Creative Compliance Research Articles

Creative compliance and selective visibility: How Chinese queer uploaders performing identities on the Douyin platform

The growth in video-sharing social media platform use has changed modes of communication, which has helped to improve the visibility of gender and sexual minority groups. This tendency became evident given the social distancing during the COVID-19 pandemic. Likewise, the use of these platforms empowers LGBTQ individuals living in China to share knowledge and experiences, receive social and emotional support and so on. Previous studies rarely interrogate Chinese queer groups’ socially sanctioned performance of identities on popular video-sharing platforms such as Douyin. This article undertakes a preliminary discussion of that research gap. It examines the conditions that enable such activities and concludes with a discussion of the strategies and methods that Chinese queer uploaders use in the process. Simply put, this article explores how the queer uploaders accommodate and negotiate their identity performances within a heterosexual and mainstream popular social media environment.

Outsourcing elderly care to private companies in Russia: (non)compliance and creative compliance as responses to the principal-agent problem

ABSTRACT Why do regions (non)comply or creatively comply in response to federal-driven reforms in Russia? This article studies the interplay of interests and incentives prompted by a contract between a principal and agents on the one hand, and shaped by the regional socio-economic context on the other. The analysis proved that the incapacity of the public sector to satisfy the societal demand for services in urbanised areas encouraged compliance. The creative compliance results from a need to demonstrate commitment to the reform in regions with a lack of favourable conditions. Non-compliance is adopted in ethnic republics and in relatively poor regions.

Creative compliance, neutralization techniques, and palaeontological ethics

This paper uses the sociological and criminological concepts of creative compliance and techniques of neutralization to consider reactions to ongoing ethical issues within the paleontological community. Using the ethical and legal issues concerning the study of fossil-bearing amber from Myanmar, and drawing upon interviews from palaeontologists conducted by the TRANSFORM project, this paper argues that palaeontological research has a strong social component which should not only be reflected in the ethical approval and oversight of palaeontological projects, but also reflected in the teaching of palaeontology at university level.

Current trends and the way forward on call center research in a post-covid world

Applying sociolinguistic perspectives, this issue explores the most recent developments in call center research and the impact call center work has on agents. Significant issues are addressed in call center interactions, including web chat, agent stigmatization, agent resistance, agent training and the impact of Covid-19. The essays provide a forum where developments are critically reviewed and future areas of research explored, including how call center work can be improved. The first article by Nielsen addresses the impact of the Covid-19 pandemic in India and working from home through the notions of chronotopes. The second article in the issue by Lockwood develops a framework for the assessment of written web chats in offshore call centers. The third essay by Friginal examines how the voice assessment of Filipino agents can be improved through caller clarification sequences. Tovar’s paper, the fourth paper in this collection, focuses on the strain that working in a call center creates for agents and how they resolve this. The fifth paper by Orthaber examines resistance and passive compliance in call center interactions in a Slovenian call center using turn-by-turn micro-analysis of service conversations with a focus on silences. Despite the different angles, the papers share themes of resistance (creative compliance) and the development of a new register of call center speak, while also highlighting agency among call center workers.

Litigations with the home State and internationalization

PurposeThis paper aims to investigate whether Foreign Direct Investment (FDI) can be driven by the creative compliance knowledge that firms gather in their home country through litigations with the government.Design/methodology/approachThe authors draw on the knowledge-based view and organizational learning theory to argue that there is an inverted U-shaped relationship between experience in litigating with the home State and a firm’s level of FDI. The authors test this hypothesis using negative binomial regressions on a sample of Spanish listed firms for the period between 1986 and 2008.FindingsThe findings of this study confirm the hypothesized inverted U-shaped relationship between a firm’s experience in litigating with the home State and its FDI levels. Firms seem to face an exploration–exploitation dilemma regarding their compliance with domestic regulation. Once they have accumulated a certain amount of creative compliance knowledge, it would be better for them to exploit it both domestically and internationally in the form of creative compliance routines, instead of continuing to push the limits of regulation.Originality/valueFirms willing to explore the gray areas of the law are usually forced to litigate with the State. As a result, they develop creative compliance knowledge that they can incorporate into their legal routines and capabilities so that they can later exploit it in foreign countries. To the best of the authors’ knowledge, this is the first paper that attempts to understand the influence of creative compliance knowledge on a firm’s international investments.

