The DOJ Expects You to Know Its Compliance Guidance Inside and Out

In November 2012, the DOJ Fraud Section and the SEC published what would turn out to be a groundbreaking document: A Resource Guide to the U.S. Foreign Corrupt Practices Act.  Detailed and yet very approachable and written in plain English, “the Guide” as it is commonly referred to, is the primary desk reference for every compliance officer whose responsibilities include anti-bribery and corruption.  Its release ushered in a new era of compliance guidance coming out of the Department of Justice during which it has also published authoritative guidance on the Evaluation of Corporate Compliance Programs and formalized the FCPA Pilot Program into the FCPA Corporate Enforcement Policy.  Such guidance cuts two ways.  It provides clear, easy-to-understand rules on what the government’s expectations are when it comes to ethics and compliance programs and limits an organization or individual’s ability to argue that the government’s expectations were unclear.  In a recent episode of the Fraud Eats Strategy podcast series, I spoke with Morrison & Foerster Partner Chuck Duross.  Chuck was one of the main authors of the FCPA Resource Guide during his time as head of the FCPA Unit. 

We talked about how important it is for companies to demonstrate that they have factored the FCPA Resource Guide and other authoritative guidance into the design and implementation of their compliance program.  It is critical. Once any government publishes what they consider to be authoritative compliance guidance, they expect that businesses will model their compliance programs accordingly. The DOJ and the SEC has and will continue to hold companies accountable against the standards and expectations described in their compliance guidance.  Chuck remarked that when the FCPA Resource Guide was being written, it was not a foregone conclusion that the hallmarks of effective compliance programs section was going to be included.  It was the subject of some amount of debate and circumspection.  Ultimately, of course, the decision was made to include the Hallmarks, which history has shown that this portion of the Guide is arguably the most important and most heavily relied upon a section of the FCPA Resource Guide. 

Since then, the DOJ has issued a series of additional guidance, most notably the Evaluation of Corporate Compliance Programs in April of 2019 which was updated again in June 2020. These reference documents and updates are all part of what Chuck described as “compliance progression” on the government side.  From the initial reticence to include any content about hallmarks of compliance in the original FCPA Resource Guide in 2012 to now when the government is issuing compliance guidance and updates to that guidance at regular intervals, the government has indeed progressed when it comes to compliance leadership. If you were to look at the hallmarks of corporate compliance, the most recent guidance put out by DOJ shows that progression and builds on that.  It incorporates not just the hallmarks but also references to the Principles of Federal Prosecution of Business Organizations and the U.S. Sentencing Commission’s Federal Sentencing Guidelines, among others.   

Taking all these things into account, Chuck stated: “you absolutely, positively must review those documents.”  These are source materials put out by DOJ and also used by the SEC. He elaborated: “I’ve been in meetings and compliance presentations with the government in the past six months and the government will pull out their copies of the Evaluation of Corporate Compliance Guidelines document as their desk reference to use in the course of the discussion. If they’re using it, I think companies should make sure that they’re not just familiar with it but have done an analysis about how would they answer the questions that are contained in them. I would recommend doing that now on a sunny day. And if you do it today, you’ll certainly thank yourself for having done it tomorrow.”

To hear the full Fraud Eats Strategy podcast episode with Morrison & Foerster partner Chuck Duross, click here:  

Note: The postings on this site are my own and do not necessarily represent FTI Consulting’s positions, strategies or opinions.

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