DOJ changes Corporate Enforcement Policy
DOJ makes changes to its Corporate Enforcement Policy and continues to encourage self-reporting
On November 20, 2019, the U.S. Department of Justice (DOJ) revised its FCPA Corporate Enforcement Policy (“FCPA Policy”), further clarifying what the DOJ expects from companies in relation to self-disclosures.
While the changes might appear subtle at first sight, they provide important guidance for companies:
First, the DOJ expects companies that self-disclose to report on the relevant facts known at the time of disclosure, and to specify when those disclosures are based on preliminary investigative efforts only.
Under the previous version of the FCPA Policy, a certain degree of uncertainty existed as to whether the DOJ expected companies to hold off on self-disclosure until a company had conducted a complete investigation that identified all relevant facts, or it had determined that a violation of the law actually occurred.
Previously, the requirement was that a company had to disclose “all relevant facts known to it”. This requirement has now been supplemented by the additional wording “at the time of disclosure”. Thereby, the DOJ took account of the fact that a company may not know all relevant facts at the time of disclosure, especially in circumstances where only preliminary investigative efforts have been undertaken so far.
The second substantial change relates to the previous requirement about disclosing facts about “individuals substantially involved in or responsible for the violation of law”, replacing “violation of the law” with the term “misconduct”. This change on the one hand aligns the wording used in the rest of the FCPA Policy but more importantly sends a clear signal to companies that they do not need to hold back on self-reporting until a conclusion has been made as to whether a violation of the law has actually taken place. Instead, the DOJ encourages rapid self-disclosure with the FCPA Policy.
This latest revision comes only a few months after a major revision had been published back in March of this year, which included the announcement by the DOJ that the FCPA Policy will apply as non-binding guidance for all criminal cases. It is yet a further example of the DOJ’s continued effort to promote self-disclosure in general but more specifically enable companies to make informed decisions about whether to self-disclose or not. Companies that find themselves in the – usually chaotic – early stages of an investigation now have to decide earlier than ever whether or not to self-disclose in order to obtain the potential full range of cooperation credit.
The FCPA Policy can be accessed here.