New US Department of Justice’s Guidance

On April 30, 2019, the criminal division of the U.S. Department of Justice (“DOJ”) approved an updated version of its guidance on evaluating corporate compliance programs (the “DOJ Guidance”). In a similar way, in October 2018, the Argentine Anti-corruption Office (“AO”) issued guidelines on integrity programs under law 27,401, which makes legal entities liable for bribery-related conducts (the “AO Guidelines”). For more information regarding the OA Guidelines, see “The Argentine Anti-corruption Office Enacts Guidelines on Compliance Programs”.

We will analyze certain similarities and differences between both documents.

Recipients: The DOJ Guidance, “meant to assist prosecutors” of the DOJ, is useful for companies while considering their compliance programs. The AO Guidelines are addressed to a wider group of people since, as explained in their introduction, they are relevant to “companies, civil society organizations, other legal entities, state agencies, members of the justice system and the professional community”.

Purpose: The DOJ Guidance provides prosecutors with a guidance to make an “informed decision to whether, and to what extent, the corporation’s compliance program was effective at the time of the offence, and is effective at the time of a charging decision or resolution”, to determine the form of resolution or prosecution, and to set the monetary penalties and the compliance obligations. The AO Guidelines are meant to provide a technical guidance to better comply with the provisions of Law 27,401 with regard to corporate compliance programs in general terms, not only when the programs are under scrutiny in a criminal investigation. In such context, the guidelines contain parameters for companies to consider when structuring and evaluating their compliance programs as well as the steps to follow when implementing those programs.

 Evaluation of compliance programs: In contrast with the DOJ Guidance, the AO Guidelines do not address the “effectiveness” of compliance programs but rather if they are “adequate”. They would be considered “adequate” if “their particular design and implementation is grounded in three (3) clearly established parameters: risk, size and economic capacity”.

Structure and extension: The DOJ Guidance is organized into three basic matters: (1) if the compliance program of the company under investigation is well designed, (2) if it is being implemented effectively, and (3) if it is working in practice. In such context, in its 18 pages, the DOJ Guidance includes a brief analysis of certain elements of compliance programs, including questions for prosecutors to evaluate such programs.

The AO Guidelines contain different chapters analyzing each element of compliance programs and also certain issues related to them. The guidelines analyze, in 70 pages, among others, the following: the “adequateness” of compliance programs, the steps for designing and implementing a compliance program, the process to perform an initial risk assessment, and the elements that a compliance program should have according to the provisions of Law 27,401.

Elements of compliance programs: The DOJ Guidance and the AO Guidelines analyze similar elements of compliance programs. These elements are: (1) initial and periodic risk assessments, (2) code of conduct, policies and procedures, (3) trainings and communications, (4) whistleblower channels and protections, (5) internal investigation processes to understand the reported facts and to establish sanctions, (6) third party due diligence, (7) due diligence in M&A transactions, (8) top, senior and middle management commitment, (9) persons in charge of the compliance program that count on sufficient autonomy and resources, and (10) periodic monitoring and assessment of the compliance program.

However, the DOJ Guidance mentions certain aspects that are not included in the AO Guidelines, which are: corporate incentives for compliance with corporate compliance programs, and the investments in and improvements to the corporate internal control system.

Risk analysis and conducts: Both the AO and the DOJ criminal division highlight the relevance of risk assessments. To clarify this point, the DOJ Guidance establishes that the starting point for a prosecutor’s evaluation is to understand the company’s business, its risk profile and the manner in which the company addressed the risks to commit the illegal conducts that the DOJ criminal division investigates, including, among them, bribery, as per the terms of the Foreign Corrupt Practices Act (FCPA). The AO Guidelines establishes that the first step to design and implement a compliance program is to conduct a risk assessment to determine the chances that any corrupt conduct established in Argentine Anti-corruption Law 27,401 may occur, and the mechanisms to mitigate those risks.

It is worth mentioning that one of the documents that the AO took into consideration while drafting its guidelines was the 2017 version of the DOJ Guidance.