Effective Compliance Program Research Articles

Musings on a Career in Applied Fisheries Economics Research

This paper chronicles my fisheries compliance and enforcement research during the past 40 years. My colleagues and I at the University of Rhode Island began researching fisheries law enforcement issues around 1980 because of the high degree of noncompliance in fisheries managed by the New England Fisheries Management Council. We collected data and demonstrated that the pure deterrence model does not explain fisheries compliance behavior well. This set us on a course to develop an enriched model of compliance behavior. The formal enriched model accounts for tangible and intangible motivations influencing individuals’ compliance decisions, resulting in better explanations of the evidence than the pure deterrence model. The model also provides practical and superior policy prescriptions. Although the enriched model is superior to the basic pure deterrence model, much research remains to be done on explaining compliance behavior and crafting more efficient and effective compliance and regulatory programs in fisheries.

Conflict Management As a Pillar of Compliance Systems In Privacy


 
 
 Objective: To identify the advantages of applying conflict management knowledge in privacy compliance actions and to provide strategies for the prevention and management of privacy conflicts.
 Problem: Although privacy is an important topic in society, it still requires efforts to be incorporated into the social fabric as a concrete value. Institutions that perform data processing activities are inevitably faced with the need to understand the interests of data subjects and third parties involved, and to identify the use of resources assertively in order to protect their activities and maintain relationships with other parties. Therefore, compliance programs in privacy must consider conflict management, in addition to regulatory compliance, to avoid conflicts and provide opportunities for their management.
 Method: The research will be conducted through a literature review, analyzing existing knowledge related to conflict management and privacy compliance. 
 Results and Conclusions: The research will identify the benefits of incorporating conflict management knowledge in privacy compliance programs. The study will also provide strategies for the prevention and management of privacy conflicts, thus contributing to the development of effective compliance programs that consider conflict management as a fundamental pillar. Finally, this research aims to raise awareness of the importance of addressing privacy conflicts as a means of promoting privacy as a value in society.
 
 

Enhancing Corporate Responsibility: The Importance of Human Rights Compliance Systems and the Shortcomings of Brazilian Decree N. 9.571/2018


 
 
 Objective: To analyze Decree No. 9.571/2018 and highlight the importance of implementing Human Rights Compliance systems in national and multinational companies, emphasizing their positive influence on business results and reputation.
 Problem: While some companies have adopted Human Rights policies, the absence of a mandatory requirement to implement Human Rights Compliance systems in national and multinational companies results in a guideline without practical effectiveness. This study aims to identify the need for mandatory implementation of Human Rights Compliance programs in companies to promote the protection and encouragement of Human Rights in the corporate-business environment.
 Method: This study employs a qualitative approach, utilizing document analysis to examine Decree No. 9.571/2018 and its implications. The study also draws upon literature related to Human Rights Compliance programs, Corporate Social Responsibility, and their impact on business results and reputation.
 Results: The study demonstrates the importance of implementing Human Rights Compliance systems in national and multinational companies, highlighting their potential positive impact on business results and reputation. The absence of a mandatory requirement for implementation limits the effectiveness of the decree and the promotion of Human Rights in the corporate-business environment.
 Conclusions: This study emphasizes the need for mandatory implementation of Human Rights Compliance systems in national and multinational companies. Such implementation will promote the protection and encouragement of Human Rights in the corporate-business environment while positively influencing business results and reputation. The study concludes that Decree No. 9.571/2018, while an important step, is insufficient in promoting effective Human Rights Compliance programs in companies and should be revised to include mandatory implementation requirements.
 
