CHAPTER EIGHT – SENTENCING OF ORGANIZATIONS

 

Introductory Commentary

The guidelines and policy statements in this chapter apply when the convicted defendant is an organization.  Organizations can act only through agents and, under federal criminal law, generally are vicariously liable for offenses committed by their agents.  At the same time, individual agents are responsible for their own criminal conduct.  Federal prosecutions of organizations therefore frequently involve individual and organizational co-defendants.  Convicted individual agents of organizations are sentenced in accordance with the guidelines and policy statements in the preceding chapters.  This chapter is designed so that the sanctions imposed upon organizations and their agents, taken together, will provide just punishment, adequate deterrence, and incentives for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct.

This chapter reflects the following general principles: 

First, the court must, whenever practicable, order the organization to remedy any harm caused by the offense.  The resources expended to remedy the harm should not be viewed as punishment, but rather as a means of making victims whole for the harm caused.

Second, if the organization operated primarily for a criminal purpose or primarily by criminal means, the fine should be set sufficiently high to divest the organization of all its assets. 

Third, the fine range for any other organization should be based on the seriousness of the offense and the culpability of the organization.  The seriousness of the offense generally will be reflected by the greatest of the pecuniary gain, the pecuniary loss, or the amount in a guideline offense level fine table.  Culpability generally will be determined by six factors that the sentencing court must consider.  The four factors that increase the ultimate punishment of an organization are:  (i) the involvement in or tolerance of criminal activity; (ii) the prior history of the organization; (iii) the violation of an order; and (iv) the obstruction of justice.  The two factors that mitigate the ultimate punishment of an organization are:  (i) the existence of an effective compliance and ethics program; and (ii) self-reporting, cooperation, or acceptance of responsibility.

Fourth, probation is an appropriate sentence for an organizational defendant when needed to ensure that another sanction will be fully implemented, or to ensure that steps will be taken within the organization to reduce the likelihood of future criminal conduct. 

These guidelines offer incentives to organizations to reduce and ultimately eliminate criminal conduct by providing a structural foundation from which an organization may self-police its own conduct through an effective compliance and ethics program.  The prevention and detection of criminal conduct, as facilitated by an effective compliance and ethics program, will assist an organization in encouraging ethical conduct and in complying fully with all applicable laws.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

 

PART A – GENERAL APPLICATION PRINCIPLES

§8A1.1.     Applicability of Chapter Eight

Commentary

Application Notes:

1.      "Organization" means "a person other than an individual."  18 U.S.C. § 18.  The term includes corporations, partnerships, associations, joint-stock companies, unions, trusts, pension funds, unincorporated organizations, governments and political subdivisions thereof, and non-profit organizations.

2.      The fine guidelines in §§8C2.2 through 8C2.9 apply only to specified types of offenses.  The other provisions of this chapter apply to the sentencing of all organizations for all felony and Class A misdemeanor offenses.  For example, the restitution and probation provisions in Parts B and D of this chapter apply to the sentencing of an organization, even if the fine guidelines in §§8C2.2 through 8C2.9 do not apply.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8A1.2.     Application Instructions – Organizations

 

Commentary

Application Notes:

1.      Determinations under this chapter are to be based upon the facts and information specified in the applicable guideline.  Determinations that reference other chapters are to be made under the standards applicable to determinations under those chapters.

2.      The definitions in the Commentary to §1B1.1 (Application Instructions) and the guidelines and commentary in §§1B1.2 through 1B1.8 apply to determinations under this chapter unless otherwise specified.  The adjustments in Chapter Three, Parts A (Victim-Related Adjustments), B (Role in the Offense), C (Obstruction and Related Adjustments), and E (Acceptance of Responsibility) do not apply.  The provisions of Chapter Six (Sentencing Procedures, Plea Agreements, and Crime Victims' Rights) apply to proceedings in which the defendant is an organization.  Guidelines and policy statements not referenced in this chapter, directly or indirectly, do not apply when the defendant is an organization; e.g., the policy statements in Chapter Seven (Violations of Probation and Supervised Release) do not apply to organizations.

3.      The following are definitions of terms used frequently in this chapter:

Historical Note:  Effective November 1, 1991 (amendment 422); November 1, 1997 (amendment 546); November 1, 2001 (amendment 617); November 1, 2004 (amendment 673); November 1, 2010 (amendment 747); November 1, 2011 (amendment 758); November 1, 2023 (amendment 824).

 

PART B – REMEDYING HARM FROM CRIMINAL CONDUCT, AND EFFECTIVE COMPLIANCE AND ETHICS PROGRAM

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

 

1.      REMEDYING HARM FROM CRIMINAL CONDUCT

Historical Note:  Effective November 1, 2004 (amendment 673).

