High-ranking US Department of Justice ("DOJ") officials have confirmed that in its economic sanctions and export control investigations the DOJ will increasingly focus on investigating and prosecuting individual executives as well as companies involved in alleged misconduct.
David Laufman, a top official of DOJ's National Security Division, reportedly revealed last week that the division expects soon to release guidelines for the voluntary disclosure of potential sanctions and export control violations by corporations and corporate officers.
In the wake of the financial crisis, the DOJ was criticized for permitting corporations to resolve criminal and regulatory investigations, sometimes without admitting misconduct, and declining to prosecute responsible individuals. In September 2015, the DOJ issued a memorandum authored by Deputy Attorney General Sally Yates (the "Yates memo") to all federal prosecutors, directing them to focus on holding culpable individuals accountable in their investigations of corporate misconduct. The memorandum also emphasizes that corporations will be required to provide evidence concerning individuals' wrongdoing and will receive no cooperation credit if they refuse to do so.
Laufman spoke on a March 2 panel at the American Bar Association's annual National Institute on White Collar Crime in San Diego. During his presentation, he reportedly stated that the policy announced in the Yates memo would "govern investigations and prosecutions of violations of US export control and sanctions laws by corporations and corporate officers." The DOJ's National Security Division, he said, will release guidance concerning the benefits available to corporations for voluntarily disclosing and cooperating—and, it follows, the consequences of failing to do so. Laufman's remarks echo another high-ranking DOJ official, who stated in mid-December 2015 that the department "continue[s] to prioritize corporate misconduct related to export control and sanctions violations" and noted the DOJ's "sharpened focus in this area including on individual corporate defendants."
The officials' statements suggest that the DOJ will continue to increase the agency's emphasis on investigating individuals suspected of criminal wrongdoing, including in the sanctions and export control space. The majority of alleged sanctions violations, however, are resolved by the US Treasury Department's Office of Foreign Assets Control ("OFAC") by means of civil, rather than criminal, penalties. It remains to be seen how the DOJ's forthcoming cooperation guidance in sanctions cases may affect OFAC's approach to assessing individual liability. Corporations navigating criminal investigations have already begun grappling with the effects of DOJ's policy of targeting individuals. It seems likely that corporations will continue to face similar challenges in the sanctions and export control context.