The U.S. Department of Justice (DOJ) has updated its Evaluation of Corporate Compliance Programs (ECCP) to reflect new areas of focus, including the management of risks associated with emerging technologies like AI, the protection of whistleblowers, and enhanced data access for compliance functions. These modifications aim to provide companies with clearer guidelines to improve their compliance frameworks, ultimately leading to better outcomes during enforcement actions.
On September 23, 2024, the U.S. Department of Justice (DOJ) released an updated version of its Evaluation of Corporate Compliance Programs (ECCP) guidance, initially introduced in 2017. This latest version outlines the criteria that DOJ Criminal Division prosecutors will consider when evaluating corporate compliance programs in the context of criminal enforcement actions. While primarily intended for DOJ prosecutors, the ECCP serves as a vital resource for companies aiming to enhance their compliance frameworks. An effective compliance program improves the likelihood of achieving favorable outcomes in enforcement actions, including reduced penalties and less burdensome compliance obligations. The recent updates emphasize the DOJ’s commitment to understanding how compliance programs are designed, evolve, and function in managing relevant risks. Key additions in the ECCP include: Risks Associated With New and Emerging Technology: The ECCP now highlights the necessity for corporations to evaluate risks stemming from emerging technologies, particularly artificial intelligence (AI) in compliance operations. Prosecutors will assess whether companies have effectively mitigated risks associated with AI usage and have established appropriate policies. Incentivizing and Protecting Whistleblowers: The updated guidance underscores the DOJ’s escalating focus on internal whistleblowing as an essential mechanism for identifying misconduct. Prosecutors will evaluate companies’ policies, training programs, and protective measures for individuals who report wrongdoing. Access to Data and Resources for Compliance Functions: The revised ECCP reaffirms the importance of resourcing compliance functions adequately. It directs prosecutors to consider whether compliance personnel have timely access to data and whether data analytics tools are utilized for effective monitoring. Incorporating Lessons Learned: The ECCP now includes considerations for how companies leverage lessons from past misconduct to refine their compliance programs, ensuring continual improvement in risk management. Post-Transaction Compliance Integration: The revisions highlight the need for compliance functions to play a significant role in M&A activities, particularly in post-transaction integration processes to adequately assess and manage compliance risks associated with newly acquired entities. These updates collectively provide companies with a fortified framework to align their compliance initiatives with DOJ expectations. Corporate entities must adapt their compliance strategies in light of these changes, focusing on AI and emerging technology risks, enhancing whistleblower protections, ensuring data access, incorporating lessons learned, and integrating compliance efforts in merger and acquisition activities.
The updates made to the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) on September 23, 2024, reflect a significant evolution in the examination and evaluation of corporate compliance frameworks. Introduced originally in 2017, the ECCP was designed to offer insights into how prosecutors assess the effectiveness of compliance programs in the context of criminal enforcement actions. The guidance aims not only to help prosecutors in their evaluations but also serves as a crucial tool for companies to self-assess and improve their compliance mechanisms. With increased scrutiny on corporate behavior and regulatory expectations, the ECCP is particularly relevant in the evolving landscape marked by technological advancements such as AI, alongside a renewed emphasis on whistleblower protections and robust data utilization for compliance purposes.
In summary, corporations should undertake a thorough review of their compliance programs in light of the recent ECCP updates. This review should prioritize identifying and addressing risks associated with AI and other emerging technologies, bolstering whistleblower protection mechanisms, ensuring effective post-transaction compliance integration, and affirmatively utilizing organizational data for compliance enhancement. The DOJ’s heightened focus on these themes underscores the critical importance of maintaining a sophisticated and proactive compliance strategy in alignment with regulatory expectations.
Original Source: www.skadden.com
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