Incentives to Self-Disclose FCPA Violations Increased
Deputy Attorney General Rod Rosenstein announced recently a new enforcement policy that seeks to further enhance the benefits of self-disclosing violations of the Foreign Corrupt Practices Act. The policy, which is already in effect and has been incorporated into the U.S. Attorneys’ Manual, codifies and enhances a recently-concluded 18-month pilot program during which the Department of Justice received 30 FCPA voluntary disclosures, up from 18 during the previous 18-month period.
The new policy states that when a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation there will be a presumption that DOJ will resolve the company’s case through a declination of prosecution. That presumption may be overcome only if there are aggravating circumstances; these are not defined, but examples include executive management involvement in the misconduct, a significant profit from the misconduct, pervasiveness of the misconduct within the company, and criminal recidivism.
If aggravating circumstances warrant an enforcement action even if a violation is voluntarily disclosed and all other requirements are satisfied, DOJ will recommend a 50 percent reduction off the low end of the Sentencing Guidelines fine range (except in the case of a repeat offender). DOJ will also generally not require the appointment of a compliance monitor if a company has implemented an effective compliance program at the time of resolution.
To qualify for this policy companies must pay all disgorgement, forfeiture, and/or restitution resulting from the misconduct at issue. Companies will remain free not to comply.
Rosenstein said the policy also provides details about how DOJ will evaluate an appropriate compliance program. While these will vary depending on the size and resources of a business, examples include fostering a culture of compliance, dedicating sufficient resources to compliance activities, and ensuring that experienced compliance personnel have appropriate access to management.