A Stark Warning from the DOJ to Consider AI risks in your Corporate Compliance Program

Background:

On March 7, 2024, Deputy Attorney General, Lisa Monaco publicly announced her directive to the Criminal Division of the US Department of Justice (“DOJ”) to incorporate assessments of the risks associated with artificial intelligence (“AI”) into its corporate compliance programs (“Evaluation Guidance”).¹  Her directive follows on recent comments, noting that the acceleration of AI represents “the most transformational technology we’ve confronted yet . . . It has the potential to be an indispensable tool to help identify, disrupt, and deter criminals, terrorists, and hostile nation-states from doing harm . . . Yet for all the promise it offers, AI is also accelerating risks to our collective security.” ²

The Evaluation Guidance:

The DOJ’s Evaluation Guidance sets out factors prosecutors should address when evaluating the compliance programs of corporations confronting a criminal resolution,³ providing direction and input about how to make informed decisions as to whether, and to what extent, a corporation’s compliance program was effective at the time of an offense, and is effective at the time the DOJ decides whether or not to take enforcement action.

A compliance program is a set of policies, procedures, and activities that an organization implements to prevent and detect violations of legal and ethical standards that could lead to financial penalties, legal liabilities, reputational harm, and other negative consequences.

The existence, implementation, and effectiveness of a compliance program is one of the many factors that prosecutors consider when determining the appropriate: (a) form of any enforcement action; (b) monetary penalty, if any; and (c) compliance obligations contained in any corporate criminal resolution (e.g., monitorship or reporting obligations).

The Evaluation Guidance requires prosecutors to ask three fundamental questions:

1. Is the corporation’s compliance program well designed?
2. Is the program being applied earnestly and in good faith? In other words, is the program adequately resourced and empowered to function effectively?
3. Does the corporation’s compliance program work in practice?

AI-Specific Updates to the Evaluation Guidance:

Deputy Attorney General Monaco’s directive requires that prosecutors consider risks associated with AI when answering the above three questions as part of evaluating the effectiveness of a corporation’s compliance program. In doing so, Deputy Attorney General Monaco instructed the “the Justice Department to anticipate the impact of AI on our criminal justice system, on competition, and on our national security.” She noted that while AI holds great promise, it “is also accelerating risks to our collective security.”

The direction should be interpreted by corporations as a clear warning: ensure that your corporation’s compliance program considers the risks associated with AI, or otherwise face a greater chance of the DOJ taking enforcement action and heightened associated penalties.

The Broader Context:

The DOJ’s crack down on the criminal use of AI has been widely publicized. However, this was not the result of a policy change. It has been part of a broader response to President Biden’s landmark AI Executive Order, made in October 2023, that advanced a coordinated, federal government-wide approach toward the safe and responsible development of AI. 

The Federal Trade Commission and United States Patent and Trademark Office have already responded to President Biden’s landmark AI Executive Order. As covered in our prior Tech Talk blog post, in the first quarter of 2024, the:

• Federal Trade Commission announced the issue of compulsory production orders to five major technology companies that recently completed multibillion dollar investments in generative AI; and
• United States Patent and Trademark Office announced the publication of inventorship guidance and examples for AI-assisted inventions.

The direction from Deputy Attorney General Monaco appears to be only the first step in the DOJ’s response.

Stay tuned for more.

Footnotes:

¹ Deputy Attorney General Lisa Monaco Delivers Keynote Remarks at the American Bar Association’s 39th National Institute on White Collar Crime, March 7, 2024, San Francisco, CA.

²  Deputy Attorney General Lisa O. Monaco Delivers Remarks at the University of Oxford on the Promise and Peril of AI, February 14, 2024, Oxford, United Kingdom.

³  A corporate criminal resolution is a term that refers to the various ways the DOJ can enforce federal laws other than by way of criminal prosecution, including: (a) deferred prosecution agreements; (b) non-prosecution agreements; (c) plea agreements; and (d) declinations.