 

Elements of Effective Compliance Programs

Elements of Effective Compliance Programs

The anti‐corruption compliance models in a multinational company: A single case study

AbstractCorruption is considered a widespread plague in most countries. Human rights, economic development, and national security are just a few of the aspects affected by corruption. The emerging literature also shows that corruption is one of the main causes of environmental degradation (particularly among developing countries) and that the phenomenon is stronger in the case of multinational companies (MNCs) due to the necessary interaction between MNCs and the host market's public officials. In this scenario, corporate anti‐corruption programs may represent a key element to enhance social, economic, and environmental wellbeing. However, evidence relative to the effectiveness of anti‐corruption models are mixed showing that compliance structures are often window‐dressing mechanisms implemented by corporate management to mitigate the corporate liabilities associated with their employees' illegal behaviors, rather than the likelihood of criminal actions per se. Thus, a practical approach is needed to understand what are the main attributes that distinguish an effective compliance program from a formal/legal one. Using a single case study approach (Eni Group), this paper aims to identify the key traits to increase the effectiveness of a compliance program in detecting and preventing illegal behaviors.

The Regulation of Money Laundering and Corporate Criminal Responsibility in Spain:

Initiating with the conceptualization of who are Virtual Asset Service Providers (hence forward: exchangers) , especially the ones who work with virtual exchangeable assets, this paper aims to study the high risk their activities suppose on increasing money laundering and what are Spain ’s legal framework on money laundering and if they can be enforced on exchangers, based not only on the national legislation but also on the European Union’s existing directives on the subject. Moreover, it will be analysed the role of compliance as a practical procedure tool to prevent money laundering in exchangers activities and how the current legislation in Spain already promotes that, as the current criminal law extinguishes responsibility of legal persons who demonstrate an effective compliance program if they fulfil all requisites. Hence, this paper will be able to make a comprehensive study on exchangers, who they are and what are their activities as regulated in Spain’s legal framework. Therefore, is going to answer the investigation’s main question regarding the role of compliance to deter money laundering in this focus group.

Conflict Management As a Pillar of Compliance Systems In Privacy


 
 
 Objective: To identify the advantages of applying conflict management knowledge in privacy compliance actions and to provide strategies for the prevention and management of privacy conflicts.
 Problem: Although privacy is an important topic in society, it still requires efforts to be incorporated into the social fabric as a concrete value. Institutions that perform data processing activities are inevitably faced with the need to understand the interests of data subjects and third parties involved, and to identify the use of resources assertively in order to protect their activities and maintain relationships with other parties. Therefore, compliance programs in privacy must consider conflict management, in addition to regulatory compliance, to avoid conflicts and provide opportunities for their management.
 Method: The research will be conducted through a literature review, analyzing existing knowledge related to conflict management and privacy compliance. 
 Results and Conclusions: The research will identify the benefits of incorporating conflict management knowledge in privacy compliance programs. The study will also provide strategies for the prevention and management of privacy conflicts, thus contributing to the development of effective compliance programs that consider conflict management as a fundamental pillar. Finally, this research aims to raise awareness of the importance of addressing privacy conflicts as a means of promoting privacy as a value in society.
 
 

Communication And Training As Tools of a Labor Compliance Program

When implementing a compliance program, organizations need to focus on disseminating and ensuring adherence to this culture throughout their hierarchical structure, keeping employees and top management constantly updated and improved. As compliance encompasses a structure composed of nine pillars, this article aims to analyze, through literature research, the fifth pillar, which is communication and training, aligned with labor practices. It is essential to establish a connection between compliance and labor law and its application in the workplace. Being in compliance means being in accordance with both external and internal regulations, and therefore, these norms must be effectively communicated throughout the organization. Article 42, section IV of Decree 8,420 emphasizes the importance of training in a compliance program. The communication process enables the dissemination of corporate values and the standards that all individuals in a business environment must follow. Training serves as a tool to consolidate behaviors and mitigate risks, ensuring that all employees absorb the company's organizational culture. The methodology employed for this article involves data collection, information gathering, and literature research from national and international books, articles, online materials, as well as other public monographs and articles. It also involves documentary research based on laws, legal precedents, and other regulations. The research approach is monographic, as it focuses on the in-depth study of a specific theme. Utilizing effective management tools is essential for the successful implementation and maintenance of an effective compliance program, with communication and training playing a crucial role in the proper management of a business.