International regime complexes and corporate crime: a research agenda based on the Volkswagen diesel fraud case

Criminological literature has often pointed to the absence or weakness of existing international regulation as important explanatory factors of corporate crime in global markets. This paper addresses the presence of multiple parallel, nested and overlapping regulatory regimes, and explores how such international regime complexity creates pathways to corporate crime. We use the Volkswagen diesel fraud case as a plausibility probe to illustrate such pathways to corporate crime. Our tentative analysis suggests that Volkswagen’s fraud in the US cannot be seen as independent of the EU regulatory regime, which was more lenient and offered various opportunities for creative compliance. We conclude that a regime complexity perspective is a promising addition to existing explanations of corporate crime in international settings and suggest a research agenda for future in-depth analyses of the implications of parallel and conflicting regulatory regimes for corporate crime.

Aiding the state: administrative capacity and creative compliance with European state aid rules in new member states

ABSTRACT The article advances a new explanation of the role of administrative capacity in compliance with European Union (EU) rules. I argue that strong administrative capacity fosters not only compliance but creative compliance where capable civil servants aid determined governments in following formal EU rules while challenging their substance. I develop this argument by comparing two new member states that increased levels of state aid post-crisis but on different types: ‘neoliberal’ Estonia reporting proportionally more on ‘bad’ vertical aid than purportedly ‘illiberal’ Hungary. Drawing on original empirical data, I explain that Hungary has engaged in more creative compliance due to more cohesive ideological commitment to state intervention (a will) and stronger administrative capacity to achieve objectives while minimizing EU scrutiny and sanction (a way). Creative compliance with single market rules presents another challenge to the EU’s ability to enforce uniform rules to ensure a ‘level playing field’ within the single market.

Gaming the System: An Investigation of Small Business Owners’ Attitudes to Tax Avoidance, Tax Planning, and Tax Evasion

To a large extent, the body of research that looks at individuals’ compliance with the law focuses on the dichotomy between compliance as rule-following and noncompliance as rule-breaking. However, a fascinating case of noncompliance is that where individuals selectively follow existing rules in order to circumvent the legal principle, this behaviour has been termed ‘creative compliance.’ In the current study, we investigated the psychological underpinnings of ‘creative compliance’ by assessing the attitudes of tax avoidance (significant minimisation of tax liability perceived to be legal) and tax evasion (illegal tax minimisation) of 330 owners of small businesses. We found that tax avoidance and tax evasion were perceived as qualitatively distinct by respondents and that they were predicted by different factors. While both tax avoidance and tax evasion were associated with weak personal norms to contribute to the tax system, tax avoidance was associated with a perception that the tax system is unfair, and that tax law has ‘loopholes’ that can be exploited, while tax evasion was predicted by the perception that evasion is a trivial crime. Overall, we provide insight into the under-investigated behaviour of ‘creative compliance’ and propose future research directions.

CSR Disclosure by Asia-Pacific Banks: Evidence from Comparative Assessment against India's Compulsory CSR Law

India’s new corporations law (2013) introduced a unique provision mandating CSR spending. This paper evaluates the before and after effects of CSR spending in four major Indian banks from 2005 to 2015. It is compared with four major banks from Japan, Australia, and China. We designed a legal index and analysed the content of CSR disclosures. The research demonstrates that countries with a higher legal index had consistently higher CSR disclosure index scores and actual CSR activity reported in detail. This research also finds that based on company reporting media, there is marginal change in CSR spending in Indian banks and minimal improvement in the reporting quality following change in legislation in 2013. Our findings reveal a small but significant legalisation in the disclosure content following the enactment of section 135. However, poor drafting and poor institutional context revealed by India’s low legal index score shows high levels of auto-interpretation and creative compliance. The section in its current form is failing to promote ethically responsible behaviour and not generating an ethical obligation to obey the law in spirit. These findings are of value to policy makers – to reform the law, to socialise corporations and CEOs, to design enforcement mechanisms, and generate ethical behaviour.

