The pilot program appears to put a tangible number on the potential amount of reduction in sanctions for cooperation, but in reality is not all that “new.”

On April 5, the U.S. Department of Justice (DOJ) announced a one-year pilot program aimed to increase cooperation in prosecutions under the U.S. Foreign Corrupt Practices Act (FCPA). Under the new program, announced by Assistant Attorney General Leslie Caldwell, companies that self-report violations of the FCPA and take other remedial steps may be eligible for up to a 50-percent reduction in the sanctions imposed for the underlying conduct.

The concept of reduced sanctions in return for cooperation is not new in the context of the FCPA. For years, companies that cooperated and remediated past conduct were offered some percentage reduction in sentences and, in some cases, non-prosecution or deferred prosecution agreements. The new pilot program appears to put a tangible number on the potential amount of reduction in sanctions for cooperation. However, as has been the case in the past, it will be within the DOJ’s judgment to determine whether a company’s cooperation and remediation efforts were sufficient to warrant a reduction as well as the size of that reduction. Moreover, the new pilot program will need to be read in conjunction with the previous memo issued by Deputy Attorney General Sally Quillian Yates, in which she outlined the DOJ’s then-new policy that only companies that disclose information about individual wrongdoing may be eligible for lesser penalties in exchange for their cooperation.

Overall, although not really “new,” the pilot program appears to be a step in the right direction in terms of setting forth a framework for arriving at a tangible benefit for cooperation in the context of FCPA investigations. For a number of years, companies and defense lawyers have questioned whether any true benefit came from such cooperation. However, whether this policy turns out to be significant will depend heavily on how it is applied in practice, i.e., what level of cooperation and remediation will be necessary to obtain a significant decrease in potential sanctions.

At the end of the day, this uncertainty will exist much as it did before the announcement of the pilot program. The more fundamental question remains as to whether the use of a pilot program such as this one is the best incentive for companies to cooperate with the DOJ in their efforts to prosecute foreign bribery, as opposed to adopting a compliance defense similar to the “adequate procedures” defense that was adopted under the UK Bribery Act 2010.