Department of Justice Issues Principles of an Effective Compliance Program

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February 23, 2017

The Department of Justice issued a directive entitled “Evaluation of Corporate Compliance Programs.”  The document provides insight into the analysis used by the DOJ to assess the effectiveness of a corporate compliance program when making sentencing recommendations under the United States Sentencing Guidelines.

The document references the Principles of Federal Prosecution of Business Organizations included in the United States Attorney’s Manual.  The Principles describe specific factors prosecutors are required to consider when conducting investigations, making charging decisions, and negotiating potential plea agreements.  The factors considered by prosecutors have become known as the “Filip Factors.” Primary factors identified in the Filip Factors include “the existence and effectiveness of the corporation’s pre-existing compliance program” and the extent of the organization’s efforts “to implement an effective corporate compliance program or to improve an existing one.”

The DOJ states that it evaluates compliance efforts on an individual basis in the context of the investigation that triggers the investigation.   A rigid formula is not used to assess compliance efforts.   Instead, the DOJ considers the specific risk profile of the company being investigated and whether the company effectively takes actions to mitigate the specific risk that applies to its operations. 

Although individualized determinations of compliance program effectiveness are made by prosecutors, certain common questions are relevant to the determination of compliance effectiveness.  The outline provided by the DOJ identifies some common issues, topics, and questions it uses to assess compliance program effectiveness.

We will be posting follow-up blog articles summarizing some of the factors identified by the DOJ as indicating compliance program effectiveness.  Stay tuned!

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