3Rs concerns in regulatory toxicity studies

In mid-July 2013, New Zealand passed the Psychoactive Substances Act (PSA), which allowed ‘low risk’ psychoactive products (‘legal highs’) to be approved for legal sale. In early May 2014, following public protest, the Psychoactive Substances Amendment Act (PSAA) was passed banning animal testing of psychoactive products, potentially making the new regime unworkable.To investigate strategies to overcome the impasse created by the animal testing ban.Solutions to the impasse were investigated using ‘scenario’ and ‘stakeholder’ analysis. Legislation, parliamentary debates, and regulatory statements related to the PSA and animal testing were reviewed. Strategies to resolve the impasse were discussed with stakeholders including the Psychoactive Substances Regulatory Authority (PSRA) officials, health officials, a legal high industry lawyer, and a leading legal highs manufacturer. This process generated six possible scenarios and five decision-making criteria of key importance to major stakeholders. Scenarios were then evaluated based on feedback from the industry and regulators.The six scenarios were: (1) pragmatic modification of the animal testing ban; (2) waiting until new non-animal test models are internationally accepted; (3) use of non-validated replacement test methods; (4) judicial challenge of the animal testing ban; (5) ‘creative compliance’ by only presenting human clinical trial results; and (6) philosophical re-conceptualisation of the ‘benefits’ from psychoactive products. Options 1 and 5 appear to be the most attractive overall solutions. However, both rely on a new political consensus and astute framing of the issues by political communicators. Political decision makers may be happy to accept Scenario 2 which would impose significant delays.A ‘failed’ pharmaceutical product with psychoactive effects may have the test data required to be approved under Scenarios 1 and 5. Ultimately, the pleasurable benefits from psychoactive products may need to be included in the debate.

Designing macroprudential regulation and supervision outside the scope of the banking union: Lessons from the Netherlands and Ireland

In the EU, macroprudential regulation and supervision is partly harmonised with the adoption of the capital requirements package and the creation of the SSM in 2013. However, some macroprudential measures remain the exclusive domain of member states and national supervisors, creating an ideal field for policy learning. This includes maximum loan-to-income (LTI) and loan-to-value (LTV) ratios, which are increasingly adopted in EU member states. This article examines the legal design choices in the Netherlands and Ireland regarding these maximum ratios. It particularly analyses how these choices contribute to preventing creative compliance, ensuring sufficient autonomy of and a balanced degree of discretion for supervisors and minimising unnecessary suppression of borrowing and lending. Both member states have made different choices regarding these three issues. This article draws lessons from these choices for designing macroprudential regulation and supervision in other countries and the EU and identifies possible improvements.

DEFYING THE COMMISSION: CREATIVE COMPLIANCE AND RESPECT FOR THE RULE OF LAW IN THE EU

This article investigates how and to what extent member states comply with EU obligations in terms of process and outcome. The aim is to demonstrate how norm‐conform behaviour unfolds, or fails to unfold, in an interaction between a member state and the European Commission. The empirical focus is on recent rule of law crises in France, Hungary and Romania. The argument is that member states engage in symbolic and/or creative compliance, designed to create the appearance of norm‐conform behaviour without giving up their original objectives. The cases illustrate that creative and symbolic compliance strategies may be successfully employed by member states because they enable the Commission to disengage from conflicts it judges too costly and yet maintain its credibility, and are conditioned by the visibility of failure to change facts on the ground. The implication is that, at times, not only is compliance symbolic, but also to some extent is enforcement.

