Alerts and Updates

DOJ Criminal Division Issues Comprehensive Guidance on Corporate Compliance Programs

May 17, 2019

With this new guidance, the Criminal Division is sending a clear signal that an effective compliance program can go a long way toward favorable treatment by the government in a corporate criminal investigation.

On April 30, 2019, the Criminal Division of the U.S. Department of Justice (DOJ) issued comprehensive guidance on how prosecutors should evaluate corporate compliance programs. In a speech announcing the new guidance, Assistant Attorney General for the Criminal Division Brian A. Benczkowski expressed the division’s desire “to provide additional transparency” to companies in designing and implementing compliance programs.

The New Guidance

The DOJ’s Criminal Division handles cases involving, among other areas, the Foreign Corrupt Practices Act, securities and financial fraud, asset forfeiture and money laundering. Benczkowski emphasized that a “company’s compliance program can play a significant role in the [Criminal Division’s] investigation of criminal wrongdoing” and outlined three fundamental questions that a prosecutor should ask in evaluating a corporation’s compliance program:

  1. Is the corporation’s compliance program well-designed?
  2. Is the corporation’s compliance program being implemented effectively?
  3. Does the corporation’s compliance program work in practice?

The guidance document sets forth detailed requirements in these three areas for prosecutors to use when evaluating the extent to which a company should be given credit for such programs in making their prosecutorial decisions. But Benczkowski stressed that “the topics and questions are neither a checklist nor a formula,” and that the Criminal Division “does not use any rigid formula to assess the effectiveness of corporate compliance programs.” With this guidance, the Criminal Division is aiming to provide “additional insight” to both prosecutors and companies on the division’s evaluation of compliance programs.

The Importance of Corporate Compliance Programs

In his speech, Benczkowski stated, “The importance of corporate compliance cannot be overstated,” in part because “a company’s compliance program is the first line of defense that prevents the misconduct from happening in the first place.” Importantly for companies, if a compliance program is done right, “it has the ability to keep the company off [the division’s] radar screen entirely.” As Benczkowski also explained, an effective compliance program is much more likely to detect misconduct at an early stage, which increases the chances of a favorable outcome for the company.

The new guidance is the latest example of the DOJ’s push to encourage self-reporting, full cooperation and remediation by companies in corporate criminal investigations. With this new guidance, the Criminal Division is sending a clear signal that an effective compliance program can go a long way toward favorable treatment by the government in a corporate criminal investigation.

An Ounce of Prevention

As the saying goes, an ounce of prevention is worth a pound of cure. Companies should examine their corporate compliance programs to ensure that they meet the criteria outlined in the guidance document.

About Duane Morris

Duane Morris’ White-Collar Crime attorneys design corporate compliance programs that provide clients with protection against corporate misconduct, and, if misconduct occurs, mitigates the adverse consequences to the company of a corporate criminal prosecution.

For Further Information

If you have any questions about this Alert, please contact Christopher H. Casey, Forrest Hansen, Jovalin Dedaj, Eric R. Breslin, George D. Niespolo, any of the attorneys in our White-Collar Criminal Defense, Corporate Investigations and Regulatory Compliance Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.