AMENDMENT 422
The Guidelines Manual is amended by inserting an additional chapter containing guidelines, policy statements, and accompanying commentary as Chapter Eight (Sentencing of Organizations).
Section 2B4.1 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use the greatest of: (A) the value of the unlawful payment; (B) the value of the benefit received or to be received in return for the unlawful payment; or (C) the consequential damages resulting from the unlawful payment.".
Section 2C1.1 is amended by inserting the following additional subsection:
"(d) Special Instruction for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use the greatest of: (A) the value of the unlawful payment; (B) the value of the benefit received or to be received in return for the unlawful payment; or (C) the consequential damages resulting from the unlawful payment.".
Section 2C1.2 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use the value of the unlawful payment.".
Section 2E5.1 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use the greatest of: (A) the value of the unlawful payment; (B) if a bribe, the value of the benefit received or to be received in return for the unlawful payment; or (C) if a bribe, the consequential damages resulting from the unlawful payment.".
Section 2E5.6 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use the greatest of: (A) the value of the unlawful payment; (B) if a bribe, the value of the benefit received or to be received in return for the unlawful payment; or (C) if a bribe, the consequential damages resulting from the unlawful payment.".
Section 2R1.1 is amended by inserting the following additional subsection:
"(d) Special Instructions for Fines - Organizations
(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base Fine), use 20 percent of the volume of affected commerce.
(2) When applying §8C2.6 (Minimum and Maximum Multipliers), neither the minimum nor maximum multiplier shall be less than 0.75.
(3) In a bid-rigging case in which the organization submitted one or more complementary bids, use as the organization’s volume of commerce the greater of (A) the volume of commerce done by the organization in the goods or services that were affected by the violation, or (B) the largest contract on which the organization submitted a complementary bid in connection with the bid-rigging conspiracy.".
The Commentary to §2R1.1 captioned "Application Notes" is amended by deleting:
"3. In setting the fine for an organization, the court should consider whether the organization encouraged or took steps to prevent the violation, whether high-level management was aware of the violation, and whether the organization previously engaged in antitrust violations.",
and inserting in lieu thereof:
"3. The fine for an organization is determined by applying Chapter Eight (Sentencing of Organizations). In selecting a fine for an organization within the guideline fine range, the court should consider both the gain to the organization from the offense and the loss caused by the organization. It is estimated that the average gain from price-fixing is 10 percent of the selling price. The loss from price-fixing exceeds the gain because, among other things, injury is inflicted upon consumers who are unable or for other reasons do not buy the product at the higher prices. Because the loss from price-fixing exceeds the gain, subsection (d)(1) provides that 20 percent of the volume of affected commerce is to be used in lieu of the pecuniary loss under §8C2.4(a)(3). The purpose for specifying a percent of the volume of commerce is to avoid the time and expense that would be required for the court to determine the actual gain or loss. In cases in which the actual monopoly overcharge appears to be either substantially more or substantially less than 10 percent, this factor should be considered in setting the fine within the guideline fine range.".
The Commentary to §2R1.1 captioned "Background" is amended by deleting the last paragraph as follows:
" Substantial fines are an essential part of the sanction. It is estimated that the average additional profit attributable to price fixing is 10 percent of the selling price. The Commission has specified that a fine from two to five times that amount be imposed on organizational defendants as a deterrent because of the difficulty in identifying violators. Additional monetary penalties can be provided through private treble damage actions. A lower fine is specified for individuals. The Commission believes that most antitrust defendants have the resources and earning capacity to pay these fines, at least over time. The statutory maximum fine is $250,000 for individuals and $1,000,000 for organizations, but is increased when there are convictions on multiple counts.",
and inserting in lieu thereof:
" Substantial fines are an essential part of the sentence. For an individual, the guideline fine range is from one to five percent of the volume of commerce, but not less than $20,000. For an organization, the guideline fine range is determined under Chapter Eight (Sentencing of Organizations), but pursuant to subsection (d)(2), the minimum multiplier is at least 0.75. This multiplier, which requires a minimum fine of 15 percent of the volume of commerce for the least serious case, was selected to provide an effective deterrent to antitrust offenses. At the same time, this minimum multiplier maintains incentives for desired organizational behavior. Because the Department of Justice has a well-established amnesty program for organizations that self-report antitrust offenses, no lower minimum multiplier is needed as an incentive for self-reporting. A minimum multiplier of at least 0.75 ensures that fines imposed in antitrust cases will exceed the average monopoly overcharge.
The Commission believes that most antitrust defendants have the resources and earning capacity to pay the fines called for by this guideline, at least over time on an installment basis. The statutory maximum fine is $350,000 for individuals and $10,000,000 for organizations, but is increased when there are convictions on multiple counts.".
Section 2S1.1 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the applicable amount from the table in subsection (d) of §8C2.4 (Base Fine), use:
(A) the greater of $250,000 or 100 percent of the value of the funds if subsections (a)(1) and (b)(1) are used to determine the offense level; or
(B) the greater of $200,000 or 70 percent of the value of the funds if subsections (a)(2) and (b)(1) are used to determine the offense level; or
(C) the greater of $200,000 or 70 percent of the value of the funds if subsection (a)(1) but not (b)(1) is used to determine the offense level; or
(D) the greater of $150,000 or 50 percent of the value of the funds if subsection (a)(2) but not (b)(1) is used to determine the offense level.".
Section 2S1.2 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the applicable amount from the table in subsection (d) of §8C2.4 (Base Fine), use:
(A) the greater of $175,000 or 60 percent of the value of the funds if subsection (b)(1)(A) is used to determine the offense level; or
(B) the greater of $150,000 or 50 percent of the value of the funds if subsection (b)(1)(B) is used to determine the offense level.".
Section 2S1.3 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the applicable amount from the table in subsection (d) of §8C2.4 (Base Fine), use:
(A) the greater of $125,000 or 30 percent of the value of the funds if subsections (a)(1) and (b)(1) are used to determine the offense level; or
(B) the greater of $50,000 or 20 percent of the value of the funds if subsection (a)(1) but not (b)(1) are used to determine the offense level.".
Section 2S1.4 is amended by inserting the following additional subsection:
"(c) Special Instruction for Fines - Organizations
(1) In lieu of the applicable amount from the table in subsection (d) of §8C2.4 (Base Fine), use:
(A) the greater of $50,000 or 20 percent of the value of the funds if subsection (b)(1) or (b)(2) is used to determine the offense level; or
(B) the greater of $15,000 or 10 percent of the value of the funds, otherwise.".
Reason for Amendment: This amendment adds guidelines and policy statements to address the sentencing of organizational defendants.
Effective Date: The effective date of this amendment is November 1, 1991.