 

Introductory Commentary

As a general principle, the court should require that the organization take all appropriate steps to provide compensation to victims and otherwise remedy the harm caused or threatened by the offense.  A restitution order or an order of probation requiring restitution can be used to compensate identifiable victims of the offense.  A remedial order or an order of probation requiring community service can be used to reduce or eliminate the harm threatened, or to repair the harm caused by the offense, when that harm or threatened harm would otherwise not be remedied.  An order of notice to victims can be used to notify unidentified victims of the offense.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8B1.1.     Restitution – Organizations

 

Commentary

Background:  Section 3553(a)(7) of title 18, United States Code, requires the court, "in determining the particular sentence to be imposed," to consider "the need to provide restitution to any victims of the offense." Orders of restitution are authorized under 18 U.S.C. §§ 2248, 2259, 2264, 2327, 3663, and 3663A.  For offenses for which an order of restitution is not authorized, restitution may be imposed as a condition of probation.

Historical Note:  Effective November 1, 1991 (amendment 422). Amended effective November 1, 1997 (amendment 571); November 1, 2023 (amendment 824).

§8B1.2.     Remedial Orders – Organizations (Policy Statement)

 

Commentary

Background:  The purposes of a remedial order are to remedy harm that has already occurred and to prevent future harm.  A remedial order requiring corrective action by the organization may be necessary to prevent future injury from the instant offense, e.g., a product recall for a food and drug violation or a clean-up order for an environmental violation.  In some cases in which a remedial order potentially may be appropriate, a governmental regulatory agency, e.g., the Environmental Protection Agency or the Food and Drug Administration, may have authority to order remedial measures.  In such cases, a remedial order by the court may not be necessary.  If a remedial order is entered, it should be coordinated with any administrative or civil actions taken by the appropriate governmental regulatory agency.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8B1.3.     Community Service – Organizations (Policy Statement)

 

Commentary

Background:  An organization can perform community service only by employing its resources or paying its employees or others to do so.  Consequently, an order that an organization perform community service is essentially an indirect monetary sanction, and therefore generally less desirable than a direct monetary sanction.  However, where the convicted organization possesses knowledge, facilities, or skills that uniquely qualify it to repair damage caused by the offense, community service directed at repairing damage may provide an efficient means of remedying harm caused.

In the past, some forms of community service imposed on organizations have not been related to the purposes of sentencing.  Requiring a defendant to endow a chair at a university or to contribute to a local charity would not be consistent with this section unless such community service provided a means for preventive or corrective action directly related to the offense and therefore served one of the purposes of sentencing set forth in 18 U.S.C. § 3553(a).  

Historical Note:  Effective November 1, 1991 (amendment 422).

§8B1.4.     Order of Notice to Victims – Organizations

Historical Note:  Effective November 1, 1991 (amendment 422).

 

2.      EFFECTIVE COMPLIANCE AND ETHICS PROGRAM

Historical Note:  Effective November 1, 2004 (amendment 673). 

§8B2.1.     Effective Compliance and Ethics Program

 

Commentary

Application Notes:

1.      Definitions.—For purposes of this guideline:

2.      Factors to Consider in Meeting Requirements of this Guideline.—

3.      Application of Subsection (b)(2).—High-level personnel and substantial authority personnel of the organization shall be knowledgeable about the content and operation of the compliance and ethics program, shall perform their assigned duties consistent with the exercise of due diligence, and shall promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.

If the specific individual(s) assigned overall responsibility for the compliance and ethics program does not have day-to-day operational responsibility for the program, then the individual(s) with day-to-day operational responsibility for the program typically should, no less than annually, give the governing authority or an appropriate subgroup thereof information on the implementation and effectiveness of the compliance and ethics program.

4.      Application of Subsection (b)(3).—

5.      Application of Subsection (b)(6).—Adequate discipline of individuals responsible for an offense is a necessary component of enforcement; however, the form of discipline that will be appropriate will be case specific.

6.      Application of Subsection (b)(7).—Subsection (b)(7) has two aspects.

First, the organization should respond appropriately to the criminal conduct. The organization should take reasonable steps, as warranted under the circumstances, to remedy the harm resulting from the criminal conduct. These steps may include, where appropriate, providing restitution to identifiable victims, as well as other forms of remediation. Other reasonable steps to respond appropriately to the criminal conduct may include self-reporting and cooperation with authorities.

Second, the organization should act appropriately to prevent further similar criminal conduct, including assessing the compliance and ethics program and making modifications necessary to ensure the program is effective. The steps taken should be consistent with subsections (b)(5) and (c) and may include the use of an outside professional advisor to ensure adequate assessment and implementation of any modifications.

7.      Application of Subsection (c).—To meet the requirements of subsection (c), an organization shall:

Background:  This section sets forth the requirements for an effective compliance and ethics program. This section responds to section 805(a)(5) of the Sarbanes-Oxley Act of 2002, Public Law 107–204, which directed the Commission to review and amend, as appropriate, the guidelines and related policy statements to ensure that the guidelines that apply to organizations in this chapter "are sufficient to deter and punish organizational criminal misconduct."

The requirements set forth in this guideline are intended to achieve reasonable prevention and detection of criminal conduct for which the organization would be vicariously liable. The prior diligence of an organization in seeking to prevent and detect criminal conduct has a direct bearing on the appropriate penalties and probation terms for the organization if it is convicted and sentenced for a criminal offense.

Historical Note:  Effective November 1, 2004 (amendment 673).  Amended effective November 1, 2010 (amendment 744); November 1, 2011 (amendment 758); November 1, 2013 (amendment 778); November 1, 2023 (amendment 824).

