An enforceable undertaking is a legal agreement which obliges an organisation to carry out specific activities after they have breached a regulation. It is a written undertaking, given to and accepted by the regulator that is enforceable in a court and a constructive alternative to prosecution.
It allows an alleged offender to voluntarily enter into a binding agreement to undertake tasks to address the breach and prevent future issues. The actions in an enforceable undertaking must deliver benefits to a business, industry sector or community that go beyond mere compliance with the law.
Some of the most common requirements imposed under enforceable undertakings include:
- Amending systems and procedures: The company must amend or create systems or procedures to ensure that controls are embedded to mitigate further risk of non-compliance.
- Developing a compliance program: The company must formulate and implement a compliance program which is designed to ensure the company is able to comply with its obligations.
- Training: The company must ensure that all employees, officers and authorised representatives working as sales representatives etc are trained in the operations, practices and procedures.
- Providing Compensation: The company must rectify the situation within a specified time by compensating clients.
- Corrective advertising: The company must publish a corrective advertisement.
- Appointment of an independent expert: The company must appoint a person who has particular expertise in the area who is independent of the company and its officers to be the company’s independent expert for the purposes of the undertaking.