U.S. Sentencing Commission Sends Congress New Requirements for an Effective Compliance and Ethics Program

The U.S. Sentencing Commission recently promulgated amendments to the Federal Sentencing Guidelines that pertain to the sentencing of corporations and other organizations.¹ Companies will want to consider whether and how to modify their compliance and ethics programs in light of these amendments.

Under the Federal Sentencing Guidelines, a company convicted of a crime is eligible to have its sentence reduced by demonstrating that it had an effective compliance and ethics program in place at the time of the offense. Under the current Guidelines, companies are automatically disqualified from the benefit of this provision if "an individual within high-level personnel of the organization...participated in, condoned, or was willfully ignorant of the offense."² The new amendments remove this automatic disqualification provision. Pursuant to the amendment, companies will now be eligible for reduction to their Guidelines sentences provided the following four criteria are met: