On April 5, 2016, the Department of Justice issued The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance (Guidance). The Foreign Corrupt Practices Act (FCPA) criminalizes acts of bribery and accounting fraud. The Guidance applies only to the Fraud Section’s FCPA Unit. The Criminal Division, United States Attorneys’ Offices, other agencies and other arms of the DOJ are not involved. The Guidance is designed to increase transparency in the DOJ’s efforts to enhance detection and prosecution of both individuals and corporations.
At the outset the Guidance indicates three steps to enhanced enforcement of the FCPA. First, the Fraud Section increased its prosecuting ranks by 50%, and the FBI has three new squads dedicated to FCPA investigations and prosecutions. Second, the DOJ has strengthened international relationships and cooperation with foreign counterparts to share information and hold wrongdoers accountable. Leads are readily shared, and the Guidance points to many specific prosecutions as examples. Third, the Guidance describes a one-year Pilot Program designed to motivate individuals and companies to self-report FCPA violations, fully cooperate, and remediate compliance programs where appropriate.
The goal of increased enforcement is meant to go hand in hand with informing companies of the exact requirements to obtain mitigation credit. Taken together, these requirements -- self-reporting misconduct, full cooperation with the Fraud Unit, and remediation -- should result in a known benefit. However, a company can only gain mitigation credit if it discloses everything regarding the individuals involved. In every event, companies will know that full cooperation still results in disgorgement of all profits associated with the FCPA violation.
The bulk of the Guidance sets forth what is required for participation in the Pilot Program -- the standards for what constitute voluntary self-disclosure, cooperation, and remediation. If an individual or company is compliant, then the Guidance explains the mitigation that the Fraud Unit will allow. The Pilot Program increases transparency in: (1) the type of disposition; (2) the extent of fine reduction; and (3) the need for a monitor, if any. Fully compliant companies might receive benefit in all three categories.
The potential for prosecution is increasing and the consequences are potentially devastating, but it is now possible to understand where an individual or company stands relative to enforcement and potential mitigation, up to and including a potential declination of prosecution. The Guidance is an invaluable resource which, in addition to a robust, well-funded, and independent compliance program with teeth, will assist any company or individual facing the dilemma of an FCPA violation.