Just a week after the U.S. Department of Justice (DOJ) introduced its new Compliance Counsel, and just a month after the DOJ issued the “Yates memo,” it is now being reported that the DOJ is considering a new policy that would offer corporations leniency if they voluntarily disclose violations of the U.S. Foreign Corrupt Practices Act (FCPA) and fully cooperate with investigations.

As reported by The Washington Post, the proposed policy “strongly” recommends that prosecutors not bring criminal charges against companies that voluntarily report FCPA violations and cooperate with the government. Currently, the DOJ has no written policy specific to charging decisions for FCPA violations. The DOJ’s general policy regarding charging corporations is vague and indefinite, and fails to provide corporations certainty regarding the benefits of self-reporting violations. The proposed policy would provide corporations much-appreciated certainty when assessing the benefits of self-reporting FCPA violations.

The DOJ has declined to comment on the proposed policy, and there are reports of divisions within DOJ over the benefits offered by the draft. Notably, the proposed policy is reported to emphasize that full cooperation means turning over facts about individuals responsible for the misconduct regardless of rank, driving home the central message of the recently issued “Yates Memo” formalizing DOJ policy on targeting individual prosecutions in white collar cases. Whether this FCPA policy is adopted and how it will dovetail with the role of the new Compliance Counsel will be vital to companies struggling to manage bribery and corruption risk − particularly since the DOJ took pains, in announcing the new Compliance Counsel, to express that DOJ is not moving toward a “compliance defense” that would protect companies from liability due to employee misconduct.

The clearer guidance and increased certainty that a policy of this type might bring has been a consistent plea from the defense bar for years. George Terwilliger, co-head of McGuireWoods’ white collar practice and leader of the firm’s Strategic Response and Crisis Management practice, testified before the House Judiciary Committee’s Subcommittee on Crime, Terrorism and Homeland Security in 2011 on this exact issue. In his testimony, Mr. Terwilliger recommended legislative reforms on all fours with the policy being considered by the DOJ, including a self-reporting safe harbor. In his testimony, Mr. Terwilliger stressed that the pernicious “hidden cost born of the uncertainties attached to FCPA compliance risk” impacts business decisions in a manner that is artificially and unnecessarily adverse to the advancement of legitimate business activities, and merited legislative reform.

The fact that the policy, if adopted, will only be DOJ policy rather than legislative mandate is critical since DOJ is only one-half of the FCPA enforcement equation. Publicly traded companies and other “issuers” are also subject to the FCPA enforcement authority of the U.S Securities and Exchange Commission (SEC), which has been actively and aggressively pursuing enforcement actions for years, including through a “broken windows” enforcement policy. Accordingly, while a notable development, much remains to be seen on the adoption and application of this FCPA policy.