crisis such as:

  • increased aggressiveness of commercial departments that in the current situation may try to avoid losing business (with a direct impact on their variable remuneration) or market share using unethical sales techniques consistent, for example, in overestimating or even distorting the characteristics of the products or services they offer, or incurring into corrupt practices to obtain or maintain business. Companies could also be tempted to accept certain undue advantages offered by third parties in order to ensure the supply of certain products
  • lack of strictness in the application of controls by purchasing departments which, in the face of a foreseeable shortage, may seek to supply in certain markets (or with certain suppliers) where human rights infringements are common (i.e. with the use of child labor) or where labor rights are not respected
  • laxity in the application of controls on collections and payments that may favor the reception or transfer of funds from/to high-risk jurisdictions, from/to sanctioned persons/entities or included in blacklists, with the implications in the areas of money laundering and financing of terrorism that it may entail
  • non-application or ineffectiveness of controls on imports and exports, as well as with sanctioned countries at international level, that may result in violations of national and international regulations
  • finally, the CNMC (Spanish Competition Market Commission) has already warned regarding the potential increase of the "Cartels Crisis" during this period. Companies should therefore pay special attention to the risk of anti-competitive agreements between competitors, that may hinder or restrict supply chains or make products more expensive

COVID-19: measures to mitigate risk

  • review of the risk analysis to adapt it to the current crisis, considering the new elements of risk that were not foreseen before or not with the intensity that the situation now requires in terms of likelihood or impact
  • updating compliance policies and procedures to adapt them to the prevention of additional or more intense risks generated as a result of the crisis
  • strengthening the compliance and crisis management committees, which must be attentive to the day-to-day business and available to ensure compliance with regulatory requirements, both internal and external
  • comprehensive review of third-party procurement policies and risk management policies ensuring the strengthening of the established controls (due diligence, compliance certifications, and negotiation and enforcement of compliance clauses in signed or to-be signed contracts)
  • periodic communication and participation in online training sessions, especially focused on those risks for which a higher likelihood of materialization and/or impact has been identified based on the current situation, offering alternatives such as gamification, which can contribute to the participation of all people involved
  • two-way communication with the business departments with more inherent risks, as well as considering the opening of reporting channels to third parties (consumers, customers, suppliers or the open market), which can facilitate the early detection of non-compliances
  • review of the objectives of the commercial or sales departments creating, for instance, incentives for those employees who demonstrate their ethical conduct and alignment with the values of the company, something that, although a priori may seem not feasible, is a practice already widespread among large companies at international level

Prepare the turn

Crisis times lead to new opportunities to re-evaluate businesses, strengthen the relationship with stakeholders and update Compliance strategies which can contribute to improve the reputation and therefore the position and competitiveness of companies. From Eversheds Sutherland Nicea, we can help you cushion the COVID-19's impact, emerge strong from this crisis and adapt to this new paradigm. In our next alert we will discuss the main internal risks that companies face as consequence of the COVID-19 impact.