The United States Sentencing Commission has proposed some changes to the Federal Sentencing Guidelines. Of the eight changes, one should catch the eye of compliance professionals.
There is a proposed amendment to Chapter Eight of the Guidelines Manual regarding the sentencing of organizations, including proposed changes to §8B2.1 (Effective Compliance and Ethics Program) and §8D1.4 (Recommended Conditions of Probation — Organizations).
In §8B2.1 (Effective Compliance and Ethics Program) they are inserting a new Note 6 that would add a new requirement for an effective compliance and ethics program. The note focuses on the steps to take after the detection of criminal conduct.
First, the organization must respond appropriately to the criminal conduct, including restitution to the victims, self-reporting and cooperation with authorities.
Second, the organization must assess its program and modify it to make the program more effective. They seem to encourage the use of an independent monitor to ensure implementation of the changes.
The proposed amendment amends §8D1.4 (Recommended Conditions of Probation – Organizations) (Policy Statement) to simplify the recommended conditions of probation for organizations. The new section consolidates the list of conditions that are appropriate conditions for probation.
Request for Comments
In addition to the proposed amendment the Sentencing Commission has is considering an issue and are asking for comment:
Should the Commission amend §8C2.5(f)(3) (Culpability Score) to allow an organization to receive the three level mitigation for an effective compliance program even when high-level personnel are involved in the offense if
(A) the individual(s) with operational responsibility for compliance in the organization have direct reporting authority to the board level (e.g. an audit committee of the board);
(B) the compliance program was successful in detecting the offense prior to discovery or reasonable likelihood of discovery outside of the organization; and
(C) the organization promptly reported the violation to the appropriate authorities?
Written comments are due by March 22, 2010.
- Proposed Amendments to the Sentencing Guidelines (January 21, 2010)
- Federal Register Notice
- Considerable Incentive for Corporations to Revise Their Internal Compliance Programs, a White Collar Update from Baker Botts LLP
- Plan Would Soften White-Collar Fines by Gary Fields for the Wall Street Journal