CCO and Criminal Cartel Compliance Programs (Part II of III) | Michael Volkov


Compliance officers have a lot of things to do and risks to manage. CCOs have a unique mission and set of skills that must be applied whenever necessary. While I’m not trying to increase the CCO’s workload (and forgive me if I am), CCOs should be responsible for designing and implementing an effective legal compliance program. antitrust.

For many years, antitrust compliance was the sole domain of corporate counsel. This trend has developed due to the need for legal analysis and understanding of civil antitrust issues – mergers, civil enforcement of anti-competitive behavior under Section 1 of the Sherman Act or conduct of monopolization under of section 2 of the Sherman Act.

Criminal enforcement of antitrust laws is, however, subject to a per se rule under Section 1 of the Sherman Act. In short, Section 1 authorizes criminal prosecution of businesses and individuals for agreements between competitors to fix prices, rig bids, or allocate territory and/or customers. This last sentence covers a whole variety of criminal patterns. The boundary between permitted and illegal activities involving competitors is well defined. Of course, there are situations where arguments can be made, but in almost all cases the violations of Article 1 per se are clear. That’s why CCOs must take responsibility in this area – CCOs know how to design and implement compliance programs to prohibit illegal activities – whether it’s paying bribes, violating sanctions or to fix prices.

CCOs receive comprehensive advice from the Justice Department’s Antitrust Division on effective antitrust compliance programs. The requirements are well known to VACs; they are similar to those of other compliance programs. Of course, the risks are different, but the means to mitigate the risks are the same as in other specific compliance programs.

Organizations must consider the increased risk of execution. The DOJ’s Antitrust Division is poised to step up enforcement of criminal laws. The Antitrust Division has for years successfully prosecuted companies and individuals for cartels involving automotive suppliers, currency traders, generic pharmaceuticals, air freight companies, video displays, electronic capacitors and various other industries. . Over the past two years, criminal repression has decreased. This is very likely to change over the next few years – the Antitrust Division is being reinvigorated under the leadership of Assistant Attorney General Jonathan Kanter, who has committed to new initiatives, additional resources and a new approach to enforcement and promoting competition.

The Antitrust Division has taken aggressive criminal action against companies that set wages and enter into no-poach agreements in affected labor markets. The Antitrust Division has warned the companies that it plans to pursue criminal charges in this area and it has kept its word. Other cases are expected.

In this age of aggressive antitrust enforcement, CCOs and in-house counsel must coordinate compliance efforts. CCOs must take care to detect and prevent criminal offenses resulting from illegal agreements with competitors to restrict competition. The in-house counsel should take the lead on potential civil issues and enforcement risks arising from mergers and other potential anti-competitive agreements.

CCOs should devote energy to conducting a meaningful risk assessment, adopting or revising policies and procedures, regularly training relevant leaders and staff, monitoring compliance overall and audit/testing of the compliance program. Illegal collusion can occur in a variety of circumstances, and with the ease of communications between individuals on phones and computers, the risk of illegal agreements between competitors is high. CCOs should recognize this significant risk and prioritize resources and time over other risks such as corruption, sanctions, data privacy, anti-money laundering, and fraud.

While companies groan and groan when they are the subject of an FCPA investigation, believe me, a criminal antitrust investigation poses serious risks to the organization, requires long and intense internal investigations that involve a variety of risks United States and foreign enforcement agencies. Organizations must balance these consequences with reasonable expense and careful attention to antitrust compliance programs aimed at preventing antitrust violations from occurring in the first place.

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