 

PART C – FINES

 

1.      DETERMINING THE FINE – CRIMINAL PURPOSE ORGANIZATIONS

§8C1.1.     Determining the Fine – Criminal Purpose Organizations

 

Commentary

Application Note:

1.      "Net assets," as used in this section, means the assets remaining after payment of all legitimate claims against assets by known innocent bona fide creditors.

Background:  This guideline addresses the case in which the court, based upon an examination of the nature and circumstances of the offense and the history and characteristics of the organization, determines that the organization was operated primarily for a criminal purpose (e.g., a front for a scheme that was designed to commit fraud; an organization established to participate in the illegal manufacture, importation, or distribution of a controlled substance) or operated primarily by criminal means (e.g., a hazardous waste disposal business that had no legitimate means of disposing of hazardous waste).  In such a case, the fine shall be set at an amount sufficient to remove all of the organization's net assets.  If the extent of the assets of the organization is unknown, the maximum fine authorized by statute should be imposed, absent innocent bona fide creditors.

Historical Note:  Effective November 1, 1991 (amendment 422).

 

*   *   *   *   *

 

2.      DETERMINING THE FINE – OTHER ORGANIZATIONS

§8C2.1.     Applicability of Fine Guidelines

 

Commentary

Application Notes:

1.      If the Chapter Two offense guideline for a count is listed in subsection (a) or (b) above, and the applicable guideline results in the determination of the offense level by use of one of the listed guidelines, apply the provisions of §§8C2.2 through 8C2.9 to that count.  For example, §§8C2.2 through 8C2.9 apply to an offense under §2K2.1 (an offense guideline listed in subsection (a)), unless the cross reference in that guideline requires the offense level to be determined under an offense guideline section not listed in subsection (a). 

2.      If the Chapter Two offense guideline for a count is not listed in subsection (a) or (b) above, but the applicable guideline results in the determination of the offense level by use of a listed guideline, apply the provisions of §§8C2.2 through 8C2.9 to that count.  For example, where the conduct set forth in a count of conviction ordinarily referenced to §2N2.1 (an offense guideline not listed in subsection (a)) establishes §2B1.1 (Theft, Property Destruction, and Fraud) as the applicable offense guideline (an offense guideline listed in subsection (a)), §§8C2.2 through 8C2.9 would apply because the actual offense level is determined under §2B1.1 (Theft, Property Destruction, and Fraud).

Background:  The fine guidelines of this subpart apply only to offenses covered by the guideline sections set forth in subsection (a) above.  For example, the provisions of §§8C2.2 through 8C2.9 do not apply to counts for which the applicable guideline offense level is determined under Chapter Two, Part Q (Offenses Involving the Environment).  For such cases, §8C2.10 (Determining the Fine for Other Counts) is applicable.

Historical Note: Effective November 1, 1991 (amendment 422). Amended effective November 1, 1992 (amendment 453); November 1, 1993 (amendment 496); November 1, 2001 (amendments 617, 619, and 634); November 1, 2005 (amendment 679); November 1, 2018 (amendment 813).

§8C2.2.     Preliminary Determination of Inability to Pay Fine

 

Commentary

Application Notes:

1.      In a case of a determination under subsection (a), a statement that "the guideline fine range was not determined because it is readily ascertainable that the defendant cannot and is not likely to become able to pay restitution" is recommended.

2.      In a case of a determination under subsection (b), a statement that "no precise determination of the guideline fine range is required because it is readily ascertainable that the defendant cannot and is not likely to become able to pay the minimum of the guideline fine range" is recommended.

Background:  Many organizational defendants lack the ability to pay restitution.  In addition, many organizational defendants who may be able to pay restitution lack the ability to pay the minimum fine called for by §8C2.7(a).  In such cases, a complete determination of the guideline fine range may be a needless exercise.  This section provides for an abbreviated determination of the guideline fine range that can be applied where it is readily ascertainable that the fine within the guideline fine range determined under §8C2.7 (Guideline Fine Range – Organizations) would be reduced under §8C3.3 (Reduction of Fine Based on Inability to Pay).

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C2.3.     Offense Level

 

Commentary

Application Notes:

1.      In determining the offense level under this section, "defendant," as used in Chapter Two, includes any agent of the organization for whose conduct the organization is criminally responsible.

2.      In determining the offense level under this section, apply the provisions of §§1B1.2 through 1B1.8.  Do not apply the adjustments in Chapter Three, Parts A (Victim-Related Adjustments), B (Role in the Offense), C (Obstruction and Related Adjustments), and E (Acceptance of Responsibility).

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2011 (amendment 758).

§8C2.4.     Base Fine

Commentary

Application Notes:

1.      "Pecuniary gain," "pecuniary loss," and "offense" are defined in the Commentary to §8A1.2 (Application Instructions – Organizations). Note that subsections (a)(2) and (a)(3) contain certain limitations as to the use of pecuniary gain and pecuniary loss in determining the base fine. Under subsection (a)(2), the pecuniary gain used to determine the base fine is the pecuniary gain to the organization from the offense. Under subsection (a)(3), the pecuniary loss used to determine the base fine is the pecuniary loss from the offense caused by the organization, to the extent that such loss was caused intentionally, knowingly, or recklessly.

