Regulatory alert

Updated 2020 guidance from the DOJ on effective corporate compliance programmes

On 1 June 2020, the U.S. Department of Justice’s (DOJ) Criminal Division published updated guidance on the ‘Evaluation of Corporate Compliance Programmes’ (Guidance) to reflect its evolving view of the adequacy and effectiveness of the Corporate Compliance Programmes (CCP). Besides prosecutors, the guidance has been used by general counsels, compliance officers of companies to design and implement a compliance programme that is considered ‘adequate and effective’ when an investigation arises.

This guidance was last updated in April 2019, which organised various elements of an effective CCP under three fundamental questions: 1) is the compliance programme well designed? 2) is the programme being implemented effectively and in good faith? 3) does the compliance programme work in practice?

While the June 2020 update has retained most of the earlier content, the key changes include in the following areas

  1. Reasonable and individualised approach for CCP evaluation
  2. Periodic risk assessment of compliance programmes ‘snapshots’
  3. Ease of reference and tracking access to policies and procedures
  4. Effectiveness of training and its impact evaluation
  5. Effectiveness of the reporting mechanism
  6. Third-party risk management – not a one-time exercise
  7. Timely and orderly integration and post-acquisition audits
  8. Adequate resourcing and empowerment of CCP to function effectively

The 2020 updates to the DOJ guidance is a clear call to move away from ‘tick-in-the box’ compliance. It has become imperative for companies to understand that a good design will not sail through if it fails in practical application.

Please feel free to reach out to Jagvinder S Brar in case of any queries

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