The Department of Justice announced a revised FCPA Corporate Enforcement Policy. The new policy, designed to enable the DOJ to efficiently identify and punish criminal conduct while encouraging voluntary disclosures of wrong doing, offers the prospect of a declination, or a 50% reduction off the low end of the Sentencing Guidelines fine range, if the Department concludes that the company has cooperated and conducted the appropriate remediation. The policy was announced in a speech by Deputy Attorney General Rosenstein, delivered at the 34th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2017)(here ).
The new policy is an outgrowth of the DOJ’s Pilot Program, launched in April 2016. Under the terms of that program companies who self- reported and fully cooperated could earn up to a 50% reduction of the bottom end of the Sentencing Guidelines fine range. Those that fully cooperated but did not self-report had an opportunity to earn cooperation credit which could result in up to a 25% reduction off the bottom of the Sentencing Guidelines fine range, according to a DOJ memorandum dated April 5, 2016 (here).
The new policy expands on the Pilot Program. Under the new policy when a company meets the standards of voluntary self-disclosure, full cooperation and timely and appropriate remediation “there will be a presumption that the Department will resolve the matter through a declination,” according to the Deputy AG. If, however, there are “aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist” the presumption may be overcome.
When there are aggravating circumstances but the firm meets self-reports and meets the other requirements of the policy, the “Department will recommend a 50% reduction off the low end of the Sentencing Guidelines fine range.” Again, criminal recidivists may not be eligible for this credit.
The final policy, which will be added to the U.S. Attorney’s Office Manual, will identify the hallmarks of an effective compliance and ethics program. Those include, according to the Deputy AG, “fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.”
The new policy is not a guarantee. Firms have a choice regarding cooperation, Mr. Rosenstein noted. He then offered some statistics to aid the decision. Since 2016 the FCPA Unit has resolved 17 FCPA related corporate cases. Those actions resulted in over $1.6 billion in penalties and forfeiture. Two of the actions were voluntary disclosures under the Pilot Program. Each of those cases were resolved with a non-prosecution agreement. Neither agreement required a monitor.
The fifteen remaining cases were resolved differently. Twelve cases ended with guilty pleas, deferred prosecution agreements or a combination of the two. A monitor was imposed in ten of the cases.
Finally, an additional seven matters that were brought to the attention of the DOJ were resolved under the Pilot Program. Each case ended with a declination; each required the payment of disgorgement.
Program: The Fourth Annual Dorsey Federal Enforcement Forum will be held on December 6, 2017. There will be panel discussions and presentation on EPA enforcement, SEC enforcement, investment advisers, international sanctions, FinTec, and FBI international corruption investigations, followed by a holiday party. Attend in person, listen on the web or watch a live stream; CLE available. For a detailed program and free registration click here.