Hong Kong staff may be liable for compliance breaches

Author: Liana Cafolla | Date: 11 Nov 2015

Businesses urged to train employees at every level ahead of new legislation

Employees in Hong Kong who violate new competition legislation may be held personally liable for breaches – which means companies should be training their staff on compliance, the head of the city’s statutory Competition Commission said last week.
 
Dr Stanley Wong, chief executive of the commission, said companies needed to prepare a compliance policy and ensure frontline staff were aware of their obligations under the ordinance, including the risk of potential breaches caused by casually sharing anti-competitive industry information while attending professional conferences and seminars. “The reality is, even if you’re a low-level salesperson, you may be personally liable,” he said, according to a report in the South China Morning Post.
 
The ordinance, which will come into force on December 14, is the first anti-competitive legislation to be enacted in Hong Kong and has taken more than three years to come into effect since being passed by the Legislative Council. The new rules are aimed at prohibiting and deterring anti-competitive behaviour in any sector and cover four behaviours described as seriously anti-competitive: price-fixing, whether verbally or in writing; output restriction; market sharing, including non-poaching agreements; and bid rigging.
 
Judgements will be enforced by a new competition tribunal which has been set up as part of the Hong Kong judiciary. The tribunal will be empowered to take action against individuals and companies, and can impose penalties ranging from fines and damages to disqualifying directors, among other measures.
 
Wong spoke while unveiling a practical toolkit aimed at helping small and medium enterprises – which comprise more than 98 per cent of Hong Kong’s business landscape – comply with the ordinance. Companies’ compliance policies need to be tailored to the needs of individual firms, he said.
 
“There is no one-size-fits-all solution to formulating a compliance strategy,” said Wong. “Businesses are advised to develop and implement a strategy suitable for their size and risk profile. Enterprises are also encouraged to keep a record of what has been done to mitigate potential competition law risks for their businesses.”
 
The toolkit advocates building a compliance plan that identifies and mitigates risks and is reviewed regularly as part of an ongoing compliance process. The complete toolkit is available online at www.compcomm.hk.
 
In the run-up to the implementation of the ordinance, companies are advised to contact their trade and industry associations for further advice. The commission is planning to take part in information-sharing events targeting SMEs and other businesses, including the World SME Expo organised by the Hong Kong Trade Development Council, which will be held from December 3-5.