Neither Carrots nor Sticks: DOJ's Unfulfilled Commitment to Corporate Health Care Compliance

The Department of Justice (“DOJ”) has for decades sought to encourage four compliant behaviors in corporate actors: maintenance of an effective pre-existing compliance program, post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. While DOJ’s public statements reflect a claimed commitment to all four, analysis of DOJ policy and resolved cases makes clear that as DOJ has increasingly prioritized and incentivized the latter three behaviors, the first—maintenance of an effective pre-existing compliance program, the only one aimed towards stopping fraud before it occurs—has been cast aside in one of DOJ’s highest-profile enforcement areas.In criminal prosecutions, both DOJ policy and the United States Sentencing Guidelines (“USSG”) consider pre-existing compliance programs in determining whether a business entity should be prosecuted and the amount of a fine if a prosecution does occur. DOJ’s Criminal Division has hired compliance experts and enthusiastically publicized internal training aimed at improving prosecutors’ ability to evaluate corporate compliance programs. For the health care industry, however, the civil False Claims Act (“FCA”) is DOJ’s primary enforcement tool, and neither that DOJ policy nor the USSG apply. Instead, in civil cases DOJ guidance has been opaque or non-existent, offering little clarity as to how, if at all, DOJ will consider pre-existing compliance programs when resolving FCA cases. This is particularly surprising given that health care compliance has evolved over decades into a major industry not only with sophisticated and expensive corporate programs, but the subject of increasingly frequent and hands-on DOJ public statements and guidance.This article is the third in a series analyzing civil FCA resolutions, looking not only at DOJ’s stated policies but at actual outcomes through review of a data set of resolved cases against health care entities. Until now, those analyzing the extent of benefits for corporate compliance programs have focused on criminal cases, particularly those under the Foreign Corrupt Practices Act and primarily focused on the potential for a compliance defense to criminal liability. Surprisingly, the literature has to-date failed to analyze the question in the context of the FCA and thus the health care industry despite its supremacy as a DOJ enforcement target and although the FCA’s mens rea standard is more likely to sweep in cases where applying a compliance benefit would further DOJ’s enforcement goals.With health care enforcement gaining increased attention in the wake of government spending relating to COVID-19, and additional visibility into DOJ settlement policy now possible due to a change in the tax code, DOJ’s current failure to reward pre-existing compliance programs in FCA resolutions puts DOJ’s enforcement goals at risk, potentially demotivating corporate actors and adding to skepticism about DOJ’s motivations and the legitimacy of the enforcement regime, as it prevents DOJ from separating the most culpable corporate actors from those less worthy of condemnation. It is also a missed opportunity, as the large quantity of health care resolutions provides the potential for industry to learn from others’ compliance successes and failures, and for DOJ to encourage advancements as it claims to desire to do.

Well‐crafted compliance program prevents, detects and corrects malfeasance

Crafting an effective regulatory compliance program is an important duty for nonprofit board members looking to ensure that adequate policies and processes are in place to protect the organization from malfeasance and legal troubles that follow.

Enforcing Anti-Corruption Law in Cases of Superficial Compliance Implementation


 
 
 This study explores the application of Article 7, Item VIII of the Anticorruption Law (Law 12.846/2013), which considers the existence of integrity programs when imposing sanctions on companies that engage in harmful acts against the Public Administration. Using a descriptive and exploratory bibliographic research method, the study aims to investigate the effectiveness and validity of anti-corruption compliance programs. The study raises questions regarding the efficacy of compliance programs in preventing crimes against public administration, and the applicability of the mitigation provision in cases where companies adopt "false compliance." Although several states and municipalities have issued anti-corruption laws that require companies to adopt integrity programs, the current legislation does not provide definitive requirements for the implementation of compliance programs. Therefore, the study examines the problem of paper-based compliance or "false compliance," which may result in an artificial instrument and facilitate the transfer of information from top to bottom.
 The study argues that compliance programs must not only ensure compliance with the law, but also develop policies and ethical cultures that are aimed at all members of the social organization. This approach aligns with the company's social function principle and ensures that compliance programs, especially those aimed at preventing crimes, are effective. The study concludes that it is necessary to implement a compliance program that complies with compliance resolutions to ensure that the mitigation provided for in the Anticorruption Law is effectively valid and applicable. Ultimately, this study highlights the importance of a robust and effective compliance program in preventing corrupt practices within organizations and promoting accountability among directors and administrators of legal entities.
 
