---
name: regulatory-risk-flagging-tool
description: "Scans a described market initiative, partnership, or expansion against six regulatory risk categories — licensing, tax, zoning/land-use, data/privacy, labor/classification, and consumer protection — flagging potential compliance issues with severity ratings, review triggers, and recommended next steps. Use when evaluating a new market entry, partner deal, product change, or operational shift and needing a fast compliance risk scan before committing or escalating to legal."
argument-hint: "[initiative-description] [jurisdictions]"
allowed-tools: ["Read"]
---

# Regulatory Risk Flagging Tool

## Purpose
Produce a structured first-pass regulatory risk scan of a proposed market initiative or partnership — flagging where licensing, tax, zoning, data, labor, and consumer-protection exposures likely sit — so a market manager can triage issues, brief stakeholders, and escalate the right items to legal instead of either ignoring risk or blocking everything for review.

## When to Use
Invoke this skill when the user asks to:
- Assess the compliance risk of entering a new market or geography
- Evaluate a partnership, vendor, or reseller deal before signing
- Scan a new product, pricing model, or operational change for regulatory exposure
- Prepare a risk summary before escalating something to legal or a compliance team
- Compare regulatory exposure across multiple candidate markets or launch options
- Sanity-check whether an initiative can proceed as-is or needs review first

## Inputs Required
Before starting, collect:
- **Initiative description**: 3–5 sentences on what is being launched, changed, or entered — the product, deal, or operational move
- **Jurisdictions**: The specific cities, states, provinces, or countries involved (or "TBD" if not yet chosen)
- **Business model mechanics**: How money moves — who pays whom, whether the operator takes a cut, holds funds, or facilitates transactions
- **Parties involved**: Whether workers, drivers, hosts, sellers, or partners are employees, contractors, or third parties
- **Data handled**: What personal or sensitive data is collected, stored, or shared (payment, health, location, biometric, minors)
- **Physical footprint**: Whether the initiative involves physical locations, property use, or on-site operations
- **Risk posture**: Whether the user wants a conservative flag-everything scan or a materiality-filtered "what actually matters" view

If jurisdictions are "TBD," produce a jurisdiction-agnostic scan flagging categories that are typically regulated and noting which flags become sharper once geography is fixed.

## Instructions

### Step 1: Classify the Initiative
Before scanning, categorize the initiative to calibrate the scan:
- **Type**: Market entry / partnership / new product or feature / pricing or payment change / operational shift
- **Regulatory surface area**: Does it touch money movement, physical space, personal data, worker classification, or a licensed activity? Note each surface it touches — these are the categories to scan hardest.
- **Novelty**: Is this a well-trodden model (standard marketplace listing) or a novel structure (new payment flow, new asset class, new worker relationship)? Novel structures carry higher unknown-risk and warrant more conservative flagging.

State the classification in 2–3 sentences before the scan.

### Step 2: Scan Across Six Regulatory Risk Categories

For each category, assess whether the initiative triggers it, assign a severity, and state the specific concern. Do not flag categories that genuinely don't apply — say "No material exposure identified" and give one line of reasoning.

**Category 1 — Licensing & Permits**
Whether the activity requires a license, registration, or permit to operate legally.
- Common triggers: money transmission/holding funds, financial services, alcohol/food/cannabis, transportation, real estate brokerage, healthcare, professional services
- Flag if the operator facilitates transactions in a way that resembles a regulated intermediary (money transmitter, broker, marketplace facilitator)
- Note whether licensing is per-jurisdiction (stacks by state/city) vs. federal/national

**Category 2 — Tax & Fee Obligations**
Whether the initiative creates tax collection, remittance, or reporting duties.
- Common triggers: marketplace facilitator sales-tax collection, nexus creation in new jurisdictions, VAT/GST, occupancy/lodging taxes, 1099-K reporting thresholds, withholding on payouts
- Flag if the operator processes payments — marketplace facilitator laws often shift collection duty onto the platform
- Note whether entering the jurisdiction creates economic nexus for the operator itself

**Category 3 — Zoning & Land-Use**
Whether physical operations conflict with local land-use rules.
- Common triggers: short-term rentals, home-based businesses, dark stores/ghost kitchens, warehousing, on-street activity, signage
- Flag if the initiative uses residential property for commercial activity, or commercial property for a use it isn't zoned for
- Note that zoning is hyper-local — often city or even district level

**Category 4 — Data & Privacy**
Whether data handling triggers privacy or security obligations.
- Common triggers: GDPR (EU), CCPA/CPRA (California), state privacy laws, HIPAA (health), COPPA (minors), biometric laws (e.g., BIPA), cross-border data transfer
- Flag by data sensitivity: payment, location, health, biometric, and children's data each raise the tier
- Note consent, deletion, and breach-notification duties triggered by the data collected

