The new Policy provides for:
- Presumption of declinations for companies filing voluntary self-disclosures (absent aggravating circumstances).
- Benefits for non-disclosing companies that later remediate and cooperate with DOJ.
- Insight into the Department’s compliance program evaluation process.
- Clarification of certain key terms and definitions.
On November 29, 2017, U.S. Department of Justice Deputy Attorney General Rod Rosenstein announced an update to the Department’s United States Attorneys’ Manual, which will now include an FCPA Corporate Enforcement Policy. This policy is an extension and expansion of the Department’s FCPA “Pilot Program,” which was announced in April 2016. The new policy does not apply to the SEC’s approach to resolution of FCPA cases within its jurisdiction.
Key Elements of the New FCPA Corporate Enforcement Policy
When a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation, DOJ will now presumptively consider resolving the matter through a declination (i.e., DOJ will close the matter without imposing a penalty, with no presumption of guilt or innocence). This presumption of declination will be applied only absent aggravating circumstances related to the nature and seriousness of any offense. The policy provides a non-exhaustive list of those aggravating circumstances, which include “involvement by executive management of the company in the misconduct; a significant profit to the company from the misconduct; pervasiveness of the misconduct within the company; and criminal recidivism.”
The standards for voluntary self-disclosure will be met if the company discloses (1) prior to the imminent threat of disclosure or government investigation; (2) within a reasonably prompt time after becoming aware of the offense; and (3) all relevant facts known to it. Further, full cooperation is provided if the company (1) discloses all relevant facts on an ongoing basis; (2) cooperates proactively; (3) discloses all relevant documents and information; (4) takes appropriate internal investigative steps in coordination with what the DOJ intends to do as part of its investigation; and (5) makes available for DOJ interviews company officers and employees (and, where possible, third parties). Finally, “timely and appropriate remediation” requires companies to demonstrate (1) a thorough analysis of causes of the underlying conduct and appropriate remediation; (2) implementation of an effective compliance and ethics program; (3) appropriate discipline of employees; (4) retention of business records; and (5) any additional steps that demonstrate recognition of the seriousness of the misconduct.
Unless the company is a recidivist, voluntary self-disclosures with aggravating circumstances may still receive a benefit. Thus, the DOJ will recommend a 50% reduction from the low end of the U.S. Sentencing Guidelines (USSG) fine range and, if a company has implemented an effective compliance program, DOJ may decide not to insist on the appointment of a monitor for the company. The new policy even provides that, for companies which do not initially file a voluntary self-disclosure, but subsequently cooperate and remediate, DOJ will recommend a 25% reduction from the low end of the USSG fine range.
Additionally, the new policy provides insight into and guidance on the Department’s evaluation of compliance programs. Although the factors considered will vary based upon the size and sophistication of a company, key factors include fostering a culture of compliance, dedicating sufficient resources to compliance activities, and ensuring that experienced compliance personnel have appropriate and meaningful access to management and to the relevant board committee(s).
In his announcement, Mr. Rosenstein noted that the new policy should “incentivize responsible corporate behavior and reduce cynicism about enforcement.” He added, however, that the new policy “does not provide a guarantee. We cannot eliminate all uncertainty. Preserving a measure of prosecutorial discretion is central to ensuring the exercise of justice.” It remains to be seen how much prosecutorial discretion will be exercised as the new policy is applied to future FCPA cases.