UNDERSTANDING EVOLVING US GOVERNMENT EXPECTATIONS FOR COMPLIANCE PROGRAMMES
Recent pronouncements from US governmental authorities have signalled a convergence of heightened expectations surrounding company compliance programme and related enforcement priorities. The Criminal Division of the US Department of Justice (DOJ) and the US Treasury Department’s Office of Foreign Assets Control (OFAC) have issued guidance reflecting the evolution of their positions on critical compliance issues. The guidance now consistently emphasises: (i) whether a corporation’s compliance programme is well-designed; (ii) whether the programme has been effectively implemented; and (iii) whether the programme works in practice. These themes are of critical importance to members of senior management, general counsels, compliance officers and department heads of multinational corporations and financial institutions given the likelihood of increased regulatory focus on these areas and the fact that the themes are consistent with similar guidance issued by the Serious Fraud Office (SFO) in the UK and the European Union (EU) Commission.
Compliance programme design
At the core of US authorities’ assessments of whether a corporation’s compliance programme is well-designed is consideration of the programme’s comprehensiveness and clear conveyance in the programme and by senior management of the message that misconduct is not tolerated. In addition, the guidance strongly encourages companies to implement risk-based programmes that devote attention and resources to high-risk areas, with the authorities recognising that even a well-designed compliance programme cannot prevent all infractions. Other focal points of the analysis include, among others, the implementation of risk assessments, training and communications, a confidential reporting structure and investigation process, mechanisms for the effective management of third parties, and audit and testing.
Apr-Jun 2020 Issue
Cleary Gottlieb Steen & Hamilton LLP