 

A Path to Data-Driven Health Care Enforcement

The Department of Justice (“DOJ”) has a long-stated goal of encouraging companies to engage in what the author refers to as “compliant behaviors”—maintenance of an effective pre-existing compliance program, post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. Substantial DOJ guidance over the past two decades, along with the concrete incentive structure of the United States Sentencing Guidelines, have increasingly made clear to organizations when and how such behaviors will be rewarded in criminal matters. Recently, DOJ has made transparency and clarity regarding the benefit of compliant behaviors a priority in calculating and announcing criminal resolutions. With respect to civil False Claims Act (“FCA”) settlements, however, meaningful formal DOJ guidance on the effect of compliant behavior only arrived in 2019. More significantly, DOJ’s treatment of compliant behavior in civil cases, in contrast to that in the case of criminal resolutions, has appeared inconsistent and certainly opaque. This lack of clear implementation philosophy is particularly problematic in the area of health care, an industry for which the FCA is the primary tool for government action in response to misconduct. While much has been written on the systemic efficiencies—or lack thereof—that DOJ’s enforcement practices bring to the activities of regulated industries, this is the first article to use data to ask whether DOJ has a governing practice concerning civil settlements, or whether instead, its settlement practices fail to match its stated principles. For decades, even as resources devoted to health care compliance by market participants have skyrocketed and DOJ has pressed corporate entities to engage in compliant behaviors, the health care industry and the defense bar have expressed skepticism regarding the actual payoff they might realize by engaging in those behaviors. DOJ’s response has been a series of public statements amounting to, “trust us, they matter.” Until now, the health care industry has been without any mechanism to test those assurances. In response to changes in the tax code, however, DOJ made adjustments in 2018 to its practice of disclosing information regarding FCA settlements—changes that have shaken loose data that provides an opportunity to test DOJ’s claims of rewarding compliant behaviors in civil cases. The author is the first and thus far the only person to have identified and analyzed this newly available data. Examination of this data demonstrates that wide-ranging, structural changes are necessary. The data raises substantial questions about: the quantum of credit given for cooperation; conduct DOJ values in resolving FCA cases; and the degree of consistency in cases settled by U.S. Attorney’s Offices across the country. For example, analysis of the data reveals inconsistent benefits for cooperation. Cases where defendants self-disclosed misconduct or cooperated were often not treated more leniently than cases where defendants did not self-disclose or cooperate, and a review of more than 100 settlements did not find a single instance in which DOJ purported to give an entity a reduction based on its pre-existing compliance program. At the same time, DOJ appears to be greatly rewarding defendants for agreeing to settle—highlighting concerns both with regard to whether DOJ is achieving adequate deterrence and with regard to whether the FCA’s potential penalties are coercing settlements. And the data appears to show significant variation in settlement positions depending on the identity of enforcing DOJ component, with cases handled by DOJ’s Civil Division in Washington, D.C. treated more leniently than cases handled solely by U.S. Attorney’s Offices across the country. With the data now public—and at a moment in time when DOJ is emphasizing transparency and clarity in rewarding compliant behaviors in the resolution of criminal cases—DOJ’s corporate health care enforcement regime is at a crossroads. Without change in this area, DOJ risks undercutting its efforts at encouraging compliant behaviors in one of DOJ’s primary enforcement areas. No longer left in the dark about the impact of compliant behaviors in calculating FCA resolutions, the health care industry may be less likely to continue investing in compliance programs at the same rate, to cooperate with government investigations, and especially to self-disclose misconduct to the government. The analysis reveals that a detailed structure of DOJ’s calculations in FCA settlements, with calculations transparent in each FCA resolution, is needed to accomplish DOJ’s goal of encouraging cooperation and investment in compliance programs, as well as to provide an assurance that like cases are treated alike.

