Sentencing Guideline Amendments Proposed
Also
New Penalties Require Revisions
In Antitrust Compliance Programs
by Steven John Fellman
NATO Washington Counsel
Legislation that will
significantly increase the penalties for violation of
the federal antitrust laws was signed
by President Bush June 22.
Under the newly enacted
Standards Development Organization Advancement Act, individuals
convicted of a criminal antitrust
violation will be guilty of a felony and subject to a
jail sentence of up to 10 years. The new legislation
also increases
individual fines and corporate fines. Fines for individuals
are increased from $100,000 to a maximum of $1 million
per offense. Fines for corporations are increased from
a maximum of $1 million to a maximum of $100 million
per offense. Theatre owners must make sure that their
practices
do not violate antitrust requirements.
Around the time this
new legislation was passed, the U.S. Sentencing Commission
formally proposed amendments
to the
Organizational Sentencing Guidelines. These guidelines
direct judges in deciding what penalties to impose
for corporate criminal law violations, such as antitrust
violations. The amendments will be effective Nov. 1
unless
Congress
acts to modify or disapprove them. Again, these revised
guidelines are of importance to theatre owners and
NATO.
Under the Federal Sentencing
Guidelines for organizations, where a corporation or
trade association has been found
to have engaged in criminal activity, the court will,
before imposing a sentence, look to whether or not
the corporation
or association has established an effective legal
compliance and corporate ethics program. An effective
compliance
and ethics program promotes an organizational culture
that
encourages ethical conduct and includes a commitment
to compliance with the law. The revisions to the
Federal Sentencing
Guidelines for Organizations require that corporate
compliance and ethics programs meet certain criteria:
1. The organization should
establish standards and procedures designed to prevent
and detect criminal
conduct. This
means that theatre owners should have an antitrust
compliance program.
2. Members of the board
of directors and officers of the organization should
take a leadership positioning
establishing
the content and operation of the compliance program.
The program compliance officer must be empowered
to
implement the program.
3. The organization must
take steps to prevent any individual who is involved
with past illegal
activity
from having
any substantial authority within the company
or association.
4. The organization must
have a training program to teach officers, directors,
top executives,
middle-level executives
and others about the requirements of the
corporate compliance and ethics program. It is not sufficient
that only officers
and directors be trained. All employees who
have the
potential of exposing the corporation or
association
to jeopardy
must also be trained. For theatre owners,
all those who negotiate film terms should have
antitrust training.
5. The organization must
establish a means of monitoring the effectiveness of
the compliance
and ethics
program. Monitoring should include a periodic
audit, publicizing
the nature of the program, and a system
for encouraging
whistleblowers to come forth without fear
of retaliation.
6. The organization must
actively promote and enforce the program. If the organization
finds
that employees
have
engaged in criminal conduct, those employees
must be disciplined. If the organization
finds that
supervisors have failed
to take reasonable steps to prevent and
detect criminal conduct, those supervisors
must
be disciplined.
7. Once criminal conduct
has been detected, organizations should take immediate
steps
to stop the criminal
conduct and prevent further criminal
conduct.
Does your company have
a compliance program that meets these criteria?
If not, you
may not meet
the requirements
of the new Federal Sentencing Guidelines.
You may be exposing yourself to significant
liability
in
the event
that your
company or organization is found
to be engaged in criminal conduct such
as an
antitrust
violation. 
