Federal Sentencing Guidelines Amendments Part VI: Remediation Efforts and Reporting Obligations for Effective Compliance and Ethics Programs of Organizations

Ed. Note: On November 1, the U.S. Sentencing Commission’s 2010 Amendments to the federal Sentencing Guidelines went into effect, along with a temporary, emergency amendment to implement Section 8 of the Fair Sentencing Act. On the whole, the amendments reflect a reduction in federal criminal sentences and provide the sentencing judge with additional discretion. We have been posting analyses of some of the more important changes to the Guidelines. The Sentencing Commission’s reader-friendly guide to the 2010 amendments is available here.

This amendment clarifies the remediation efforts required for effective compliance and ethics programs used by organizations. The Guidelines now suggest that defendant organizations should provide restitution and other forms of remediation, self-report, and cooperate with authorities. The organization should also ensure the program is effective, perhaps by including the use of an outside professional advisor.

The amendment also creates a limited exception to the general prohibition against applying a 3-level decrease for having a program when high-level personnel are involved in the offense. The organization may receive the decrease if:

1. The people responsible for the compliance and ethics program have direct reporting obligations to the board;

2. The program detected the offense early;

3. The organization promptly reported the offense to the authorities; and
4. No one with operational responsibility for the compliance and ethics program participated in, condoned, or was willfully ignorant of the offense.