2.      Under 18 U.S.C. § 3571(d), the court is not required to calculate pecuniary loss or pecuniary gain to the extent that determination of loss or gain would unduly complicate or prolong the sentencing process. Nevertheless, the court may need to approximate loss in order to calculate offense levels under Chapter Two. See Commentary to §2B1.1 (Theft, Property Destruction, and Fraud). If loss is approximated for purposes of determining the applicable offense level, the court should use that approximation as the starting point for calculating pecuniary loss under this section.

3.      In a case of an attempted offense or a conspiracy to commit an offense, pecuniary loss and pecuniary gain are to be determined in accordance with the principles stated in §2X1.1 (Attempt, Solicitation, or Conspiracy).

4.      In a case involving multiple participants (i.e., multiple organizations, or the organization and individual(s) unassociated with the organization), the applicable offense level is to be determined without regard to apportionment of the gain from or loss caused by the offense. See §1B1.3 (Relevant Conduct). However, if the base fine is determined under subsections (a)(2) or (a)(3), the court may, as appropriate, apportion gain or loss considering the defendant's relative culpability and other pertinent factors. Note also that under §2R1.1(d)(1), the volume of commerce, which is used in determining a proxy for loss under §8C2.4(a)(3), is limited to the volume of commerce attributable to the defendant.

5.      Special instructions regarding the determination of the base fine are contained in §§2B4.1 (Bribery in Procurement of Bank Loan and Other Commercial Bribery); 2C1.1 (Offering, Giving, Soliciting, or Receiving a Bribe; Extortion Under Color of Official Right; Fraud Involving the Deprivation of the Intangible Right to Honest Services of Public Officials; Conspiracy to Defraud by Interference with Governmental Functions); 2C1.2 (Offering, Giving, Soliciting, or Receiving a Gratuity); 2E5.1 (Offering, Accepting, or Soliciting a Bribe or Gratuity Affecting the Operation of an Employee Welfare or Pension Benefit Plan; Prohibited Payments or Lending of Money by Employer or Agent to Employees, Representatives, or Labor Organizations); and 2R1.1 (Bid-Rigging, Price-Fixing or Market-Allocation Agreements Among Competitors).

Background:  Under this section, the base fine is determined in one of three ways: (1) by the amount, based on the offense level, from the table in subsection (d); (2) by the pecuniary gain to the organization from the offense; and (3) by the pecuniary loss caused by the organization, to the extent that such loss was caused intentionally, knowingly, or recklessly. In certain cases, special instructions for determining the loss or offense level amount apply. As a general rule, the base fine measures the seriousness of the offense. The determinants of the base fine are selected so that, in conjunction with the multipliers derived from the culpability score in §8C2.5 (Culpability Score), they will result in guideline fine ranges appropriate to deter organizational criminal conduct and to provide incentives for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct. In order to deter organizations from seeking to obtain financial reward through criminal conduct, this section provides that, when greatest, pecuniary gain to the organization is used to determine the base fine. In order to ensure that organizations will seek to prevent losses intentionally, knowingly, or recklessly caused by their agents, this section provides that, when greatest, pecuniary loss is used to determine the base fine in such circumstances. Chapter Two provides special instructions for fines that include specific rules for determining the base fine in connection with certain types of offenses in which the calculation of loss or gain is difficult, e.g., price-fixing. For these offenses, the special instructions tailor the base fine to circumstances that occur in connection with such offenses and that generally relate to the magnitude of loss or gain resulting from such offenses.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 1993 (amendment 496); November 1, 1995 (amendment 534); November 1, 2001 (amendment 634); November 1, 2004 (amendments 666 and 673); November 1, 2015 (amendment 791).

§8C2.5.     Culpability Score

 

Commentary

Application Notes:

1.      Definitions.—For purposes of this guideline, "condoned", "criminal adjudication", "similar misconduct", "substantial authority personnel", and "willfully ignorant of the offense" have the meaning given those terms in Application Note 3 of the Commentary to §8A1.2 (Application Instructions – Organizations).

2.      For purposes of subsection (b), "unit of the organization" means any reasonably distinct operational component of the organization.  For example, a large organization may have several large units such as divisions or subsidiaries, as well as many smaller units such as specialized manufacturing, marketing, or accounting operations within these larger units.  For purposes of this definition, all of these types of units are encompassed within the term "unit of the organization."

3.      "High-level personnel of the organization" is defined in the Commentary to §8A1.2 (Application Instructions – Organizations).  With respect to a unit with 200 or more employees, "high-level personnel of a unit of the organization" means agents within the unit who set the policy for or control that unit.  For example, if the managing agent of a unit with 200 employees participated in an offense, three points would be added under subsection (b)(3); if that organization had 1,000 employees and the managing agent of the unit with 200 employees were also within high-level personnel of the organization in its entirety, four points (rather than three) would be added under subsection (b)(2).

4.      Pervasiveness under subsection (b) will be case specific and depend on the number, and degree of responsibility, of individuals within substantial authority personnel who participated in, condoned, or were willfully ignorant of the offense.  Fewer individuals need to be involved for a finding of pervasiveness if those individuals exercised a relatively high degree of authority.  Pervasiveness can occur either within an organization as a whole or within a unit of an organization.  For example, if an offense were committed in an organization with 1,000 employees but the tolerance of the offense was pervasive only within a unit of the organization with 200 employees (and no high-level personnel of the organization participated in, condoned, or was willfully ignorant of the offense), three points would be added under subsection (b)(3).  If, in the same organization, tolerance of the offense was pervasive throughout the organization as a whole, or an individual within high-level personnel of the organization participated in the offense, four points (rather than three) would be added under subsection (b)(2).

5.      A "separately managed line of business," as used in subsections (c) and (d), is a subpart of a for-profit organization that has its own management, has a high degree of autonomy from higher managerial authority, and maintains its own separate books of account.  Corporate subsidiaries and divisions frequently are separately managed lines of business.  Under subsection (c), in determining the prior history of an organization with separately managed lines of business, only the prior conduct or criminal record of the separately managed line of business involved in the instant offense is to be used.  Under subsection (d), in the context of an organization with separately managed lines of business, in making the determination whether a violation of a condition of probation involved engaging in similar misconduct, only the prior misconduct of the separately managed line of business involved in the instant offense is to be considered.

6.      Under subsection (c), in determining the prior history of an organization or separately managed line of business, the conduct of the underlying economic entity shall be considered without regard to its legal structure or ownership.  For example, if two companies merged and became separate divisions and separately managed lines of business within the merged company, each division would retain the prior history of its predecessor company.  If a company reorganized and became a new legal entity, the new company would retain the prior history of the predecessor company.  In contrast, if one company purchased the physical assets but not the ongoing business of another company, the prior history of the company selling the physical assets would not be transferred to the company purchasing the assets.  However, if an organization is acquired by another organization in response to solicitations by appropriate federal government officials, the prior history of the acquired organization shall not be attributed to the acquiring organization.

7.      Under subsections (c)(1)(B) and (c)(2)(B), the civil or administrative adjudication(s) must have occurred within the specified period (ten or five years) of the instant offense.

8.      Adjust the culpability score for the factors listed in subsection (e) whether or not the offense guideline incorporates that factor, or that factor is inherent in the offense.

9.      Subsection (e) applies where the obstruction is committed on behalf of the organization; it does not apply where an individual or individuals have attempted to conceal their misconduct from the organization.  The Commentary to §3C1.1 (Obstructing or Impeding the Administration of Justice) provides guidance regarding the types of conduct that constitute obstruction.

10.    Subsection (f)(2) contemplates that the organization will be allowed a reasonable period of time to conduct an internal investigation.  In addition, no reporting is required by subsection (f)(2) or (f)(3)(C)(iii) if the organization reasonably concluded, based on the information then available, that no offense had been committed.

11.    For purposes of subsection (f)(3)(C)(i), an individual has "direct reporting obligations" to the governing authority or an appropriate subgroup thereof if the individual has express authority to communicate personally to the governing authority or appropriate subgroup thereof (A) promptly on any matter involving criminal conduct or potential criminal conduct, and (B) no less than annually on the implementation and effectiveness of the compliance and ethics program.

12.    "Appropriate governmental authorities," as used in subsections (f) and (g)(1), means the federal or state law enforcement, regulatory, or program officials having jurisdiction over such matter.  To qualify for a reduction under subsection (g)(1), the report to appropriate governmental authorities must be made under the direction of the organization.

13.    To qualify for a reduction under subsection (g)(1) or (g)(2), cooperation must be both timely and thorough.  To be timely, the cooperation must begin essentially at the same time as the organization is officially notified of a criminal investigation.  To be thorough, the cooperation should include the disclosure of all pertinent information known by the organization.  A prime test of whether the organization has disclosed all pertinent information is whether the information is sufficient for law enforcement personnel to identify the nature and extent of the offense and the individual(s) responsible for the criminal conduct.  However, the cooperation to be measured is the cooperation of the organization itself, not the cooperation of individuals within the organization.  If, because of the lack of cooperation of particular individual(s), neither the organization nor law enforcement personnel are able to identify the culpable individual(s) within the organization despite the organization's efforts to cooperate fully, the organization may still be given credit for full cooperation.

14.    Entry of a plea of guilty prior to the commencement of trial combined with truthful admission of involvement in the offense and related conduct ordinarily will constitute significant evidence of affirmative acceptance of responsibility under subsection (g), unless outweighed by conduct of the organization that is inconsistent with such acceptance of responsibility.  This adjustment is not intended to apply to an organization that puts the government to its burden of proof at trial by denying the essential factual elements of guilt, is convicted, and only then admits guilt and expresses remorse.  Conviction by trial, however, does not automatically preclude an organization from consideration for such a reduction.  In rare situations, an organization may clearly demonstrate an acceptance of responsibility for its criminal conduct even though it exercises its constitutional right to a trial.  This may occur, for example, where an organization goes to trial to assert and preserve issues that do not relate to factual guilt (e.g., to make a constitutional challenge to a statute or a challenge to the applicability of a statute to its conduct).  In each such instance, however, a determination that an organization has accepted responsibility will be based primarily upon pretrial statements and conduct.

15.    In making a determination with respect to subsection (g), the court may determine that the chief executive officer or highest ranking employee of an organization should appear at sentencing in order to signify that the organization has clearly demonstrated recognition and affirmative acceptance of responsibility.

Background:  The increased culpability scores under subsection (b) are based on three interrelated principles.  First, an organization is more culpable when individuals who manage the organization or who have substantial discretion in acting for the organization participate in, condone, or are willfully ignorant of criminal conduct.  Second, as organizations become larger and their managements become more professional, participation in, condonation of, or willful ignorance of criminal conduct by such management is increasingly a breach of trust or abuse of position.  Third, as organizations increase in size, the risk of criminal conduct beyond that reflected in the instant offense also increases whenever management's tolerance of that offense is pervasive.  Because of the continuum of sizes of organizations and professionalization of management, subsection (b) gradually increases the culpability score based upon the size of the organization and the level and extent of the substantial authority personnel involvement.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673); November 1, 2006 (amendment 695); November 1, 2010 (amendment 744); November 1, 2023 (amendment 824).

§8C2.6.     Minimum and Maximum Multipliers

 

Commentary

Application Note:

1.      A special instruction for fines in §2R1.1 (Bid-Rigging, Price-Fixing or Market-Allocation Agreements Among Competitors) sets a floor for minimum and maximum multipliers in cases covered by that guideline.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C2.7.     Guideline Fine Range – Organizations

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C2.8.     Determining the Fine Within the Range (Policy Statement)

 

Commentary

Application Notes:

1.      Subsection (a)(2) provides that the court, in setting the fine within the guideline fine range, should consider the organization's role in the offense.  This consideration is particularly appropriate if the guideline fine range does not take the organization's role in the offense into account.  For example, the guideline fine range in an antitrust case does not take into consideration whether the organization was an organizer or leader of the conspiracy.  A higher fine within the guideline fine range ordinarily will be appropriate for an organization that takes a leading role in such an offense.

2.      Subsection (a)(3) provides that the court, in setting the fine within the guideline fine range, should consider any collateral consequences of conviction, including civil obligations arising from the organization's conduct.  As a general rule, collateral consequences that merely make victims whole provide no basis for reducing the fine within the guideline range.  If criminal and civil sanctions are unlikely to make victims whole, this may provide a basis for a higher fine within the guideline fine range.  If punitive collateral sanctions have been or will be imposed on the organization, this may provide a basis for a lower fine within the guideline fine range.

3.      Subsection (a)(4) provides that the court, in setting the fine within the guideline fine range, should consider any nonpecuniary loss caused or threatened by the offense.  To the extent that nonpecuniary loss caused or threatened (e.g., loss of or threat to human life; psychological injury; threat to national security) by the offense is not adequately considered in setting the guideline fine range, this factor provides a basis for a higher fine within the range.  This factor is more likely to be applicable where the guideline fine range is determined by pecuniary loss or gain, rather than by offense level, because the Chapter Two offense levels frequently take actual or threatened nonpecuniary loss into account.

4.      Subsection (a)(6) provides that the court, in setting the fine within the guideline fine range, should consider any prior criminal record of an individual within high-level personnel of the organization or within high-level personnel of a unit of the organization.  Since an individual within high-level personnel either exercises substantial control over the organization or a unit of the organization or has a substantial role in the making of policy within the organization or a unit of the organization, any prior criminal misconduct of such an individual may be relevant to the determination of the appropriate fine for the organization.

5.      Subsection (a)(7) provides that the court, in setting the fine within the guideline fine range, should consider any prior civil or criminal misconduct by the organization other than that counted under §8C2.5(c).  The civil and criminal misconduct counted under §8C2.5(c) increases the guideline fine range.  Civil or criminal misconduct other than that counted under §8C2.5(c) may provide a basis for a higher fine within the range.  In a case involving a pattern of illegality, an upward departure may be warranted.

6.      Subsection (a)(8) provides that the court, in setting the fine within the guideline fine range, should consider any culpability score higher than ten or lower than zero.  As the culpability score increases above ten, this may provide a basis for a higher fine within the range.  Similarly, as the culpability score decreases below zero, this may provide a basis for a lower fine within the range.

7.      Under subsection (b), the court, in determining the fine within the range, may consider any factor that it considered in determining the range.  This allows for courts to differentiate between cases that have the same offense level but differ in seriousness (e.g., two fraud cases at offense level 12, one resulting in a loss of $21,000, the other $40,000).  Similarly, this allows for courts to differentiate between two cases that have the same aggravating factors, but in which those factors vary in their intensity (e.g., two cases with upward adjustments to the culpability score under §8C2.5(c)(2) (prior criminal adjudications within 5 years of the commencement of the instant offense, one involving a single conviction, the other involving two or more convictions).

