The DOJ has announced a potentially dramatic shift in its enforcement policy with regard to the Foreign Corrupt Practices Act (FCPA), the federal statute that prohibits bribery of foreign officials. The announced changes appear to usher in a new, more business-friendly era for companies seeking to limit FCPA enforcement risk through voluntary disclosure.
Speaking at a national conference on Wednesday, November 29, Deputy Attorney General Rod Rosenstein stated that for companies that voluntarily disclose FCPA violations, fully cooperate with the government’s investigation, and take steps to timely and appropriately remediate the misconduct, there will be a presumption that the DOJ will decline prosecution. To overcome that presumption, prosecutors will be required to establish aggravating circumstances related to the nature and seriousness of the offense, involvement of executive management in the offense, pervasiveness of the misconduct within the company, or the offender’s past criminal history.
In announcing the new policy, Rosenstein lauded the FCPA Pilot Program initiated by the DOJ in April 2016 as a “step forward in fighting corporate crime” but said there were “opportunities for improvement.” Under the terms of the Pilot Program, a corporation could obtain up to a 50 percent reduction off the low end of the Sentencing Guidelines range in exchange for disclosure, cooperation and remediation. The Pilot Program left open the possibility that prosecutors could resolve appropriate cases without a criminal resolution, and in fact, several cases under the Pilot Program were resolved through declinations. But the new policy virtually guarantees a total declination for corporations that meet the requirements, except in the most egregious cases, by establishing a presumption in favor of declination.
Similar benefits will not be available to individuals seeking resolution of their own potential FCPA liability. “It makes sense to treat corporations differently than individuals because corporate liability is vicarious; it is only derivative of individual liability,” Rosenstein said. But Rosenstein emphasized the new policy will not offer companies a free pass. Citing several recent resolutions under the Pilot Program in which companies received declinations but had to pay disgorgement, he said, “Clearly, this is not immunity.”
Rather than outlining the terms of the policy in a published memorandum as it has in the past, the DOJ has incorporated the new FCPA enforcement policy into the United States Attorneys’ Manual. Companies can now look there for policy details and clarification of the steps they must take to receive credit for voluntary disclosure, cooperation and remediation.