Statutory vs. Regulatory Requirements

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What is the difference between Statutory Requirements and Regulatory Requirements?

The term "statutory and regulatory requirements" appear in ISO 9001:2015 for 12 times. These two requirements together are also called as the legal requirements.

However, the question here is: "What is the difference between statutory and regulatory requirements?".

The difference between statutory and regulatory requirements is a subtle one. In general, a statutory requirement is an established rule by law, like copyright, trademark protections, Sarbanes-Oxley Act (SOX). A regulatory requirement is established by government agencies.

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The following will help you discern between the two:

Statutory

  • What It Is: Statutory refers to rules or laws that have been enacted by a legislative body like the U.S. Congress, a state legislature, or another governmental entity with the authority to pass laws.
  • Source: These laws are usually written, debated, and passed by elected representatives.
  • Compliance: Non-compliance with statutory laws can result in a range of penalties, including fines, lawsuits, and even imprisonment depending on the severity of the infraction.

Example: A corporation is legally required to pay corporate taxes to the federal government. This requirement is statutory, as it is based on laws passed by Congress.


Regulatory

  • What It Is: Regulatory refers to rules or guidelines put forth by governmental agencies. These agencies have been given the authority to create regulations within the framework of the statutory laws.
  • Source: Regulations are not created by elected officials but by experts in the relevant field who work within a governmental agency.
  • Compliance: Non-compliance can also lead to fines, lawsuits, or other penalties, similar to statutory requirements.

Example: The U.S. Food and Drug Administration (FDA) sets regulations for the labeling of food products. These regulations dictate what kind of information must be available to consumers on food packaging. While the FDA's authority to do this is based on statutory laws, the specific requirements are regulatory.


Why Do We Have to Comply?

  1. Legal Requirement: Both statutory laws and regulations carry the weight of law, so failing to comply can result in legal action.
  2. Public Safety and Trust: Many of these rules and guidelines are put in place to protect the general public or to ensure fair commerce, so compliance helps maintain public safety and trust.
  3. Business Continuity: Non-compliance can not only result in financial penalties but can also cause businesses to lose licenses, face public backlash, or even be forced to shut down operations.


Differences

  • Source of Authority: Statutory laws are created by elected legislative bodies, while regulatory laws are created by governmental agencies.
  • Scope: Statutory laws often provide the broader framework, while regulations provide detailed rules within that framework.
  • Creation Process: Statutory laws usually involve more public input, including open sessions of legislative bodies and opportunities for public comment, while regulations may be created with less direct public input, often by experts in the relevant field.


Statutory vs Regulatory

Attribute Statutory Regulatory
What It Is Laws enacted by a legislative body Rules or guidelines by governmental agencies
Source Elected representatives in a legislative body Governmental agencies or bodies
Compliance Penalty Fines, lawsuits, imprisonment Fines, lawsuits, other penalties
Example Corporate tax laws FDA food labeling regulations
Why Comply Legal requirement, public safety, business continuity Legal requirement, public safety, business continuity
Scope Broader framework Detailed rules within that framework
Creation Process More public input, debated and passed by elected officials Less direct public input, often created by experts in the field





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