Sunday, December 10, 2023
Lawyers Run The WorldFederal Government Enhances Focus on Corporate Compliance Programs

Federal Government Enhances Focus on Corporate Compliance Programs


- Advertisment -spot_img

The U.S. Department of Justice’s Criminal Division recently released an update to the guidance document “Evaluation of Corporate Compliance Programs.”

Immediately thereafter, the Department of the Treasury’s Office of Foreign Assets Control published “A Framework for OFAC Compliance Commitments,” which provides guidance on effective sanctions compliance programs. The OFAC is the primary federal agency that enforces economic and trade sanctions.

Updated DOJ Guidance

The updated DOJ guidance covers various compliance program expectations and threshold questions that prosecutors ask while evaluating whether to initiate criminal charges against an offending corporation. In many respects, the new guidance mirrors factors considered by many a Federal Trade Commission (FTC) attorney when investigating violation of consumer protection laws and considering enforcement against Internet marketers and data-driven businesses.

First, whether the corporations compliance program is well designed.

The “critical factors in evaluating any program are whether the program is adequately designed for maximum effectiveness in preventing and detecting wrongdoing by employees and whether corporate management is enforcing the program or is tacitly encouraging or pressuring employees to engage in misconduct.”

Accordingly, prosecutors examine “the comprehensiveness of the compliance program,” ensuring that there is not only a clear message that misconduct is not tolerated, but also policies and procedures – from appropriate assignments of responsibility, to training programs, to systems of incentives and discipline – that ensure the compliance program is well-integrated into the company’s operations and workforce.

The starting point for a prosecutor’s evaluation of whether a company has a well-designed compliance program is to understand the company’s business from a commercial perspective, how the company has identified, assessed, and defined its risk profile, and the degree to which the program devotes appropriate scrutiny and resources to the spectrum of risks.

Prosecutors consider whether the program is appropriately “designed to detect the particular types of misconduct most likely to occur in a particular corporation’s line of business” and “complex regulatory environment.” For example, prosecutors consider whether the company has analyzed and addressed the varying risks presented by, among other factors, the location of its operations, the industry sector, the competitiveness of the market, the regulatory landscape, potential clients and business partners, transactions with foreign governments, payments to foreign officials, use of third parties, gifts, travel, and entertainment expenses, and charitable and political donations.

Prosecutors also consider “the effectiveness of the company’s risk assessment and the manner in which the company’s compliance program has been tailored based on that risk assessment” and whether its criteria are “periodically updated.”

Prosecutors may credit the quality and effectiveness of a risk-based compliance program that devotes appropriate attention and resources to high-risk transactions, even if it fails to prevent an infraction in a low-risk area. Prosecutors therefore consider, as an indicator of risk-tailoring, “revisions to corporate compliance programs in light of lessons learned.”

Organizations should address risks in written compliance policies and procedures with an experienced FTC attorney, ensuring clearly communication to employees and relevant third parties. Periodic compliance training and an investigation process are crucial to mitigate exposure.

Second, whether the compliance program is implemented effectively.

It is the DOJ’s perspective that effective compliance begins with a culture of compliance established by management. DOJ tends to review efforts taken by company leaders to encourage legal compliance, punish wrongdoing and document corporate compliance.

Third, whether the compliance program works in practice.

Prosecutors evaluate how a corporate compliance program works while deciding whether criminal charges are warranted. Companies are expected to employ compliance audits and update risk assessments. Investigations and remedial structures should be effective and the results well documented.

OFAC Compliance Framework

The OFAC’s framework encourages companies to implement tailored risk-based sanctions compliance programs. At OFAC’s discretion, those with such programs may be eligible for reduced monetary penalties.

The framework identifies five key components, including management commitment, risk assessment, internal controls, testing and auditing, training.

Takeaway: Both the updated DOJ guidance and the OFAC framework provide meaningful insight into how companies should design and implement compliance programs. The DOJ and OFAC also recognize that compliance will vary from company to company, and industry-to-industry. Performance marketers should take notes as the considerations outlined by the DOJ and OFAC are strikingly similar to issues considered by the FTC and state attorneys general when evaluating wrongdoing and potential civil liability..

Contact the author at in order to discuss recent trends in advertising compliance enforcement policy, or if you are the subject of an FTC investigation (CID) or enforcement action. You can also follow FTC lawyer on National Law Review.

Richard B. Newman is an FTC compliance lawyer and Internet marketing attorney at Hinch Newman LLP.

Attorney advertising. Informational purposes only. Not legal advice.

Richard B. Newman
Richard B. Newman
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

What's your opinion?

Latest news

Yahoo Rises from the Digital Ashes: An AI Comeback Tale

Silicon Valley giants and plucky startups alike vie for the spotlight in the adtech world but a familiar name...

Billion-Dollar Blindspots: The ANA Report’s Eye-Opening Revelations

In the complex world of digital advertising, the Association of National Advertisers (ANA) has released a groundbreaking report, shedding...

Streaming TV’s Power Couple: FreeWheel and Index Exchange Join Forces

This era is definitely characterized by the rapid and transformative growth of streaming television, and the advertising and programmatic...

The Partnership Pioneers:’s Game-Changing Year in Review

As 2023 sketched its vibrant narrative, dazzled as a trailblazer in the realm of international performance marketing and...

The Great Attribution Illusion: A Marketer’s Modern-Day Haunting

Attribution in marketing is a specter that haunts the digital corridors with promises and pitfalls alike—a phantom stitched together...

Roblox Roulette: Why Some Brands Win, and Others Just Lose

A common misconception continues to lure brands into treacherous waters: the belief that mere presence guarantees relevance, and relevance,...

Must read

The Partnership Pioneers:’s Game-Changing Year in Review

As 2023 sketched its vibrant narrative, dazzled as...

The Great Attribution Illusion: A Marketer’s Modern-Day Haunting

Attribution in marketing is a specter that haunts the...

You might also likeRELATED
Recommended to you