Tag: New Corporate Enforcement Policy

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FCPA Compliance Report

James Koukios on Changes to Corporate Enforcement Policy

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this special episode, I am joined by Morrison and Foerster partner James Koukios to discuss the recent Kenneth Polite speech announcing changes to the Department of Justice Corporate Enforcement Policy.

In this episode, we consider the following:

  • What is the CEP;
  • This is a follow on from the Monaco Memo;
  • Why this change is significant for recidivists;
  • How this change redefines an effective compliance program;
  • The new CEP offers real, tangible, and significant benefits for compliance programs; and
  • What it all means going forward.

Resources

Kenneth Polite Speech

Updated CEP

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31 Days to More Effective Compliance Programs

Day 26 – Compliance Function in an Organization

The role of the compliance professional and the compliance function in a corporation has steadily grown in stature and prestige over the years. When it came to the corporate compliance function, the 2020 FCPA Resource Guide, under the Hallmarks of an Effective Compliance Program, noted the government would “consider whether the company devoted adequate staffing and resources to the compliance program given the size, structure, and risk profile of the business.” The Monaco Memo and 2023 changes to the Corporate Enforcement Policy have made this all the more critical going forward.

This Hallmark was significantly expanded in the FCPA Corporate Enforcement Policy and 2020 Update. In the FCPA Corporate Enforcement Policy, the DOJ listed the following as factors relating to a corporate compliance function that it would consider as indicia of an effective compliance and ethics program: 1) the resources the company has dedicated to compliance; 2) the quality and experience of the personnel involved in compliance, such that they can understand and identify the transactions and activities that pose a potential risk; 3) the authority and independence of the compliance function and the availability of compliance expertise to the board; 4) the compensation and promotion of the personnel involved in compliance, in view of their role, responsibilities, performance, and other appropriate factors; and 5) the reporting structure of any compliance personnel employed or contracted by the company.

The 2020 Update, Monaco Memo, and 2023 update to the Corporate Enforcement Policy all demonstrate the continued evolution in the thinking of the DOJ around the corporate compliance function. Their articulated inquiries can only strengthen a corporate compliance function specifically; and the compliance profession more generally. The more the DOJ talks about the independence of the compliance function, coupled with resources being made available and authority concomitant with the corporate compliance function, the more corporations will see it is directly in their interest to provide the resources, authority, and gravitas to compliance position in their organizations.

Three key takeaways:

  1. How is compliance treated in the budget process?
  2. Has your compliance function had any decisions overridden by senior management?
  3. Beware of compliance outsourcing, as any such contractor must have access to company documents and personnel.
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Corruption, Crime and Compliance

Episode 249 – DOJ Issues New Corporate Enforcement Policy

The Biden Administration promised a new, aggressive approach to corporate crime. Well, the Justice Department just delivered a new, comprehensive policy that raises a number of issues, some of which are likely to be controversial. The new policy incorporates reforms announced last October that largely centered on prior corporate criminal and civil records, the appointment of independent compliance monitors, and expanding the review of responsible persons in an internal investigation. The Justice Department’s new Corporate Enforcement Policy (“CEP”), however, expands on earlier policy changes but includes some new and far-reaching reforms intended to increase individual accountability and promote corporate culture through financial incentives and deterrence policies. This last idea is a significant expansion of DOJ’s CEP and is sure to reverberate through the business and compliance community. Chief compliance officers face a new requirement for their companies — creating an effective system of carrots and sticks to punish misconduct and increase rewards for ethical behavior.DOJ’s new CEP also lays the groundwork for further consideration of corporate responsibility for preserving electronic messaging, ephemeral services, and other electronic data. DOJ’s discussion in this area reflects DOJ’s frustration with a corporate internal investigation that omits access to electronic data, especially in those situations where employees use personal devices for business-related communications. The revised CEP provides guidance to prosecutors and the business community to ensure individual and corporate accountability through the evaluation of various factors, including (1) Corporate History of Misconduct; (2) Self-Disclosure and Cooperation; (3) the Strength of a Company’s Compliance Program; (4) the Use and Monitoring of Corporate Monitors (including their selection and scope of a monitor’s work).