New FCPA Policy Credits Effective Compliance Programs
A revised Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy (USAM 9-47.120) announced by the Department of Justice (DOJ) gives credit for effective corporate compliance programs when companies voluntarily disclose FCPA transgressions. The revised policy builds on the DOJ’s 2016 FCPA Pilot Policy. Credit will be given when a company can demonstrate the effectiveness of its compliance program by evidencing the company’s own detection, internal controls, root cause analysis, and the timely and appropriate remediation of the offense. Under the new policy, DOJ invokes a rebuttable presumption that the company may not be charged, unless there are aggravating circumstances “related to the nature and seriousness of the offense, or if the offender is a criminal recidivist.” Since launching its successful pilot program in April 2016, DOJ provided letters of declination to seven companies, resolving matters through disgorgement.
DOJ incentivizes companies and operates more transparently under the new formal guidance. The policy encourages investment in effective compliance programs by making clear how credit may be given when DOJ makes charging decisions. Deputy Attorney General Rod Rosenstein has commended the new policy, stating that “the government should provide incentives for companies to engage in ethical corporate behavior.” (See the Deputy Attorney General’s full statement here.) The new policy will be incorporated into the United States Attorneys’ Manual, as required guidelines, not mere suggestions for local US Attorneys’ offices to follow. DOJ specifies what it seeks when it assesses the effectiveness of compliance program and an FCPA-compliant company. The policy enumerates items required for a company to receive full credit for timely and appropriate remediation (beyond the credit available under the United States Federal Sentencing Guidelines). Compliance officers have the opportunity to step forward, proving the value of their services and programs. A company that voluntarily discloses may be granted a significant reduction in criminal fines. A company may avoid criminal prosecution, if they, among other things, can prove how they maintain tight internal enforcement and compliance measures, and if they identify individual(s) who may be involved.
Berkeley Research Group (BRG) experts have extensive business and process expertise and advise companies on developing and implementing effective corporate compliance and risk management programs. Our reports and compliance assessments have been used to successfully bring closure to allegations related to the FCPA, bribery, corruption, fraud and other misconduct. We conduct compliance audits and readiness assessments and serve as monitors in connection with Deferred Prosecution Agreements (DPAs). See our full services here.
For additional information, please contact Edward J. Buthusiem.