On September 21, 2023, Principal Deputy Attorney General Marshall Miller (“Miller”) delivered a major speech at the Global Investigations Review Annual Meeting that underscored the Department of Justice’s (“DOJ”) increased focus on corporate national security matters. In the speech, Miller made two significant announcements: (1) DOJ will be issuing new guidance on voluntary self-disclosures (“VSDs”) in the context of M&A transactions in which diligence identifies potential misconduct by the acquired company and (2) DOJ will increase its focus on companies that violate existing agreements with the government, including national security agreements that result from transactions reviewed by the Committee on Foreign Investment in the United States (“CFIUS”).
Miller noted that while “in the past a company’s compliance team might have mitigated national security risks through sanctions-screening software and attention to a couple of sanctioned countries, today a new level of diligence and attention is required.” He explained that DOJ’s focus on national security-related economic crimes extends beyond sanctions, with recent cases ranging from “sanctions violations to money laundering to terrorism crimes” that are “splayed out across every walk of corporate life” and “across industries, from construction and shipping to agriculture and telecommunications.” The speech builds on the recent announcement by the National Security Division of the appointment of a Chief and Deputy Chief Counsel for Corporate Enforcement and signals that this is a DOJ-wide priority. Miller emphasized that “companies in the private sector are on the front lines of national security challenges like never before” and their “corporate compliance programs [need to] become increasingly sophisticated to keep up.”
There are a number of practical steps that companies may consider taking based on themes emphasized in Miller’s speech.
More broadly, the speech underscores the continued need for all companies to prioritize national security issues in their compliance programs. Companies with exposure to Russia, China and other “autocratic” regimes need to be particularly cautious, as these are priority areas for the DOJ (and the broader U.S. government’s national security apparatus).