Understanding Ethics and Compliance

This article provides a big-picture overview of the field of ethics and compliance, paying particular attention to the role and value of collaborating with human resources to achieving effective ethics and compliance programs. I hope this article will be useful to students of ethics and compliance, current and aspiring ethics and compliance practitioners, and professors who teach in the area. The article begins by exploring the historical milestones of ethics and compliance to establish the context and legal foundation of modern ethics and compliance practice. We go on to discuss the role of ethics and compliance teams in today’s companies, and the interplay of ethics and compliance, the general counsel’s office, and the human resources department. We then explore the critical function of the code of conduct in an effective ethics and compliance program, from which point we examine the importance of training and role modeling to achieving an ethical culture. We conclude by discussing internal investigations and whistleblowers. At every stop along the way, we look at the critical role of human resources and other key stakeholders in achieving effective ethics and compliance programs.

Finding the fit: Why compliance and ethics programs should seek to match individual and corporate values

Job seekers would like guidance on how to find a job with a firm whose values reinforce their own, a place that would be a good personal fit. At the same time, because of legal compliance requirements, it is crucial that employers find employees that fit the company’s value system so that the company can maintain an effective ethics and compliance program. This article looks at the legal, regulatory structure in both the U.S. and E.U. with an emphasis on reflexive corporate governance. It also reports the findings of a survey of E.U. and U.S. executives with a reputation for nurturing ethical business culture to discover what virtues and factors are most important and, thus, something a job seeker might look for in finding a strong, ethical company. Finally, the article raises the cognitive issues of the importance for job seekers to examine their own psychological biases so they are evaluating a position based on what really fits their values.

Enhancing Ethics and Combating Corruption: The Role of Compliance Programs in Healthcare

Globally, health is recognized as a second dimension right. However, despite its global relevance, it is not uncommon to hear about the difficulties in fully achieving universal, free, comprehensive, and non-discriminatory access to healthcare. This article aims to present, as its main reflection, the problem rooted in inappropriate practices concerning the use of public health resources. Given the complexity of the topic, the objective is to propose and promote the compliance program as a restorative palliative for the effectiveness of an ethics program and the fight against risks and corrupt acts. Firstly, the historical and legislative framework on the subject will be portrayed, aiming to demonstrate that despite reprehensible behavior, these practices persist over time. In the second chapter, compliance is presented as a means to curb corrupt practices, so that in the end, the third chapter can outline the essential pillars for implementing an effective healthcare compliance program. To obtain results and answers to the problem, the article aims to conduct a literature and legislative review using the deductive method to form new hypotheses given the current nature of the topic.

Compliance and Risk Management Committee

Compliance with laws and regulations applicable to the company’s business activities and identifying and managing the risks associated with those activities are two of the fundamental duties and obligations of the board of directors. The emergence of sustainability as a new factor for consideration in boardrooms has expanded the compliance duties to include adherence to voluntary standards that the board has committed to with respect to governance and environmental and social responsibility and broadened the definition of risks to include environmental and social issues and challenges. While creating a separate board committee to focus on compliance and risk management is not a new phenomenon, such committees have grown in importance and this chapter covers the role of the board and such committees in developing and overseeing compliance programs, elements of effective compliance programs, risk assessments and enterprise risk management systems and sustainability-related risks.