What products are considered psychoactive under New Zealand's legal market for new psychoactive substances (NPS, 'legal highs')? Implications for law enforcement and penalties.

The problem of defining what psychoactive products and substances should be covered by legislation aimed at controlling new psychoactive substances (NPS; 'legal highs') is central to the current debate on designing new legislative responses to NPS. In New Zealand, implementation of the Psychoactive Substances Act 2013 (PSA) revealed uncertainties about which psychoactive products are covered by the new regime, with important implications for legal penalties. We reviewed five pieces of legislation which can cover substances with psychoactive properties: PSA, Misuse of Drugs Act (MODA), Food Act, Dietary Supplements Regulations and Medicines Act. Our analysis revealed that a number of psychoactive substances which are not MODA-scheduled may potentially fall under more than one regulatory regime, including kava, Salvia divinorum, nitrous oxide, 25I-NBOMe, and 1,3-dimethylbutylamine (DMBA). For example, kava may be classified as a food, a dietary supplement, a herbal remedy, or a psychoactive substance, depending on how it is presented (including advertising and labelling). There are considerable differences in penalties and regulatory requirements between the different legislative regimes and these may result in unnecessary prosecutions or 'gaming' of the system. We discuss a number of ways to more clearly categorize products, including a public schedule of psychoactive substances and products, demarcation criteria based on the quantity of the active ingredient, and demarcation based on 'discernible intoxication'. Routine use of forensic testing is essential to ensure appropriate prosecutions and penalties. Robust safety standards are also required in legislative regimes exempted from psychoactive substances regime to prevent 'creative compliance'. Copyright © 2016 John Wiley & Sons, Ltd.

The challenge of a ban on animal testing for the development of a regulated legal market for new psychoactive substances (NPS) (‘legal highs’) in New Zealand: Issues and options for resolution

BackgroundIn mid-July 2013, New Zealand passed the Psychoactive Substances Act (PSA), which allowed ‘low risk’ psychoactive products (‘legal highs’) to be approved for legal sale. In early May 2014, following public protest, the Psychoactive Substances Amendment Act (PSAA) was passed banning animal testing of psychoactive products, potentially making the new regime unworkable. AimTo investigate strategies to overcome the impasse created by the animal testing ban. MethodsSolutions to the impasse were investigated using ‘scenario’ and ‘stakeholder’ analysis. Legislation, parliamentary debates, and regulatory statements related to the PSA and animal testing were reviewed. Strategies to resolve the impasse were discussed with stakeholders including the Psychoactive Substances Regulatory Authority (PSRA) officials, health officials, a legal high industry lawyer, and a leading legal highs manufacturer. This process generated six possible scenarios and five decision-making criteria of key importance to major stakeholders. Scenarios were then evaluated based on feedback from the industry and regulators. ResultsThe six scenarios were: (1) pragmatic modification of the animal testing ban; (2) waiting until new non-animal test models are internationally accepted; (3) use of non-validated replacement test methods; (4) judicial challenge of the animal testing ban; (5) ‘creative compliance’ by only presenting human clinical trial results; and (6) philosophical re-conceptualisation of the ‘benefits’ from psychoactive products. Options 1 and 5 appear to be the most attractive overall solutions. However, both rely on a new political consensus and astute framing of the issues by political communicators. Political decision makers may be happy to accept Scenario 2 which would impose significant delays. ConclusionsA ‘failed’ pharmaceutical product with psychoactive effects may have the test data required to be approved under Scenarios 1 and 5. Ultimately, the pleasurable benefits from psychoactive products may need to be included in the debate.

