Earlier this month, the U.S. Justice Department released an updated version of a document outlining how its Fraud Division assesses compliance programs developed by companies to prevent their employees from breaking the law.
First published in 2017, the “Evaluation of Corporate Compliance Programs” guidance document has been updated several times since, and the latest version, though adding a greater degree of transparency, does not vary substantially from earlier ones.
The effectiveness of a company’s compliance program is one of the factors prosecutors consider when deciding how to resolve corporate criminal investigations.
The guidelines, though not prescriptive, offer a glimpse at the questions prosecutors could ask companies accused of wrongdoing. With respect to compliance, three that are considered to be “fundamental” are as follows:
- “Is the corporation’s compliance program well designed?“
- “Is the program being applied earnestly and in good faith?“ In other words, is the program being implemented effectively?
- “Does the corporation’s compliance program work“ in practice?
The document then expands at length to address each of these questions with detailed information explaining how they should preferably be answered.
Why It Matters
Aside from providing more clarity about the government’s approach to evaluating the strength of compliance programs, the document’s informal set of standards can be readily adapted for use by companies in the development of their own compliance initiatives.
As well, the detailed guidance provided in answer to the DOJ’s “fundamental questions” could help corporate executives responsible for this particular aspect of operations to better advocate internally for their budgets and priorities.
While designing or refining customs and trade compliance programs is likely not foremost among the priorities facing businesses at the moment given the present economic crisis, the information nevertheless provides an invaluable blueprint for them to follow when addressing this important issue in the future.
Need More Information
If you have any questions about designing an effective customs compliance program or require assistance in implementing one, we can help. Don’t hesitate to contact one of our knowledgeable trade experts to discuss your needs.