The US Department of Justice’s (DOJ’s) Criminal Division published an update on June 1 to its Evaluation of Corporate Compliance Programs guidance, which is used by its prosecutors to assess the adequacy and effectiveness of corporate compliance programs in corporate criminal resolutions. The updated guidance retains nearly all of the language and questions contained in the previous guidance released in April 2019, but the new update provides clarifications and refinements in key areas, including with regard to access to compliance-related data.
As before, the updated guidance continues to focus on a program’s effectiveness, and the recent updates provide insights and useful clarifications that can aid legal and compliance departments. Read a redline comparison of the updated guidance.
Importantly, the updated guidance changes the inquiry on one of the three fundamental prosecutorial questions (“Is the program being applied earnestly and in good faith?”). Previously, the guidance directed prosecutors to look into whether a corporation’s compliance program was ‘being implemented effectively.’ The updated guidance provides more concrete information about what is at issue, requiring prosecutors to inquire into whether the program is being “adequately resourced and empowered to function effectively?”
In addition, the newest guidance makes the following notable updates:
It is yet to be determined how this new guidance will be implemented, however, the DOJ’s clarification and expansion on specific topics provides useful insight into which corporate compliance programs the DOJ will deem effective. Although the updated guidance is not prescriptive, it does signal that companies and their internal legal and compliance departments should create dynamic and adaptable programs that are appropriately resourced, empowered to be effective and responsive to misconduct, and ever evolving to address dynamic risks.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Sheila A. Armstrong