Presumption of Declination with Voluntary Disclosure, Cooperation, and Remediation of FCPA Violations
Deputy Attorney General Rod J. Rosenstein recently announced a revision to the U.S. Department of Justice (“DOJ”) policy on corporate enforcement of the Foreign Corrupt Practices Act (“FCPA”). The revision codifies a pilot program established during the Obama administration, which allows some companies that voluntarily disclose possible violations of the FCPA to avoid criminal prosecution. The new Corporate Enforcement Policy will be codified in the U.S. Attorney’s Manual. These announcements came during Mr. Rosenstein’s speech at the 34th International Conference on the FCPA, on November 29, 2017. Mr. Rosenstein’s overall theme was that global corruption negatively impacts business, society, and governments, and he asked corporate America to help fight corruption through compliance programs, as a matter of American safety and security.
The revised enforcement policy adopts the Obama administration’s policy under which there will be a presumption of declination to prosecute in cases where a company meets three conditions:
Full cooperation; and
Timely and appropriate remediation.
While companies meeting this standard will benefit from a presumption of declination, the presumption can be overcome (and criminal prosecution may be pursued) in cases where there are certain aggravating circumstances related to the nature and seriousness of the offense. In cases that meet the self-disclosure standards but do not receive a declination, DOJ may recommend a fifty percent reduction off the low end of the fine range established in the United States Sentencing Commission Guidelines. Recidivist companies may not be eligible for the presumption of declination or the penalty reduction.
Mr. Rosenstein characterized the new policy as an effort to motivate and reward companies for doing the right thing and voluntarily disclosing misconduct. The goal of incorporating the policy into the U.S. Attorneys’ Manual is to achieve more uniform application of the rules and greater clarity in prosecution decisions.
In addition to unveiling the DOJ’s revised policy, Mr. Rosenstein discussed the DOJ’s recent prosecution and settlement statistics. The key statistics he covered are as follows:
19 individuals pleaded guilty or were convicted in 2017.
In the corporate realm since 2016, the DOJ has:
a) reached criminal resolutions in 17 corporate cases;
b) obtained 2 voluntary disclosures under the pilot program that led to the revised Policy;
c) secured guilty pleas, deferred prosecution agreements, or a combination of both in 12 of the remaining 15 corporate resolutions;
d) declined to prosecute 7 companies who voluntarily disclosed (but still required disgorgement); and
e) assessed $1.6 billion in penalties and forfeitures
The full text of Mr. Rosenstein’s speech is available here.