United States: DOJ Criminal Division Issues Comprehensive Guidance On Corporate Compliance Programs

Last Updated: May 31 2019
Article by Christopher H. Casey, Forrest Hansen and Jovalin Dedaj

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

The Policy was published by the DOJ's Criminal Division, which is responsible for cases involving the Foreign Corrupt Practices Act, securities and financial fraud, asset forfeiture, and anti-money laundering. It is expected that this Policy will be implemented by the DOJ Criminal Division and U.S. Attorney's Offices.

Benczkowski emphasized that a "company's compliance program can play a significant role in the [DOJ's] investigation of criminal wrongdoing" and outlined the 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?; and

(3) Does the corporation's compliance program work in practice?

With this Policy the DOJ hopes to provide "additional insight" under the framework of these three questions.

(1) Is the Corporation's Compliance Program Well-Designed?

A compliance program should be comprehensive and well-integrated into a company's operations and workforce. Prosecutors are instructed to consider the following factors in evaluating this question:

Risk Assessment

A compliance program should be specifically tailored to the company's risk profile. Prosecutors should consider whether the program is appropriately "designed to detect the particular types of misconduct most likely to occur in a particular corporation's line of business and complex regulatory environment". Relevant factors to consider include the location of operations, the industry sector, the competitiveness of the market, the regulatory landscape, potential clients and business partners, transactions with foreign governments, payments to foreign officials, use of third parties, gifts, travel, and entertainment expenses, and charitable and political donations.

Policies and Procedures

The Policy reiterates the need for a code of conduct that sets forth the company's commitment to full compliance that is accessible and applicable to all company employees. The Policy directs prosecutors to look at the design of the company's process for implementing new policies and procedures, the comprehensiveness of those policies and procedures, their accessibility, and those responsible for integrating them in the company's operations.

Training and Communications

The Policy also explains that a compliance program is not effective if it is not being disseminated to, and understood by, employees in practice. Prosecutors are directed to determine whether instances of misconduct are communicated to employees, the availability of guidance on compliance, and the effectiveness of risk-based training.

Confidential Reporting Structure and Investigation Process

Confidential reporting is an important factor to consider because, as the Policy directs, a well-designed compliance program is one that includes pro-active measures to create a workplace atmosphere without fear of retaliation. A company should consider setting up mechanisms for confidential reporting that allow for anonymity, such as an internal hotline number, and establishing a team of dedicated and qualified personnel that can timely and efficiently evaluate complaints.

Third Party Management

Prosecutors are asked to evaluate whether a company has the appropriate controls to monitor and manage third-party relationships, and whether that process is risk-based to account for the nature and level of the enterprise risk identified by the company. A company should assess how it incentivizes compliance from its third-party partners and how it handles instances of misconduct with those partners.

Mergers and Acquisitions

When looking at any acquisition target, a company should conduct pre-M&A due diligence to evaluate more accurately each target's value and negotiate for the costs of any corruption or misconduct identified. Failing to do so could permit the misconduct to continue at the target company.

(2) Is the Corporation's Compliance Program Being Implemented Effectively?

The Policy instructs prosecutors to "probe specifically whether a compliance program is a 'paper program' or one 'implemented, reviewed, and revised as appropriate in an effective matter.'"

Commitment by Senior and Middle Management

Prosecutors are told to consider whether the company's senior leaders encourage compliance, what actions they have taken to demonstrate leadership themselves in the company's compliance, and whether there is sufficient oversight by senior leaders. The Policy further directs prosecutors to assess whether the company's senior leaders and middle-management coordinate their efforts to ensure a culture of compliance.

Autonomy and Resources

Prosecutors are instructed to analyze a compliance program for its structure ("Where within the company is the compliance function housed?"), its stature within the company ("How does the compliance function compare with other strategic functions in the company...?"), its funding and resources, its autonomy, and how much of the compliance function is outsourced to an external firm or consultant.

Incentives and Disciplinary Measures

The Policy instructs prosecutors to evaluate a compliance program's process ("Who participates in making disciplinary actions?"), its application ("Have disciplinary actions and incentives been fairly and consistently applied across the organization"), and the incentives ("How does the company incentivize compliance and ethical behavior?"). The Policy references some effective "stick and carrot" methods such as internally publicizing disciplinary actions, providing positive incentives – personnel promotions, rewards, and bonuses – and making compliance a significant metric for management bonuses and career advancement.

(3) Does the Corporation's Compliance Program Work in Practice?

The DOJ recognizes that no compliance program can ever prevent all criminal activity by a corporation's employees. Instead, this inquiry focuses on whether the program has evolved over time to address existing and changing compliance risks and whether the company made a good faith effort to understand both what contributed to the misconduct and the steps necessary to prevent similar misconduct in the future.

Continuous Improvement, Periodic Testing, and Review

According to the Policy, a company should reassess, among other things: (1) the process for determining where and how frequently to undertake an internal audit; (2) the efficacy of the company's control testing and how those results are reported and remedial action items tracked; (3) the frequency with which the company updates its compliance policies, procedures, and practices; and (4) the overall culture of compliance.

Investigation of Misconduct

Prosecutors are advised to look for whether a company has established a means of documenting responses to misconduct, including any disciplinary or remediation measures taken. The Policy considers a "well-functioning and appropriately funded mechanism for the timely and thorough investigations" of misconduct to be a "hallmark" of an effective compliance program.

Analysis and Remediation of Any Underlying Misconduct

Following the discovery of any misconduct, a company should ask whether any remedial actions taken were effective in addressing the cause of the misconduct. The Policy explains that a compliance program is working in practice if it is "able to conduct a thoughtful root cause analysis of misconduct and timely and appropriately remediate" those root causes.

In conclusion, we recommend that a company carefully consider the new framework provided by the DOJ under the three questions above. The Policy is clear that the DOJ is serious about compliance programs and that compliance programs should play an important role in the DOJ's investigations.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions