Deputy Attorney General Rod Rosenstein. Credit: Diego M. Radzinschi / NLJ

The U.S. Justice Department is pushing out revised foreign-bribery enforcement guidance that will effectively make permanent a pilot program that was aimed at incentivizing voluntary disclosure of misconduct.

Deputy Attorney General Rod Rosenstein, speaking Wednesday at the International Conference on the Foreign Corrupt Practices Act, said the revisions are designed to provide “greater certainty for companies struggling with the question of whether to make voluntary disclosures of wrongdoing.”

Under the new policy, the Justice Department will adopt a presumption that no charges will be filed against certain companies that meet certain compliance standards. Prosecutors would recommend in other cases—where charges are filed—a 50 percent reduction off the bottom of the range for fines under federal sentencing guidelines.

Rosenstein stressed the new policy “does not provide a guarantee” for companies.

“We cannot eliminate all uncertainty,” Rosenstein said. “Preserving a measure of prosecutorial discretion is central to ensuring the exercise of justice. But with this new policy, we strike the balance in favor of greater clarity about our decision-making process.”

What follows are some highlights from the revisions, in Rosenstein's own words.

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The Justice Department's big expectation: Boost the number of voluntary disclosures.

“We expect the new policy to reassure corporations that want to do the right thing. It will increase the volume of voluntary disclosures, and enhance our ability to identify and punish culpable individuals. The new policy, like the rest of the department's internal operating policies, creates no private rights and is not enforceable in court. But it does promote consistency by attorneys throughout the department.”

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Cooperation, in some instances, will come with the presumption that the DOJ will decline to prosecute.

“The FCPA Corporate Enforcement Policy states that when a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation, there will be a presumption that the department will resolve the company's case through a declination. That presumption may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist. It makes sense to treat corporations differently than individuals, because corporate liability is vicarious; it is only derivative of individual liability.”

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Here's what the DOJ thinks are the hallmarks of an “appropriate” compliance program.

“[T]he policy provides details about how the department evaluates an appropriate compliance program, which will vary depending on the size and resources of a business. The policy therefore specifies some of the hallmarks of an effective compliance and ethics program. Examples include fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.”

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“This is not immunity.”

“Since 2016, the fraud section's FCPA unit has secured criminal resolutions in 17 FCPA-related corporate cases, resulting in penalties and forfeiture to the department in excess of $1.6 billion. Of those 17 corporate criminal resolutions, only two were voluntary disclosures under the pilot program. Significantly, each of the two voluntary disclosure cases was resolved through a non-prosecution agreement, and in neither case did we impose a compliance monitor.

Of the 15 corporate resolutions that were not voluntary disclosures, all but three were resolved through guilty pleas, deferred prosecution agreements or some combination of the two. In 10 of those cases, the company was required to engage an independent compliance monitor.

Over that same time period, seven additional matters that came to our attention through voluntary disclosures were resolved under the pilot program through declinations with the payment of disgorgement. Clearly, this is not immunity.”

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Don't call this the “Rosenstein Memo.”

“I know that previous corporate fraud policies often were identified by the name of the deputy attorney general who wrote the memo. It is nice to be remembered. But one of my goals is not to be remembered for writing a memo. After spending nearly three decades trying to keep track of prolix memos, I want the department to issue concise policy statements. Historical background and commentary should go in a cover memo or a press release. In most instances, the substance of a policy should be in the United States Attorneys' Manual, and it should be readily understood and easily applied by busy prosecutors. So, the FCPA Corporate Enforcement Policy I am announcing today will be incorporated into the United States Attorneys' Manual.”

Read more:

Deputy Attorney General Rod Rosenstein. Credit: Diego M. Radzinschi / NLJ

The U.S. Justice Department is pushing out revised foreign-bribery enforcement guidance that will effectively make permanent a pilot program that was aimed at incentivizing voluntary disclosure of misconduct.

Deputy Attorney General Rod Rosenstein, speaking Wednesday at the International Conference on the Foreign Corrupt Practices Act, said the revisions are designed to provide “greater certainty for companies struggling with the question of whether to make voluntary disclosures of wrongdoing.”

Under the new policy, the Justice Department will adopt a presumption that no charges will be filed against certain companies that meet certain compliance standards. Prosecutors would recommend in other cases—where charges are filed—a 50 percent reduction off the bottom of the range for fines under federal sentencing guidelines.

Rosenstein stressed the new policy “does not provide a guarantee” for companies.

“We cannot eliminate all uncertainty,” Rosenstein said. “Preserving a measure of prosecutorial discretion is central to ensuring the exercise of justice. But with this new policy, we strike the balance in favor of greater clarity about our decision-making process.”

What follows are some highlights from the revisions, in Rosenstein's own words.

|

The Justice Department's big expectation: Boost the number of voluntary disclosures.

“We expect the new policy to reassure corporations that want to do the right thing. It will increase the volume of voluntary disclosures, and enhance our ability to identify and punish culpable individuals. The new policy, like the rest of the department's internal operating policies, creates no private rights and is not enforceable in court. But it does promote consistency by attorneys throughout the department.”

|

Cooperation, in some instances, will come with the presumption that the DOJ will decline to prosecute.

“The FCPA Corporate Enforcement Policy states that when a company satisfies the standards of voluntary self-disclosure, full cooperation, and timely and appropriate remediation, there will be a presumption that the department will resolve the company's case through a declination. That presumption may be overcome only if there are aggravating circumstances related to the nature and seriousness of the offense, or if the offender is a criminal recidivist. It makes sense to treat corporations differently than individuals, because corporate liability is vicarious; it is only derivative of individual liability.”

|

Here's what the DOJ thinks are the hallmarks of an “appropriate” compliance program.

“[T]he policy provides details about how the department evaluates an appropriate compliance program, which will vary depending on the size and resources of a business. The policy therefore specifies some of the hallmarks of an effective compliance and ethics program. Examples include fostering a culture of compliance; dedicating sufficient resources to compliance activities; and ensuring that experienced compliance personnel have appropriate access to management and to the board.”

|

“This is not immunity.”

“Since 2016, the fraud section's FCPA unit has secured criminal resolutions in 17 FCPA-related corporate cases, resulting in penalties and forfeiture to the department in excess of $1.6 billion. Of those 17 corporate criminal resolutions, only two were voluntary disclosures under the pilot program. Significantly, each of the two voluntary disclosure cases was resolved through a non-prosecution agreement, and in neither case did we impose a compliance monitor.

Of the 15 corporate resolutions that were not voluntary disclosures, all but three were resolved through guilty pleas, deferred prosecution agreements or some combination of the two. In 10 of those cases, the company was required to engage an independent compliance monitor.

Over that same time period, seven additional matters that came to our attention through voluntary disclosures were resolved under the pilot program through declinations with the payment of disgorgement. Clearly, this is not immunity.”

|

Don't call this the “Rosenstein Memo.”

“I know that previous corporate fraud policies often were identified by the name of the deputy attorney general who wrote the memo. It is nice to be remembered. But one of my goals is not to be remembered for writing a memo. After spending nearly three decades trying to keep track of prolix memos, I want the department to issue concise policy statements. Historical background and commentary should go in a cover memo or a press release. In most instances, the substance of a policy should be in the United States Attorneys' Manual, and it should be readily understood and easily applied by busy prosecutors. So, the FCPA Corporate Enforcement Policy I am announcing today will be incorporated into the United States Attorneys' Manual.”

Read more: