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THE DEPARTMENT OF JUSTICE IN APRIL 2019 UPDATED GUIDANCE FOR EVALUATING CORPORATE COMPLIANCE PROGRAMS. HOW DOES YOUR ORGANIZATION RESPOND TO THE THREE FUNDAMENTAL COMPLIANCE QUESTIONS?

The "Principles of Federal Prosecution of Business Organizations" in the U.S. Department of Justice (DOJ) Justice Manual describe specific factors that prosecutors should consider in conducting an investigation of a corporation, determining whether to bring charges, and negotiating plea or other agreements. Additionally, the United States Sentencing Guidelines advise that consideration be given to whether the corporation had in place at the time of the misconduct an effective compliance program for purposes of calculating the appropriate organizational criminal fine. Moreover, a memorandum entitled "Selection of Monitors in Criminal Division Matters" instructs prosecutors to consider, at the time of the resolution--

  • "whether the corporation has made significant investments in, and improvements to, its corporate compliance program and internal controls systems" and
  • "whether remedial improvements to the compliance program and internal controls have been tested to demonstrate that they would prevent or detect similar misconduct in the future" to determine whether a monitor is appropriate.

In April 2019 the DOJ issued an update to its guidance document related to the evaluation of corporate compliance programs. This document is meant to assist prosecutors in making informed decisions as to whether, and to what extent, the corporation's compliance program was effective at the time of the offense, and is effective at the time of a charging decision or resolution, for purposes of determining the appropriate (1) form of any resolution or prosecution; (2) monetary penalty, if any; and (3) compliance obligations contained in any corporate criminal resolution (e.g., monitorship or reporting obligations).

The document reiterates that a corporate compliance program must be evaluated in the specific context of a criminal investigation. There are, however, three "fundamental questions" a prosecutor should ask:

  1. "Is the corporation's compliance program well designed?"
  2. "Is the program being applied earnestly and in good faith?" In other words, is the program being implemented effectively?
  3. "Does the corporation's compliance program work in practice?"

The DOJ Guidance may be read in full at https://www.justice.gov/criminal-fraud/page/file/937501/download.

Trusiak Law can assist you in measuring the effectiveness of your corporate compliance program. It will be done under attorney client privilege to protect you.

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