Department of Justice Updates Its Corporate Compliance Program Evaluation Guidance

On June 1, 2020, the U.S. Department of Justice (“DOJ”) published an updated version of its guidance on how it evaluates corporate compliance programs when making charging decisions. The DOJ guidance, first published in 2017 and updated since then, should be one of the foundational documents for building and testing a company’s compliance program. In releasing the new guidance, the head of the DOJ’s Criminal Division noted that the revised version “reflects additions based on our own experience and important feedback from the business and compliance communities.”

The most significant revisions to the guidance concern DOJ’s greater understanding of individual company circumstances and its recognition that its evaluation of a company’s corporate compliance program must be a “reasonable, individualized determination in each case.” There is new language in the guidance acknowledging that various factors (such as the company’s size, industry, geography, regulatory landscape) might impact a compliance program, and the new guidance encourages prosecutors to understand why the company has chosen to set up the compliance program the way it has.

Alongside the renewed stress on the need for a more finely honed risk based approach, DOJ is also emphasizing the need for companies to pay more attention to the benefits of data collection and analytics around compliance risks. In our view, this nicely overlaps with the business rationale to be more efficient in the use of scarce compliance resources, particularly when companies are forced to reduce staffing in legal and compliance functions in challenging economic times. A data-driven compliance process also enables early warning indicators around supply chain, payment, and risks around high-risk customers or vendors who may also implicate issues involving OFAC and export controls.

In addition to its heightened emphasis on the individual company circumstances, the new guidance also clarifies that, rather than evaluating whether the program is “implemented effectively,” DOJ will assess whether the program is “adequately resourced and empowered to function effectively.” Other changes to the guidance confirm that DOJ’s evaluation of corporate compliance programs is not limited to a “snapshot” in time, but rather DOJ will assess a compliance program’s ability to engage in periodic reviews of its controls.

The updated guidance is available here: https://www.justice.gov/criminal-fraud/page/file/937501/download.

Should you have any questions or concerns, please do not hesitate to contact Ice Miller’s White Collar Defense & Investigations Group for assistance.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.