Background:  Subsection (a) includes factors that the court is required to consider under 18 U.S.C. §§ 3553(a) and 3572(a) as well as additional factors that the Commission has determined may be relevant in a particular case.  A number of factors required for consideration under 18 U.S.C. § 3572(a) (e.g., pecuniary loss, the size of the organization) are used under the fine guidelines in this subpart to determine the fine range, and therefore are not specifically set out again in subsection (a) of this guideline.  In unusual cases, factors listed in this section may provide a basis for departure.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

§8C2.9.     Disgorgement

 

Commentary

Application Note:

1.      This section is designed to ensure that the amount of any gain that has not and will not be taken from the organization for remedial purposes will be added to the fine.  This section typically will apply in cases in which the organization has received gain from an offense but restitution or remedial efforts will not be required because the offense did not result in harm to identifiable victims, e.g., money laundering, obscenity, and regulatory reporting offenses.  Money spent or to be spent to remedy the adverse effects of the offense, e.g., the cost to retrofit defective products, should be considered as disgorged gain.  If the cost of remedial efforts made or to be made by the organization equals or exceeds the gain from the offense, this section will not apply.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C2.10.   Determining the Fine for Other Counts

 

Commentary

Background:  The Commission has not promulgated guidelines governing the setting of fines for counts not covered by §8C2.1 (Applicability of Fine Guidelines).  For such counts, the court should determine the appropriate fine based on the general statutory provisions governing sentencing.  In cases that have a count or counts not covered by the guidelines in addition to a count or counts covered by the guidelines, the court shall apply the fine guidelines for the count(s) covered by the guidelines, and add any additional amount to the fine, as appropriate, for the count(s) not covered by the guidelines.

Historical Note:  Effective November 1, 1991 (amendment 422).

 

*   *   *   *   *

 

3.      IMPLEMENTING THE SENTENCE OF A FINE

§8C3.1.     Imposing a Fine

 

Commentary

Background:  This section sets forth the interaction of the fines or fine ranges determined under this chapter with the maximum fine authorized by statute and any minimum fine required by statute for the count or counts of conviction.  The general statutory provisions governing a sentence of a fine are set forth in 18 U.S.C. § 3571.

When the organization is convicted of multiple counts, the maximum fine authorized by statute may increase.  For example, in the case of an organization convicted of three felony counts related to a $200,000 fraud, the maximum fine authorized by statute will be $500,000 on each count, for an aggregate maximum authorized fine of $1,500,000.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C3.2.     Payment of the Fine – Organizations

 

Commentary

Application Note:

1.      When the court permits other than immediate payment, the period provided for payment shall be the shortest time in which full payment can reasonably be made.  18 U.S.C. § 3572(d).

Historical Note:  Effective November 1, 1991 (amendment 422). Amended effective November 1, 2023 (amendment 824).

§8C3.3.     Reduction of Fine Based on Inability to Pay

 

Commentary

Application Note:

1.      For purposes of this section, an organization is not able to pay the minimum fine if, even with an installment schedule under §8C3.2 (Payment of the Fine – Organizations), the payment of that fine would substantially jeopardize the continued existence of the organization.

Background:  Subsection (a) carries out the requirement in 18 U.S.C. § 3572(b) that the court impose a fine or other monetary penalty only to the extent that such fine or penalty will not impair the ability of the organization to make restitution for the offense; however, this section does not authorize a criminal purpose organization to remain in business in order to pay restitution.

Historical Note:  Effective November 1, 1991 (amendment 422). Amended effective November 1, 2023 (amendment 824).

§8C3.4.     Fines Paid by Owners of Closely Held Organizations

 

Commentary

Application Notes:

1.      For purposes of this section, an organization is closely held, regardless of its size, when relatively few individuals own it.  In order for an organization to be closely held, ownership and management need not completely overlap.

2.      This section does not apply to a fine imposed upon an individual that arises out of offense conduct different from that for which the organization is being sentenced.

Background:  For practical purposes, most closely held organizations are the alter egos of their owner-managers.  In the case of criminal conduct by a closely held corporation, the organization and the culpable individual(s) both may be convicted.  As a general rule in such cases, appropriate punishment may be achieved by offsetting the fine imposed upon the organization by an amount that reflects the percentage ownership interest of the sentenced individuals and the magnitude of the fines imposed upon those individuals.  For example, an organization is owned by five individuals, each of whom has a twenty percent interest; three of the individuals are convicted; and the combined fines imposed on those three equals $100,000.  In this example, the fine imposed upon the organization may be offset by up to 60 percent of their combined fine amounts, i.e., by $60,000.

Historical Note:  Effective November 1, 1991 (amendment 422).

 

*   *   *   *   *

 

4.      DEPARTURES FROM THE GUIDELINE FINE RANGE

 

Introductory Commentary

The statutory provisions governing departures are set forth in 18 U.S.C. § 3553(b).  Departure may be warranted if the court finds "that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described."  This subpart sets forth certain factors that, in connection with certain offenses, may not have been adequately taken into consideration by the guidelines.  In deciding whether departure is warranted, the court should consider the extent to which that factor is adequately taken into consideration by the guidelines and the relative importance or substantiality of that factor in the particular case.

To the extent that any policy statement from Chapter Five, Part K (Departures) is relevant to the organization, a departure from the applicable guideline fine range may be warranted.  Some factors listed in Chapter Five, Part K that are particularly applicable to organizations are listed in this subpart.  Other factors listed in Chapter Five, Part K may be applicable in particular cases.  While this subpart lists factors that the Commission believes may constitute grounds for departure, the list is not exhaustive.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.1.     Substantial Assistance to Authorities – Organizations (Policy Statement)

 

Commentary

Application Note:

1.      Departure under this section is intended for cases in which substantial assistance is provided in the investigation or prosecution of crimes committed by individuals not directly affiliated with the organization or by other organizations.  It is not intended for assistance in the investigation or prosecution of the agents of the organization responsible for the offense for which the organization is being sentenced.