Money laundering, cybercrime and criminal responsibility of legal persons

Directives 2015/849, and 2018/843 on Money Laundering require continuous adaptations of the legal framework to respond to threats of the use of new technologies in money laundering. Directive 2018/843 extends the scope of Directive 2015/849 to providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers. Undoubtedly, the new payment systems facilitate money launderers’ criminal activity. These systems are better than cash for moving large sums of money, non-face to face business relationships favour the use of straw buyers, and false identities, the absence of credit risk, as there is usually a prepaid payment, discourages service providers from obtaining a complete, and accurate customer information, and the nature of the trade, and the speed of transactions make it difficult to control property or freezing. However, the development of technologies, including the internet, has unquestionable advantages involved and even provides, through online resources, verification of identity, or other duty of surveillance, for the prevention of money laundering. In addition, the reform of June 22, 2010 introduced in Spain the criminal liability of legal persons, and incorporated money laundering together with other crimes to this innovative model of criminal responsibility. Soon after, Organic Law 1/2015, of March 30, modified the hereto barely applied regulation. Itis quite surprising that Organic Law 1/2015 boasts of making a technical improvement, as it incurs obvious contradictions by exempting criminal liability to legal persons for a money laundering, that should not have existed due to the adoptionand effective execution of suitable or adequate compliance programs to prevent it, as well as taking into account to limit the punishment non-serious breaches of supervisory, monitoring, and control duties, when letter b) of the first paragraph of article 31 bis only takes into consideration serious breaches of those duties. Already in 2010, in order to introduce the criminal liability of legal persons, the Spanish Legislator invoked the alleged need to comply with international commitments. However, this model of responsibility was not mandatory, because international agreements normally only require effective, proportionate, and dissuasive sanctions. In addition, managers and executives, who have not adopted an effective compliance program, will be held liable together with the company, given that now all act as police officers. In conclusion, the use of dummy corporations for money laundering is frequent, as it is evidenced by the judgments of theSupreme Court of June 26, 2012, and February 4, 2015, but until recently, the accessory consequences and the doctrine of piercing the corporate veil were sufficient.

More Meaningful Ethics

Firms have exponentially increased their investment in the creation and implementation of ethics and compliance programs over the past fifteen years. The convergence of more robust corporate enforcement actions and more sophisticated industry standards and practices surrounding compliance efforts has created a booming compliance industry with commonly accepted standards and responsibilities. Within these efforts is a formal acknowledgment by the government, industry leaders, and academics that ethics has a role to play in helping to prevent misconduct within firms and that compliance without concern for ethics is insufficient. The reality, however, is that within firms’ efforts to implement effective ethics and compliance programs, compliance is king and ethics is something far less significant. This Essay questions the wisdom of focusing on compliance without an equal focus on ethics. It challenges academics, industry leaders, compliance officers, and inside and external counsel to think critically about how firms might incorporate “More Meaningful Ethics” within their compliance efforts. This Essay argues that firms should implement specific and explicit ethical infrastructures within their compliance programs. In particular, this Essay suggests that firms commit to adopting policies and procedures that (i) protect the dignity of, (ii) promote the flourishing of, and (iii) advance the interests of the various stakeholders of firms as a baseline to be used for establishing the ethics components of their ethics and compliance programs.

Corporate Health Care Enforcement at a Crossroads: Newly Available Data and the Need for Comprehensive False Claims Act Reform

