DOJ Revises Guidance on Corporate Compliance Programs

Corporate Compliance Insights

Melissa L. Jampol and Jeffrey Mongiello, attorneys in the Litigation & Business Disputes and Health Care & Life Sciences practices, and Machelle D. Shields, Strategic Advisor for EBG Advisors, Inc., co-authored an article in Corporate Compliance Insights, titled “DOJ Revises Guidance on Corporate Compliance Programs.”

Following is an excerpt:

Companies need to be aware of updated guidelines issued by the U.S. Department of Justice (DOJ) Criminal Division governing how the agency will evaluate corporate compliance programs. Released on June 1, 2020, the “Evaluation of Corporate Compliance Programs” (“2020 Revisions”) aids prosecutors in assessing the adequacy and effectiveness of compliance programs when deliberating whether to prosecute or resolve a matter, whether to seek monetary penalties and/or whether to impose corporate monitoring or reporting obligations.

The DOJ has set forth that “in assessing whether a company’s compliance program was effective at the time of the misconduct, prosecutors should consider whether and how the misconduct was detected, what investigation resources were in place to investigate suspected misconduct and the nature and thoroughness of the company’s remedial efforts.” The 2020 Revisions set forth 20 pages of guidance and highlight the substantial benefits for corporations to be proactive about compliance.

Relying on the DOJ’s Justice Manual and its “Principals of Federal Prosecution of Business Organizations,” the 2020 Revisions continue to rely upon three “fundamental questions” for prosecutors to consider when evaluating corporate compliance programs:

  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 adequately resourced and empowered to function effectively?
  3. Does the corporation’s compliance program work in practice?