New FCPA Corporate Enforcement Policy May Move The Needle In Voluntary Disclosure Analysis

Author:Mr Kevin Abikoff, John F. Wood, Michael H. Huneke, Laura N. Perkins, Bryan J. Sillaman and Michael A. DeBernardis
Profession:Hughes Hubbard & Reed LLP

December 4, 2017 - On November 29, 2017, Deputy Attorney General Rod Rosenstein announced the adoption of the FCPA Corporate Enforcement Policy ("Enforcement Policy"), which attempts to further encourage voluntary disclosure of FCPA violations by companies. The Enforcement Policy attempts to clarify certain aspects of the FCPA Pilot Program launched by the Fraud Section in April 2016 and removes its "pilot" status by incorporating the general framework for credit for voluntary disclosure of FCPA violations into the United States Attorney's Manual (USAM).

The new Enforcement Policy creates a presumption that the Department of Justice (DOJ) will decline to bring enforcement actions when companies self-disclose, fully cooperate with the government's investigation, remediate any misconduct, and disgorge any ill-gotten profits, provided that there are no aggravating circumstances that would make a declination inappropriate. The Enforcement Policy gives DOJ significant discretion in determining whether the presumption should apply. It thus falls short of a true "amnesty" program, but it does increase the incentive for companies to self-disclose, as it increases the likelihood of receiving a declination and all but guarantees that non-recidivist companies that do not receive a declination, but satisfy the terms of the Enforcement Policy, will receive a 50% reduction off of the low end of the applicable United States Sentencing Guidelines fine range.

Pilot Program Background

The Pilot Program, announced in 2016, created a temporary system to encourage voluntary reporting of FCPA violations. Companies that voluntarily disclosed an FCPA violation, cooperated fully with the resulting government investigation, remediated the misconduct, and disgorged any tainted profits, could receive a reduction of up to 50% off the bottom of the United States Sentencing Guidelines fine range. Under the Pilot Program, the DOJ would also consider a declination of prosecution and would generally not require the imposition of a compliance monitor if these conditions were met.

Moreover, under the framework established by the Pilot Program, companies failing to voluntarily disclose FCPA violations could not receive more than a 25% discount off the bottom of the U.S. Sentencing Guidelines fine range, regardless of their level of cooperation or remediation.

Enforcement Policy

In addition to incorporating the general framework of the Pilot Program into the USAM, the Enforcement Policy...

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