A. General Principle: Compliance programs are established by corporate management to prevent and detect misconduct and to ensure that corporate activities are conducted in accordance with applicable criminal and civil laws, regulations, and rules. The Department encourages such corporate self-policing, including voluntary disclosures to the government of all facts relating to misconduct that a corporation discovers on its own. See JM 9-28.900. However, the existence of a compliance program is not sufficient, in and of itself, to justify not charging a corporation for criminal misconduct undertaken by its officers, directors, employees, or agents. The nature of some crimes may be such that prosecutions of corporations are warranted notwithstanding the existence of a compliance program.

The adequacy of a corporation’s compliance program, including its corporate culture, however, can have a direct and significant impact on the terms of any resolution with the Department. Prosecutors should evaluate a corporate compliance program as a factor in determining, inter alia, whether to charge the corporation, the terms of a corporate resolution, and the need for an independent compliance monitor. Prosecutors should evaluate the corporation’s commitment to fostering a strong culture of compliance at all levels of the company. For example, as part of this evaluation, prosecutors should consider how the company has incentivized employee, executive, and director behavior, including through employee discipline, treatment of internal complaints of wrongdoing, and compensation plans, as part of its efforts to create an ethical and well-resourced compliance culture and organization.

Prosecutors should assess the adequacy and effectiveness of the corporation’s compliance program at two points in time: (1) the time of the offense; and (2) the time of a charging decision. The same criteria should be used in each instance.

B. Comment: The existence of a corporate compliance program, even one that specifically prohibited the very conduct in question, does not absolve the corporation from criminal liability under the doctrine of respondeat superior. See United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th Cir. 1983) ("[A] corporation may be held criminally responsible for antitrust violations committed by its employees if they were acting within the scope of their authority, or apparent authority, and for the benefit of the corporation, even if ... such acts were against corporate policy or express instructions."). As explained in United States v. Potter, 463 F.3d 9 (1st Cir. 2006), a corporation cannot "avoid liability by adopting abstract rules" that forbid its agents from engaging in illegal acts, because "[e]ven a specific directive to an agent or employee or honest efforts to police such rules do not automatically free the company for the wrongful acts of agents." Id. at 25-26. See also United States v. Hilton Hotels Corp., 467 F.2d 1000, 1007 (9th Cir. 1972) (noting that a corporation "could not gain exculpation by issuing general instructions without undertaking to enforce those instructions by means commensurate with the obvious risks"); United States v. Beusch, 596 F.2d 871, 878 (9th Cir. 1979) ("[A] corporation may be liable for acts of its employees done contrary to express instructions and policies, but ...the existence of such instructions and policies may be considered in determining whether the employee in fact acted to benefit the corporation.").

When evaluating a compliance program in the context of an identified violation of law, prosecutors are necessarily examining a violation of law that a corporation failed to prevent. However, this does not necessarily mean that the compliance program was poorly designed, operated in bad faith, or lacked adequate resources. Failures may occur even in well-designed compliance programs, as a result of honest mistakes or deliberate circumvention by bad actors.

In evaluating the effectiveness of a compliance program, prosecutors should consider not only its comprehensiveness, but also, among other factors, the extent and pervasiveness of the criminal misconduct; the level of the corporate employees involved; the seriousness, duration, and frequency of the misconduct; and any prior remedial actions taken by the corporation, including, for example, disciplinary action against past violators uncovered by the compliance program, as well as those employees, officers, directors and third parties who may have tolerated, condoned, or encouraged criminal wrongdoing or failed to supervise adequately or install appropriate safeguards; and any revisions to corporate compliance programs in light of lessons learned. [1] As part of assessing a corporation’s culture and commitment to compliance, prosecutors should also consider the promptness of any disclosure of wrongdoing to the government; whether management disregarded the misconduct; and whether there was a failure to report any significant misconduct to corporate leadership or the board of directors.

While the Department recognizes that no compliance program can ever prevent all criminal activity by a corporation's employees, the critical factors in evaluating any program are whether the program is adequately designed for maximum effectiveness in preventing and detecting wrongdoing by employees and whether corporate management is enforcing the program or is tacitly encouraging or permitting employees to engage in misconduct to achieve business objectives. The Department has no formulaic requirements regarding corporate compliance programs. The fundamental questions any prosecutor should ask are: (1) Is the corporation’s compliance program well designed? (2) Is the program being applied earnestly and in good faith? In other words, is the program adequately resourced and empowered to function effectively? And (3) Does the corporation’s compliance program work in practice? See U.S. Department of Justice, Criminal Division, Evaluation of Corporate Compliance Programs (last updated March 2023, available at https://www.justice.gov/criminal-fraud/page/file/937501/download).

