As reported in the April Corruption Digest, last month, Johnson & Johnson settled an FCPA enforcement action.
The action was resolved by a deferred prosecution agreement (DPA). In the DPA, the DOJ states: “J&J had a pre-existing compliance and ethics program that was effective and the majority of problematic operations globally resulted from insufficient implementation of the J&J compliance and ethics program in acquired companies.”
The Johnson & Johnson enforcement action is a rare instance of the DOJ finding a company’s pre-existing compliance and ethics program “effective” despite the fact that alleged FCPA violations took place in the overall organization.
Notwithstanding that finding, Johnson & Johnson’s DPA imposes “Enhanced Compliance Obligations” in addition to the standard compliance metrics contained in typical DPAs that the company must abide by during the three-year term of the DPA. These “enhanced compliance obligations” require Johnson & Johnson to “conduct risk assessments of markets where J&J has government customers and/or other anticorruption compliance risks on a staggered, periodic basis.”