DOJ Criminal Division Announces Launch of FCPA Enforcement Pilot Program

18th April 2016

The Fraud Section of the U.S. Department of Justice (“DOJ”) Criminal Division announced on April 5, 2016 that it is launching a one-year Foreign Corrupt Practices Act (“FCPA”) enforcement pilot program (“Program”). This new initiative is designed to motivate companies to voluntarily self-disclose FCPA wrongdoing, fully cooperate with the Fraud Section investigations, and correct any remediate flaws in their controls and compliance programs. Companies that meet the Program’s requirements will be eligible for a full range of significant benefits, inclusive of potential mitigation credit where criminal prosecution is warranted that can be a reduction of up to 50% below the low end of the U.S. Sentencing Guidelines fine range, avoidance of the appointment of a compliance monitor and possibly, a declination of prosecution.

The credits available to companies under the Program are above and beyond any mitigation credit or fine reduction provided for under the Principles of Federal Prosecution of Business Organizations ("USAM Principles") or the U.S. Sentencing Guidelines, although the Program standards are more exacting than the standards required under the Sentencing Guidelines.

The Program outlines three steps that a company must take to receive additional credit. First, the company must voluntary self-report corporate misconduct wherein the disclosure must be made prior to an imminent threat of disclosure or government investigation, must be within a reasonable prompt time after becoming aware of the offense and disclose all relevant fact known to it, including information about individuals involved in the wrongdoing. Second, the company must cooperate fully with DOJ in its investigations.  The Plan articulated a number of requirements in order to receive credit for full cooperation, including proactive disclosure of all facts that are relevant to the investigation, even facts not specifically asked for, provision of all facts relevant to criminal conduct by all third-party companies and/or individuals, disclosure of all overseas documents and witnesses and the facilitation of foreign third-party document productions and witnesses, and where requested, provide translations of relevant documents in foreign languages. Third, the company must engage in a timely and appropriate remediation in FCPA matters, including an effective compliance and ethics program, appropriate discipline of employees, and any additional steps that indicate recognition of the seriousness of the corporate misconduct.

Companies that do not voluntarily disclose FCPA misconduct in accordance with the requirements in the Program but fully cooperate and timely and appropriately remediate, will be accorded with a limited credit to be, at most, a 25% reduction off the bottom of the Sentencing Guidelines fine range, markedly less than the credits available to companies that do self-disclose violations and meet the Program requirements.  

An additional requirement for companies to receive credits includes the disgorgement of all profits resulting from FCPA violations at issue.