The FCPA Corporate Enforcement Policy: It pays to play

February 1st, 2018

 At a time of great global uncertainty and volatility, one thing is certain: the US is serious about maintaining its strong enforcement of the Foreign Corrupt Practices Act (FCPA).

On November 29, 2017 Department of Justice (DOJ) Deputy Director Rod Rosenstein moved to formally enshrine the FCPA Pilot Program, begun under President Obama, by incorporating it in the U.S. Attorney’s Manual (USAM) at Title 9-47.120, now called the FCPA Corporate Enforcement Policy (“the Policy”).  Now that the policy has moved from an experiment to a fixture of the U.S. enforcement landscape, here’s what companies need to know to use it to their advantage.

  1. Self-disclosure can lead to declination.

If a company self-discloses and immediately takes action to remedy an anti-bribery anti-corruption (ABAC) violation, the Policy advises a presumption that DOJ will pursue the route of a declination.  The presumption won’t hold, however, if there are aggravating circumstances such as involvement by executive management of the company in the misconduct, a significant profit to the company from the misconduct, pervasiveness of the misconduct within the company, or criminal recidivism.

  1. Where criminal charges are pursued, cooperation will reduce the sentence.

Even in the case that DOJ finds that criminal charges are warranted, a company that has self-disclosed and fully cooperated (and is a first-time offender) will merit a “50% reduction off of the low end of the U.S. Sentencing Guidelines (U.S.S.G.) fine range”—in other words, a significantly lower penalty.

  1. Your compliance program is your ally.

A well-functioning ABAC compliance program is a powerful tool for companies, whether implemented before or after a violation is exposed.  On the front end, functional complaints reporting and information gathering can give a company the option of self-disclosing and providing meaningful cooperation that can avoid or reduce a criminal sentence.

 

Even if a compliance program was weak at the time of the violation, bringing it up to speed can have significant impact on the outcome of the case.  If a cooperating company has, “at the time of resolution, implemented an effective compliance program,” counsels the Policy, it can generally avoid the appointment of a costly monitor.

Formalizing the FCPA Corporate Enforcement Policy is good news for companies, since it provides more ways for them to predict and control the outcome of a future enforcement action.  By maintaining a robust compliance program, complete with risk-based third-party due diligence, companies may be able to minimize the adverse impacts associated with possible FCPA violations. Partnering with compliance providers, who offer full solutions to manage your third-party business partners and intermediaries, can empower your key decision makers to act strategically and confidently.

Steele’s end-to-end solution can be adapted for any stage of your compliance process, whether your organization needs to create and implement a program from scratch, wants to augment your existing team as needs arise, seeks a platform for tracking potential risks from a third-party business partner, or is already under investigation for alleged violations, our cost-effective suite of compliance tools can ease the burden of your compliance team.

 

Download our whitepaper, FCPA Enforcement Trends: 2017 for more insight to FCPA policy.