Prosecutors should therefore attempt to determine whether a corporation’s compliance program is merely a "paper program" or whether it was designed, implemented, resourced, reviewed, and revised, as appropriate, in an effective manner. In this regard, prosecutors evaluate a corporation’s method for assessing and addressing applicable risks and designing appropriate controls to manage these risks. Prosecutors also should determine whether the corporation's employees are adequately informed about the compliance program and are convinced of the corporation's commitment to it. Further, prosecutors should evaluate a corporation’s methods for testing and measuring the effectiveness of its compliance program, including consideration of whether the corporation has sufficient resources to effectively monitor, audit, document, analyze, and utilize the results of the corporation’s compliance efforts.

As part of this evaluation, prosecutors should consider whether the corporation has fostered a culture in which employees feel comfortable raising concerns, or one that discourages open discussion of such matters.

Careful consideration of these factors will enable prosecutors to make an informed decision as to whether the corporation has adopted and implemented a truly effective compliance program that, when consistent with other federal law enforcement policies, may result in a decision to charge only the corporation's employees and agents or to mitigate charges or sanctions against the corporation. [1]

Compliance programs should be designed to detect and prevent the particular types of misconduct most likely to occur in a particular corporation’s line of business. At times, corporations operate in complex regulatory environments outside the normal experience of criminal prosecutors. Accordingly, prosecutors should consult with relevant federal and state agencies with the expertise to evaluate the adequacy of a compliance program's design and implementation. For instance, state and federal banking, insurance, and medical boards, the Department of Defense, the Department of Health and Human Services, the Environmental Protection Agency, and the Securities and Exchange Commission have considerable experience with specialized compliance programs and can be helpful to prosecutors in evaluating such programs. In addition, the Fraud Section and Money Laundering, Narcotics and Forfeiture Section of the Criminal Division, the Consumer Protection Branch of the Civil Division, the Commercial Litigation Branch of the Civil Division, and the Environmental Crimes Section of the Environment and Natural Resources Division can assist United States Attorneys' Offices in finding the appropriate agency office(s) for such consultation.

Use of Communication Platforms & Personal Devices

As part of evaluating a corporation’s policies and mechanisms for identifying, reporting, investigating, and remediating potential violations of law, prosecutors should consider whether the corporation has implemented effective policies and procedures governing the use of personal devices and communication platforms, including third-party applications, to ensure that business-related electronic data and communications are preserved.

Compensation Structures that Promote Compliance

Corporations can help to deter criminal activity if they reward compliant behavior and penalize individuals who engage in misconduct. Compensation systems that clearly and effectively impose financial penalties for misconduct can incentivize compliant conduct or deter risky behavior. In assessing a compliance program, prosecutors should consider whether the corporation’s compensation agreements, arrangements, and packages (the “compensation systems”) incorporate elements—such as compensation clawback provisions—that enable financial recoveries and penalties to be levied against current or former employees, executives, or directors whose direct or supervisory actions or omissions contributed to criminal conduct Corporations can also foster an ethical corporate culture by rewarding those executives and employees who promote compliance within the organization. Prosecutors should therefore also consider whether a corporation’s compensation systems provide affirmative incentives for compliance-promoting behavior. Affirmative incentives include, for example, the use of compliance metrics and benchmarks in compensation calculations and the use of performance reviews that measure and reward compliance-promoting behavior, both as to the employee and any subordinates whom they supervise.

Prosecutors should review a corporation’s policies and practices regarding compensation and determine whether they are followed in practice. For example, if a corporation has included clawback provisions in its compensation agreements, prosecutors should consider whether, following the corporation’s discovery of misconduct, a corporation has, to the extent possible, taken affirmative steps to execute on such agreements and clawback compensation previously paid to current or former executives whose actions or omissions resulted in, or contributed to, the criminal conduct at issue.

[updated January 2026]

[1] For a detailed review of these and other factors concerning corporate compliance programs, see U.S.S.G. § 8B2.1.