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Pilot Program to Encourage Self-Disclosure of FCPA Violations Continued During Review

Tuesday, March 21, 2017
Sandler, Travis & Rosenberg Trade Report

The Department of Justice has announced that a pilot program designed to motivate companies to voluntarily self-disclose Foreign Corrupt Practices Act-related misconduct, fully cooperate with the Fraud Section of the DOJ’s Criminal Division, and remediate flaws in their controls and compliance programs will continue “in full force” past its April 5 expiration and until the DOJ reaches a final decision on whether to extend and/or revise it.

Under this pilot program, when a company not only cooperates and remediates but also voluntarily self-discloses it is eligible for the full range of potential mitigation credit. That means that if a criminal resolution is warranted, the Fraud Section may grant a reduction of up to 50 percent off the low end of the applicable U.S. Sentencing Guidelines fine range and generally will not require the appointment of a monitor if the company has implemented an effective compliance program at the time of resolution. In addition, when those same conditions are met, the Fraud Section’s FCPA Unit will consider a declination of prosecution. By contrast, a company that chooses not to voluntarily self-disclose but later fully cooperates and timely and appropriately remediates will receive a maximum of 25 percent off the low end of the applicable fine range.

A guidance document for DOJ staff on this pilot program states that the government cannot require business organizations to self-disclose, cooperate, or remediate and that companies remain free to reject these options and forego the credit available under the pilot program.

The pilot applies only to FCPA matters brought by the Fraud Section and does not apply to any other Fraud Section matters, any other section in the Criminal Division, any other part of the DOJ, or any other agency.

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