Pre-acquisition due diligence and post-acquisition compliance integration are crucial to helping companies in the context of criminal investigations triggered by offenses committed by company associates.
Multinational companies looking for international best practices on how to structure well-designed and effective compliance programs can find valuable input in the updated version of the U.S. Department of Justice (“DOJ“) guidance on “Evaluation of Corporate Compliance Programs” (“Guidance“), published on June 1, 2020.
The Guidance, among other issues, covers mitigating compliance risks in the context of M&A operations, confirming the pivotal role of pre-acquisition due diligence and introducing the concept of providing an explanation for why it was not or could not have been completed. Today, however, due diligence is no longer the only standard of compliance for M&A deals.
The DOJ goes a step further in comparison to the previous versions of the Guidance by stating that a well-designed compliance program should include a “process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls,” as well as post-acquisition audits.
In other words, M&A offers an opportunity to promote corporate compliance and deal with critical issues identified during due diligence.
These actions are essential to meeting the DOJ’s expectations, but additionally, in an era when global compliance programs are an increasingly important tool for mitigating the risks to which multinational companies are exposed, they constitute compliance best practices to be followed regardless of applicable law.