The Department of Justice (“DOJ”) has a long-stated goal of encouraging companies to engage in what the author refers to as “compliant behaviors” – maintenance of an effective pre-existing compliance program, post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct. Substantial DOJ guidance over the past two decades, along with the concrete incentive structure of the United States Sentencing Guidelines, have increasingly made clear to organizations when and how such behaviors will be rewarded in criminal matters. Recently, DOJ has made transparency and clarity regarding the benefit of compliant behaviors a priority in calculating and announcing criminal resolutions. With respect to civil False Claims Act (“FCA”) settlements, however, meaningful formal DOJ guidance on the effect of compliant behavior only arrived in 2019. More significantly, DOJ’s treatment of compliant behavior in civil cases, in contrast to that in the case of criminal resolutions, has appeared inconsistent and certainly opaque. This lack of clear implementation philosophy is particularly problematic in the area of health care, an industry for which the FCA is the primary tool for government action in response to misconduct. While much has been written on the systemic efficiencies – or lack thereof – that DOJ’s enforcement practices bring to the activities of regulated industries, this is the first article to use data to ask whether DOJ has a governing practice with respect to civil settlements, or whether instead its settlement practices fail to match its stated principles. For decades, even as resources devoted by market participants to health care compliance have skyrocketed and DOJ has pressed corporate entities to engage in compliant behaviors, the health care industry and the defense bar have expressed skepticism regarding the actual payoff they might realize by engaging in those behaviors. DOJ’s response has been a series of public statements amounting to, “trust us, they matter.” Until now, the health care industry has been without any mechanism to test those assurances. In response to changes in the tax code, however, DOJ made adjustments in 2018 to its practice of disclosing information regarding FCA settlements – changes which have shaken loose data that provides an opportunity to test DOJ’s claims of rewarding compliant behaviors in civil cases. The author is the first and thus far the only person to have identified and analyzed this newly available data. Examination of this data demonstrates that wide-ranging, structural changes are necessary. The data raises substantial questions about: the quantum of credit given for cooperation; conduct DOJ values in resolving FCA cases; and the degree of consistency in cases settled by U.S. Attorney’s Offices across the country. For example, analysis of the data reveals inconsistent benefits for cooperation. Cases where defendants self-disclosed misconduct or cooperated were often not treated more leniently than cases where defendants did not self-disclose or cooperate, and a review of more than 100 settlements did not find a single instance in which DOJ purported to give an entity a reduction based on its pre-existing compliance program. At the same time, DOJ appears to be greatly rewarding defendants for agreeing to settle – highlighting concerns both with regard to whether DOJ is achieving adequate deterrence and with regard to whether the FCA’s potential penalties are coercing settlements. And the data appears to show significant variation in settlement positions depending on the identity of enforcing DOJ component, with cases handled by DOJ’s Civil Division in Washington, D.C. treated more leniently than cases handled solely by U.S. Attorney’s Offices across the country. With the data now public – and at a moment in time when DOJ is emphasizing transparency and clarity in rewarding compliant behaviors in the resolution of criminal cases – DOJ’s corporate health care enforcement regime is at a crossroads. Without change in this area, DOJ risks undercutting its efforts at encouraging compliant behaviors in one of DOJ’s primary enforcement areas. No longer left in the dark about the impact of compliant behaviors in calculating FCA resolutions, the health care industry may be less likely to continue investing in compliance programs at the same rate, to cooperate with government investigations, and especially to self-disclose misconduct to the government. The analysis reveals that a detailed structure of DOJ’s calculations in FCA settlements, with calculations transparent in each FCA resolution, is needed to accomplish DOJ’s goal of encouraging cooperation and investment in compliance programs, as well as to provide an assurance that like cases are treated alike.

The Italian Guidelines on Antitrust Compliance Programs and the Difficult Goal of Matching Deterrence, Education, and Business Ethics

In 2018, the Italian Competition Authority issued the “Guidelines on antitrust compliance programs”. The Guidelines identify the adoption and implementation of a robust and effective compliance program as a mitigating circumstance in the calculation of fines for anti-competitive violations. Specifically, the Guidelines allow for a reduction of up to 15% of the fine in the event the antitrust compliance program is adopted before the beginning of an investigation (so-called ex ante facto programs) and a more limited reduction, up to 5% of the fine, for compliance programs implemented during the investigation (so-called ex post facto programs). These reductions are applicable to fines imposed as a result of anticompetitive arrangements and abuses of a dominant position under both the European and Italian competition provisions. In this paper we argue that while the decision to incentivize compliance programs is justified by the lack of competition culture and the structure of the Italian industrial sector, the design of the incentive provided for in the Guidelines is wrong. In particular, the Guideines try to protect its most important enforcement tool, i.e. the leniency program, by conditioning the reward for successful compliance programs to the self-reporting to the competition authority. We suggest a different set of incentives that should protect the leniency program while maintaining the interest in adopting a compliance program. We furthermore suggest a change in the Italian fining Guidelines in order to make the incentives for the adoption of ex ante compliance programs more effective, especially for small and medium sized enterprises.