Memorandum “Selection of Monitors in Criminal Division Matters”
On October 11, 2018, the U.S. Department of Justice released revised guidelines on the imposition and selection of corporate monitors. The memorandum (by Brian Benczkowski, Assistant Attorney General) supplements the DOJ’s guidelines on the imposition and selection of corporate monitors (in particular the so-called “Morford Memorandum” of March 7, 2008) and applies “to all Criminal Division determinations regarding whether a monitor is appropriate in specific cases and to any deferred prosecution agreement (‘DPA’), non-prosecution agreement (‘NPA’), or plea agreement between the Criminal Division and a business organization which requires the retention of a monitor.”
In order to determine whether the imposition of a monitor is suitable in the individual circumstances of a case, the memorandum sets out that the relevant attorney in the Criminal Division of the DOJ should consider, “among other factors: (a) whether the underlying misconduct involved the manipulation of corporate books and records or the exploitation of an inadequate compliance program or internal control systems; (b) whether the misconduct at issue was pervasive across the business organization or approved or facilitated by senior management; (c) whether the corporation has made significant investments in, and improvements to, its corporate compliance program and internal control systems; and (d) whether remedial improvements to the compliance program and internal controls have been tested to demonstrate that they would prevent or detect similar misconduct in the future.”
The memorandum also contains additional procedural guidance in relation to the process of selecting and appointing a monitor.
In light of the discussions around the introduction of a new “corporate sanctions law” in Germany, partly including the concept of German Compliance Monitorships, the newly issued memorandum can serve as a valuable source and add additional aspects to be considered.
The memorandum can be downloaded here.