On April 30, 2019, the U.S. Department of Justice (DOJ) Criminal Division released updated guidance for prosecutors to use when evaluating the effectiveness of corporate compliance programs. The guidance sets forth topics that the Criminal Division has frequently found relevant in evaluating corporate compliance programs. The guidance centers around three main questions prosecutors are to ask when evaluating compliance programs:
- Is the corporation’s compliance program well designed?
- Is the program being implemented effectively?
- Does the program actually work in practice?
The document is meant to assist prosecutors in making informed decisions as to whether, and to what extent, a corporation’s compliance program was effective at the time of any offense, and is effective at the time of a charging decision or resolution. A prosecutor’s evaluation of a corporation’s compliance program can assist in determining the appropriate form of resolution or prosecution, monetary penalty, if any, and compliance obligations contained in any corporate criminal resolution.
The “Principles of Federal Prosecution of Business Organizations” in the DOJ’s Justice Manual describes specific factors that prosecutors should consider when conducting an investigation of a corporation, determining whether to bring charges, or negotiating plea or other agreements.1 These factors include “the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of a charging decision” and the corporation’s remedial efforts “to implement an adequate and effective corporate compliance program or to improve an existing one.”2
On April 30, 2019, the U.S. DOJ Criminal Division issued additional guidance for prosecutors to use when evaluating the effectiveness of a corporation’s corporate compliance program. The new guidance updates a prior version issued by the DOJ’s Fraud Section in February 2017.
While the Criminal Division acknowledges that each corporate compliance program must be evaluated in the specific context of a criminal investigation, it outlines three common questions that prosecutors may ask in the course of making an individualized determination: (1) is the corporation’s compliance program well designed?; (2) is the program being applied earnestly and in good faith?; and (3) does the corporation’s compliance program work in practice? The guidance then outlines sample topics and questions under each common question.3