The EU bank recovery and resolution directive – Some observations on the financing arrangements

The Bank Recovery and Resolution Directive (BRRD) will require a high degree of consultation, coordination and synchronization within a prolonged period of financial sector stability to be properly implemented. In particular, we celebrate the ex ante risk-based elements of Single Resolution Fund for banks instituted by the BRRD aimed at preventing further government intervention. An aspect that has not been adequately addressed, however, is the management of risk and exposure to losses within these arrangements both in the short and medium terms. As things stand, it appears that the EU might be attempting to play a game of ‘creative compliance’ because of the time required.

Accountability and the Regulation of the Large Law Firm Lawyer

The regulation of solicitors inEngland andWales has undergone great change in the wake of the Legal Services Act 2007. This article considers these regulatory developments through the lens of accountability, focussing on the regulation of transactional lawyers and the large commercial firms. It examines to what extent the Solicitors Regulation Authority's regulatory framework promotes accountability, examining entity regulation, outcomes‐focussed and principles‐based regulation, reporting and disclosure obligations, the Compliance Officer for Legal Practice and the sanctions system. It argues that although transactional lawyers cannot claim the benefit of the ethical principle of non‐accountability, as far as they and their firms are concerned, the regulatory framework is both unnecessary and insufficient. It duplicates the function of accountability to the client and fails to hold transactional lawyers to account for significant regulatory risks that they present, such as the practice of creative compliance.

Tax Advisors and Conflicted Citizens

How should we think about the obligations of a lawyer who counsels and provides legal advice outside of litigation? thousands of lawyers are involved every day in advising clients in this setting. these lawyers counsel companies or individuals on how they can benefit from or avoid violating statutes, regulations, and other sources of law. Legal counsellors do their job behind closed doors. they engage in conversations that are usually protected from disclosure. they move in the shadows, and their influence can be hard to trace. that influence can be profound, however. It can determine who is exposed to what chemicals, who keeps and who loses their jobs, who will be able to count on retirement savings and who won’t. rules of professional responsibility devote remarkably little sustained attention to the role of the advisor. American Bar Association (ABA) Model rule 2.1 is the only rule that explicitly refers to the lawyer as advisor. It simply says that a lawyer ‘shall exercise independent professional judgment and render candid advice’. In doing so, an advisor ‘may’ refer to considerations such as ‘moral, economic, social and political factors’. By contrast, most of the other Model rules are premised on a conception of the lawyer as an advocate. this model is relatively clear and straightforward, and can provide an appealing default template for thinking about the obligations of the advisor. It suggests that the lawyer take a relatively aggressive approach to interpreting the legal provisions applicable to a client in order to maximise the client’s freedom of action. If a client’s behaviour would be permissible according to the literal terms of a statute, for instance, an advocate should urge the client to behave in that way on the ground that assessing the behaviour’s consistency with the purposes of the statute is inappropriate. If the literal terms of the law proscribe behaviour in which the client is engaged, the advisor as advocate may counsel to continue it on the ground that it is in accordance with the law’s purposes. While an advisor who acts as an advocate may adopt either approach, Doreen McBarnet and christopher Whelan argue that advisors who act as advocates in the regulatory context often focus on the literal terms of the law to help the client engage in what they call ‘creative compliance’. this involves structuring transactions, relationships or entities according to

How to Ensure Disclosure of Information in Securities Markets Post-GFC

We are all affected by rising and falling prices in securities markets, whether as citizen, investor, adviser or manager. Stock prices feature in the daily media. Prices move up and down in response to the forces of supply and demand, and free markets sometimes result in booms and busts. Booms and busts usually lead to investigation by government, recommendations for change (‘reform’) and new regulation on top of the existing regulation. As a result, company law is heavy with sections requiring disclosure which have different histories and were passed at different times, often in response to the issues and the politics of the day. This results in piecemeal law-making, and disclosure laws which often overlap, duplicate and confuse. They also present problems of compliance, and provide opportunities for creative legal compliance, avoidance and non-disclosure. This paper commences with an examination of disclosure policy and theoretical considerations relevant to promoting information in securities markets. It examines the philosophy, reasons and purposes of disclosure of financial and non-financial information. It asks whether voluntary disclosure can be relied on to ensure that information will be disclosed to securities markets, or whether disclosure should be mandatory either by legislation or by ‘soft law’ in the rules of self-regulating organizations like stock exchanges. It addresses the problems with mandatory disclosure, including cost and conflict of interest, and concludes with a recommendation for a simple principles-based rule for disclosure of information in securities markets.

