Ethics and Compliance Consulting: Developing a Compliance Program under a Non-Prosecution Agreement or Deferred Prosecution Agreement

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Navigating the complexities of legal agreements such as Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) requires a robust approach to compliance. This is where Ethics and Compliance Consulting becomes crucial. Companies facing allegations of misconduct need to develop and implement effective compliance programs to meet the stringent requirements set forth by these agreements. Ethics and Compliance Consulting provides the expertise and guidance necessary to create a comprehensive compliance framework, ensuring that businesses not only adhere to legal standards but also foster a culture of integrity and accountability.

Landing in the claws of justice for white-collar crimes is a precarious situation for any corporate entity. In addition to paying hefty fines or even facing the risk of business closure, a company’s brand image is put on the line. Even worse is the fact that crimes of employees can incriminate a company.

Fortunately, the Department of Justice (DOJ) has lenient measures to help companies facing white-collar crime charges salvage their image while deterring future crimes. This involves entering into agreements that keep a company from going to trial as long as it adheres to specific provisions.

There are two agreements: the deferred prosecution agreement (DPA) and the non-prosecution agreement (NPA). Under DPA, the DOJ files a charge against the company but does not proceed to trial on the condition that they admit to the misconduct and give facts enough to support an indictment. In return, the company must adhere to specific minimum provisions as outlined by the DOJ.

On the other hand, a non-prosecution agreement, as the name suggests, does not involve the filing of charges. Instead, the DOJ and the company make a letter agreement. But again, the entity must abide by the provisions set by the judicial officials.     

Over the recent years, the government has issued a high number of NPAs and DPAs to corporate entities. Though at first glance, one may consider the agreements as lenient measures that release companies from criminal responsibility, these programs go a long way in deterring future white-collar crimes both in the accused companies and others. This is because other companies can refer to the NPAs and DPAs to step up their compliance programs. This article explores how to develop a successful compliance program under the provisions of an NPA or DPA, leveraging the insights and strategies offered by Ethics and Compliance Consulting.

Ethics and Compliance Consulting

As much as the risk of facing white-collar crime charges is ever-present, it always pays to have an ethics and compliance consulting firm on your service providers list. Among other things, the consultants liaise with your in-house compliance and corporate executives to ensure the company complies with established policies and regulations in your industry. As a result, you get to reduce risks, safeguard your reputation, and avoid consequential costs. 

In addition to aligning your company activities and materials with the required regulation standards, Ethics and Compliance Consulting also help perform regular audits. An audit tests an organization’s compliance maturity and spots areas that need improvement or changes.

On the same note, they provide non-prosecution agreement (NPA) compliance consulting and deferred prosecution agreement (DPA) compliance consulting to keep your internal compliance teams abreast with new provisions. Overall they help step up your compliance programs and deter future crimes. 

What Are the Differences Between A Deferred Prosecution Agreement and A Non-Prosecution Agreement?

We have already noted the main difference between DPAs and NPAs. A DPA involves pleading guilty to a charge and availing facts about the wrongdoing in return for exemption from prosecution. On the other hand, an NPA involves signing a letter agreement without legal proceedings. This means the DOJ does not obligate the company to admit guilt to the misconduct as no charge is initiated. 

Other notable differences between the two agreements include;

Judicial approval

Since DPAs are filed in the federal court, they require approval by the judges. On the contrary, non-prosecution agreements do not proceed to the court; hence, they are exempted from judicial hearing and approval. 

Potential reputation damage

With a DPA, a company must admit guilt over the charged misconduct. This places the company in a precarious situation as the judge may or may not approve the agreement. Failure to approve the DPA would lead to a trial, thereby exposing the company to public disgrace. This can permanently damage the company’s image as they would have already admitted guilt. On the other hand, an NPA does not expose the company as the agreement is reached without the court process.

Judicial costs

Under DPA, an entity will have to foot the pre-trial process’s legal fees. However, a non-prosecution agreement excludes a company from the costs associated with a legal process. 

Monitoring official

Under DPA, the prosecution requires a company to appoint a monitoring official to ensure you adhere to the provisions set in the agreement. The official must remain independent from the management but shares information with other company compliance units, like the internal audit. On the other hand, a non-prosecution agreement does not obligate the company to appoint a monitoring official. 

Essentially, deferred prosecution agreements are stricter than non-prosecution agreements. This explains why most companies prefer the latter to the former.

Similarities Between Deferred Prosecution Agreement and Non-Prosecution Agreement

As much as the two agreements have extensive distinguishing features, they share similarities on many other fronts. Whether a company gets a DPA or an NPA, they;

  1. Avoid going to trial and the possible criminal punishment

  2. Must enact compliance programs

  3. Are able to step up their compliance policies and tighten controls to deter future crimes

  4. Must pay fines and any restitution payments involved

Common Compliance Standards

The DOJ prosecutors issue compliance standards on a case-to-case basis. Meaning that a company will be required to adhere to specific provisions, depending on the areas of weakness spotlighted by the wrongdoing. However, based on previous agreements, common compliance standards have involved;

  1. Tighter corporate policy – A company will be required to review and implement a tighter corporate policy to ensure adherence to the industry’s policies and procedures.

  2. Risk-based assessments – This standard requires a company to perform periodic/annual risk assessments to analyze its compliance policies’ effectiveness.

  3. Senior-level support – This provision requires the management to support the regulations and ensure they’re implemented as they should and strictly followed.

  4. Internal controls – This standard is mainly implemented in cases where the wrongdoing resulted from weak internal controls. The company is required to implement tighter controls in its financial and accounting procedures.

In Summary

The benefits of implementing NPA and DPA compliance programs run deep. DOJ prosecutors save on time and monetary resources that would be involved in complete trials. Admission of guilt also guarantees that the government receives the associated fines, which leads to more income. On the other hand, companies that enter into a deferred or non-prosecution agreement can protect their brand image and save on a full trial’s legal costs. Implementation of the provisions also helps them tighten their compliance policies and company procedures to deter future crimes. In a nutshell, DPAs and NPAs are a win-win for all parties involved.

If you need an ethics and compliance consulting firm, then you’re in the right place. At Riddle Compliance, we provide innovative compliance solutions to support implementation of NPAs and DPAs for growing organizations requiring regulatory guidance and support. Kindly contact us today and explain your regulatory compliance challenges in more detail!

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