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.2.     Risk of Death or Bodily Injury (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.3.     Threat to National Security (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.4.     Threat to the Environment (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.5.     Threat to a Market (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.6.     Official Corruption (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.7.     Public Entity (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.8.     Members or Beneficiaries of the Organization as Victims (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.9.     Remedial Costs that Greatly Exceed Gain (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

§8C4.10.   Mandatory Programs to Prevent and Detect Violations of Law (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

§8C4.11.   Exceptional Organizational Culpability (Policy Statement)

Historical Note:  Effective November 1, 1991 (amendment 422).

 

PART D – ORGANIZATIONAL PROBATION

 

Introductory Commentary

Section 8D1.1 sets forth the circumstances under which a sentence to a term of probation is required.  Sections 8D1.2 through 8D1.4, and 8F1.1, address the length of the probation term, conditions of probation, and violations of probation conditions.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

§8D1.1.     Imposition of Probation – Organizations

 

Commentary

Background:  Under 18 U.S.C. § 3561(a), an organization may be sentenced to a term of probation.  Under  18 U.S.C. § 3551(c), imposition of a term of probation is required if the sentence imposed upon the organization does not include a fine.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673).

§8D1.2.     Term of Probation – Organizations

 

Commentary

Application Note:

1.      Within the limits set by the guidelines, the term of probation should be sufficient, but not more than necessary, to accomplish the court's specific objectives in imposing the term of probation. The terms of probation set forth in this section are those provided in 18 U.S.C. § 3561(c).

Historical Note:  Effective November 1, 1991 (amendment 422). Amended effective November 1, 2013 (amendment 778).

§8D1.3.     Conditions of Probation – Organizations

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 1997 (amendment 569); November 1, 2009 (amendment 733).

§8D1.4.     Recommended Conditions of Probation – Organizations (Policy Statement)

 

Commentary

Application Note:

1.      In determining the conditions to be imposed when probation is ordered under §8D1.1, the court should consider the views of any governmental regulatory body that oversees conduct of the organization relating to the instant offense.  To assess the efficacy of a compliance and ethics program submitted by the organization, the court may employ appropriate experts who shall be afforded access to all material possessed by the organization that is necessary for a comprehensive assessment of the proposed program.  The court should approve any program that appears reasonably calculated to prevent and detect criminal conduct, as long as it is consistent with §8B2.1 (Effective Compliance and Ethics Program), and any applicable statutory and regulatory requirements.

Periodic reports submitted in accordance with subsection (b)(3) should be provided to any governmental regulatory body that oversees conduct of the organization relating to the instant offense.

Historical Note:  Effective November 1, 1991 (amendment 422).  Amended effective November 1, 2004 (amendment 673); November 1, 2010 (amendment 744).

§8D1.5. [Deleted]

Historical Note: Section 8D1.5 (Violations of Conditions of Probation – Organizations (Policy Statement)), effective November 1, 1991 (amendment 422), was moved to §8F1.1 effective November 1, 2004 (amendment 673).

 

PART E – SPECIAL ASSESSMENTS, FORFEITURES, AND COSTS

§8E1.1.     Special Assessments – Organizations

Commentary

Application Notes:

1.      This guideline applies if the defendant is an organization.  It does not apply if the defendant is an individual.  See §5E1.3 for special assessments applicable to individuals.

2.      The following special assessments are provided by statute (see 18 U.S.C. § 3013):

3.      A special assessment is required by statute for each count of conviction.

Background:  Section 3013 of title 18, United States Code, added by The Victims of Crimes Act of 1984, Pub. L. No. 98–473, Title II, Chap. XIV, requires courts to impose special assessments on convicted defendants for the purpose of funding the Crime Victims Fund established by the same legislation.

Historical Note:  Effective November 1, 1991 (amendment 422). Amended effective November 1, 1997 (amendment 573); November 1, 2023 (amendment 824).

§8E1.2.     Forfeiture – Organizations

Historical Note:  Effective November 1, 1991 (amendment 422).

§8E1.3.     Assessment of Costs – Organizations

Historical Note:  Effective November 1, 1991 (amendment 422).

 

PART F – VIOLATIONS OF PROBATION – ORGANIZATIONS

Historical Note: Effective November 1, 2004 (amendment 673).

§8F1.1.     Violations of Conditions of Probation – Organizations (Policy Statement)

 

Commentary

Application Notes:

1.      Appointment of Master or Trustee.—In the event of repeated violations of conditions of probation, the appointment of a master or trustee may be appropriate to ensure compliance with court orders.

2.      Conditions of Probation.—Mandatory and recommended conditions of probation are specified in §§8D1.3 (Conditions of Probation – Organizations) and 8D1.4 (Recommended Conditions of Probation – Organizations).

Historical Note: Effective November 1, 2004 (amendment 673).