Taking a Bus from Immanuel to Mea Shearim: The Role of Israel's High Court of Justice in Regulating Ethnic and Gender Discrimination in the Haredi Ultra Orthodox Sector

What is the role of the judiciary in resolving, or participating in the resolution, of highly contested social and political issues? This question, when applied in the law and religion context, carries special resonance in all modern polities, more so in societies in which religious law is part of the legal system, as in the case of Israel. The paper considers two aspects of judicial involvement in the public sphere: first, the decision in itself, and secondly, post-decision dynamics, that is, the impact of the decision on social and political processes. The analysis of the court’s role is based on two continuums. The first, concerned with judicial readiness to intervene, offers options ranging from interfervention, through shirking and evasion, to refusal, either technical or substantive. The second continuum offers a framework for the analysis of post-decision dynamics, ranging from full compliance, evasion (or “creative compliance”), to defiance. These two analytical frameworks are applied in an analysis of several recent decisions of the HCJ on petitions that challenged practices of Haredi (ultra-orthodox) communities that are considered discriminatory and segregatve in non-Haredi circles. In the 2009 Noar Ke-Halacha case, the applicant, a Haredi of Sephardi (Eastern, North African/Asian) origin, challenged the discrimination of Haredi high school girls in Immanuel, a religious local authority. The HCJ’s order to eliminate all types of discrimination then led to complex dynamics, including the evasion of authorities, the defiance of parents, and in a broader context, the continuance of this practice in other cities. In the Ragen decision, delivered in January 2011, the HCJ shirked from enforcing a straight rule against the practice of separating men and women on public buses. Although the decision was couched with strong criticism, the court approved the government’s adoption of a year’s trial in which the practice would continue voluntarily. In the Azaria affair, filed and removed from the dock in October 2011, the court relied on the respondent’s undertaking to prevent future separation between men and women in the sidewalks of Mea Shearim (an ultra-orthodox neighborhood) during the religious festival of Simchat Tora, despite the breach of an identical undertaking in the previous year. These dynamics, tentatively considered against the recent rise of ultra-orthodox extremism, support an analysis of the role of the court, which is based on a dialogue/conversation model. Under this model, the judiciary is an important, but not supreme, player in an ongoing process of decision-making in the public sphere. Not necessarily the final arbiter, the court operates, inter alia, as a mediator between contesting parties and offers access to weakened groups who have no other direct access to the political process.

Creative compliance in pharmaceutical markets: the case of profit controls

This article discusses the issue of creative compliance in pharmaceutical markets. In particular, we explore the case of profit controls in the UK as an indirect way of regulating prices of in-patent originators. We study creative compliance in the presence of profit controls, rather than price controls or the Pharmaceutical Price Regulation Scheme in general. We use lessons from the accounting literature to explain firm behavior and reveal potential weaknesses in profit control regulation and use data to show changes in trends following the introduction of this policy. We demonstrate that in the presence of profit controls there is an incentive for producers to increase costs (leading to inefficiencies) or to inflate reported costs. We find some evidence that the behavior of pharmaceutical firms in the UK may have changed as a result of the introduction of profit controls. Although the evidence is in line with what we would expect to occur as a result of creative compliance, establishing a concrete causal relationship between such a pricing policy and costs is not possible. As institutions or organizations look to achieve legitimacy for their actions, they will use the tools they have, whether accounting or regulatory, to best represent themselves.