May 29, 2020

May 29, 2020

Subscribe to Latest Legal News and Analysis

May 28, 2020

Subscribe to Latest Legal News and Analysis

May 27, 2020

Subscribe to Latest Legal News and Analysis

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:

  1. Voluntary self-disclosure;

  2. Full cooperation; and

  3. 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:

  1. 19 individuals pleaded guilty or were convicted in 2017.

  2. 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.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.


About this Author

Joseph D. Barton, Government Contracts Attorney, Sheppard Mullin Law Firm

Joseph Barton is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Los Angeles office.

Mr. Barton’s practice consists primarily of representing defense, healthcare, communication, and entertainment companies and non-profit organizations in federal criminal and civil False Claims Act cases.  The subject matter of Mr. Barton’s cases has included falsification of quality inspections and test data, kickbacks and other forms of bribery, labor mischarging, misallocation of costs, misuse of...

Keeley A. McCarty, Sheppard Mullin, Government Investigations Lawyer, International Trade Attorney

Keeley McCarty is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Ms. McCarty’s practice focuses on government contracts litigation and counseling, including contract termination appeals, litigation and arbitration of subcontractor disputes, and internal investigations.  Ms. McCarty has counseled clients on a broad range of legal topics, including FAR mandatory disclosure rules, title passage under government contracts, and corporate compliance with the FCPA, FCA, and lobbying laws.  She has practiced before the Armed Services Board of Contract Appeals, Superior Court of the District of Columbia, and other state courts.