In late 2017, Deputy Attorney General Rosenstein announced a revised FCPA Corporate Enforcement Policy to be incorporated into the United States Attorneys’ Manual. With this revised policy, the Department of Justice (DOJ) aims to provide a level of certainty to companies in order to encourage voluntary disclosures of potential violations of the FCPA.
How Does it Encourage Voluntary Disclosures?
In return for voluntary disclosures, full cooperation, and timely and appropriate remediation, the revised policy calls for a presumption of resolution through declination. Of course, aggravating circumstances, such as the nature and seriousness of the offense or whether the offender is a criminal recidivist, will impact this presumption and the incentives a company may be eligible for. However, provided the company voluntarily discloses the wrongdoing and still satisfies the other requirements, the revised policy recommends a 50% reduction from the low end of the Sentencing Guidelines fine range.
How is it Different from the Pilot Program?
Whereas the previous guidance under the pilot program urged self-disclosing in return for a possibility of incentives, the revised policy sets forth clear recommendations for prosecutors to follow. It is important to remember, however, the revised policy is simply a set of guidelines and not a guarantee – prosecutors are still entitled to exercise prosecutorial discretion.
Any New Developments?
Because the revised policy was only just recently announced, there haven’t been any cases resolved to demonstrate how the DOJ will proceed under the new guidance. However, it is vital to reiterate the importance of continuing to invest in a robust compliance program and cooperation with investigators, as illustrated in two recent cases of declination with disgorgement.
In 2017, the DOJ declined to prosecute two companies for violations:
- A global engineering and construction company received a declination letter due in part to its timely and voluntarily disclosure of bribes made by employees in Asia; conducting a comprehensive investigation; full cooperation with the DOJ; disgorgement of millions of dollars in profits from the illegal conduct; enhancement of its compliance program and internal accounting controls; and full remediation including terminating all executives and employees involved.
- A large global industrial gas supplier received a declination letter due to its voluntary and timely self-disclosure; undertaking a proactive and thorough investigation; full cooperation and agreement to continue to cooperate in ongoing investigations; agreement to disgorge profits received from the improper conduct and forfeit corrupt proceeds it withheld from companies owned or controlled by government officials in a former Soviet republic (totaling in the millions of dollars); enhancement of compliance and internal accounting controls; and full remediation.
What Can Companies Do Now?
While we continue to monitor how the revised policy will be implemented, it is recommended that companies continue to follow best compliance program practices and undertake active compliance training on the adherence to applicable law, policies and procedures. Deputy Attorney General Rosenstein reiterated the key factors of an effective compliance and ethics program are: (1) fostering a culture of compliance; (2) dedicating sufficient resources to compliance activities; and (3) ensuring experienced compliance personnel have appropriate access to management and to the board.