This April the Department of Justice (DOJ) issued updated guidance on the evaluation of corporate compliance programs with the goal of assisting prosecutors in making informed decisions as to whether corporate compliance programs are performing effectively. Understanding this updated guidance is essential for implementing an effective compliance program that conforms with the technical requirements that are guiding prosecutors’ enforcement decisions. To that end, the updated guidance poses three basic questions for the evaluation of a compliance program: Is the program well designed? Is the program being implemented effectively? Does the program work in practice? These basic elements have long been considered by the department and the courts. For example, the Justice Manual states that the adequacy and effectiveness of the corporation’s compliance program is one of the factors to be considered in making a charging decision, and it may be one of the most significant influencers to avoid punitive decisions. And the U.S. Sentencing Guidelines Section 8C2.5(f) provides that an effective compliance program significantly reduces a corporate entity’s culpability score, potentially reducing a fine by millions of dollars. How does this updated guidance alter the landscape, and what should a corporation focus on to ensure that its compliance program is deemed effective?

The department guidance answers these questions and provides a template for compliance.

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