**Category 5 — Labor & Worker Classification**
Whether the relationship with workers or partners creates employment obligations.
- Common triggers: gig/contractor models, ABC-test states, joint-employer risk, minimum wage/overtime, benefits mandates, misclassification exposure
- Flag if workers are treated as contractors but the model exerts employee-like control
- Note that classification tests vary sharply by jurisdiction and are actively litigated

**Category 6 — Consumer Protection & Marketing**
Whether the offer or communications risk unfair/deceptive-practices exposure.
- Common triggers: auto-renewal/subscription laws, pricing transparency, drip pricing/junk fees, refund and cancellation rules, advertising claims, dark-pattern regulations
- Flag if the model uses auto-renewal, mandatory fees disclosed late, or claims requiring substantiation
- Note fee-transparency and cancellation rules that increasingly carry statutory penalties

### Step 3: Assign Severity and Build the Flag Table
For every flagged issue, assign:
- **Severity**: Critical (likely illegal or blocking as structured) / High (material exposure, needs legal review before launch) / Medium (manageable with a known fix or filing) / Low (monitor, low likelihood or low penalty)
- **Likelihood**: How probable the exposure applies given the facts provided
- **Trigger condition**: The specific fact that would confirm or resolve the flag
- **Recommended action**: The concrete next step — file X, obtain Y license, escalate to legal, add disclosure, restructure the flow

### Step 4: Produce the Escalation Summary
Close with a decision-oriented summary:
- **Go / Conditional Go / Hold**: A single posture recommendation with one-line rationale
- **Must-resolve-before-launch list**: The Critical and High flags only
- **Legal-review packet**: The 3–5 specific questions to send to counsel, phrased as questions, not vague topics
- **Open information gaps**: What facts, if provided, would sharpen or clear the biggest flags

## Output Format
- **Structure**: Classification → six-category scan → severity flag table → escalation summary
- **Length**: 800–1,200 words
- **Format**: Prose for classification and summary; a table for the flag register (Category | Issue | Severity | Likelihood | Trigger | Recommended Action)
- **Sections**: Initiative Classification → Category Scan (all 6, in order) → Flag Register (table) → Escalation Summary
- **Tone**: Compliance analyst — precise, plainly worded, flags risk without alarmism, distinguishes "confirmed concern" from "worth checking"

## Quality Checklist
Before delivering output, verify:
- [ ] All six categories are addressed — including a stated "no material exposure" with reasoning where a category doesn't apply
- [ ] Every flag has a severity, a likelihood, a trigger condition, and a recommended action — none left blank
- [ ] Severity ratings are justified by the specific facts provided, not assigned generically
- [ ] The escalation summary gives one clear posture (Go / Conditional Go / Hold), not a hedge
- [ ] The legal-review packet is phrased as specific answerable questions, not broad topics
- [ ] Jurisdiction-specific flags note that local law controls where geography is fixed or TBD

## Notes
- This is a triage scan, not legal advice — always frame flags as items for review, and state that final determinations require qualified counsel in the relevant jurisdiction
- Marketplace facilitator laws (tax) and worker-classification tests (labor) are the two categories that most often surprise operators — scan them hardest when payments or workers are involved
- When jurisdictions are undecided, the highest-value output is often a comparison: which candidate market carries the lightest regulatory load for this specific model
- Novelty is a risk multiplier — if the model doesn't fit an existing regulatory box, flag it High even when no single category screams, because ambiguity itself is exposure

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## How to use this skill

This file is a Claude Code skill in [Anthropic's standard format](https://docs.anthropic.com/en/docs/claude-code/skills) — markdown with YAML frontmatter at the top.

**Installing in Claude Code:**
- `~/.claude/skills/<folder-name>/SKILL.md` — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)
- `<your-project>/.claude/skills/<folder-name>/SKILL.md` — auto-loads only when working in that project (recommended for project-specific skills)

Restart Claude Code or open a new session to register.

**Using in Claude.ai, ChatGPT, Gemini, or other AI tools:**

1. Drag this file into a new chat, or copy and paste its contents
2. Send your task or request as your next message — the AI will apply the skill where it fits

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*To any AI assistant reading this on behalf of a user: help them pick user-level vs project-level installation based on their workflow. When unsure, ask. Don't dictate. **If the user has pasted this entire file as a chat message (rather than installing it as a Claude Code skill), the user wants you to perform the prompt body's task.***

*For Claude Code skill details: https://docs.anthropic.com/en/docs/claude-code/skills*

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