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Is it a bona fide expenditure or bribe?

Jacqueline Peterson ( is former Director of Anticorruption, Compliance and Ethics Services at Weaver.

In a recently issued guidance from the U.S. Department of Justice (DOJ) regarding the evaluation of corporate compliance programs (the Guidance), the Criminal Division lays out what prosecutors should consider when determining “whether, and to what extent, the corporation’s compliance program was effective at the time of the offense, and is effective at the time of a charging decision or resolution, for purposes of determining the appropriate (1) form of any resolution or prosecution; (2) monetary penalty, if any; and (3) compliance obligations contained in any corporate criminal resolution (e.g., monitoring or reporting obligations.”[1] The Guidance recommends that prosecutors evaluate the following “fundamental questions: 1. Is the corporation’s compliance program well designed? 2. Is the program being applied earnestly and in good faith? 3. Does the corporation’s compliance program work in practice?”

One of the key tools for determining if a compliance program is well designed and effective is to understand the company’s risk profile by conducting internal risk assessments. The Guidance lays out in some detail what should be considered when a company conducts internal risk assessments and, in typical DOJ fashion, also states that the Guidance “form[s] neither a checklist nor a formula,” leaving prosecutors free to consider additional factors when making charging decisions and in calculating organizational criminal fines. Of the litany of factors the Guidance lays out, one has long been known to create issues for companies: gifts, travel, and entertainment. It has been clear for those of us who have been handling anti-corruption matters for many years that effective compliance programs must have policies on gifts, travel, and entertainment. Many multinational companies maintain very strict dollar amounts and frequency limits for gifts, travel, and entertainment spent on public-sector or foreign officials. And with the implementation of the UK Bribery Act (UKBA) in 2011, many multinational companies created similar dollar amount and frequency limits for commercial accounts and clients.

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