New FCPA Guidance

The Best Defense Is a Good Offense: FCPA Corporate Enforcement Policy Cements Importance of Compliance Programs

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The Department’s revised FCPA Corporate Enforcement Policy—which will be incorporated into the United States Attorneys’ Manual—builds on and makes permanent the Department’s 2016 FCPA Pilot Program. While much of the commentary on the revised policy has focused on the potential benefits of voluntary self-disclosure and cooperation after an issue arises, the policy also provides updated guidance to all companies on the hallmarks of an effective compliance and ethics program – an important and practical takeaway for compliance officers, in-house counsel, boards and executives.

DOJ’s Revised FCPA Corporate Enforcement Policy Formalizes the 2016 FCPA Pilot Program

The Pilot Program set out to evaluate if the Department could motivate companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in controls and compliance programs. One of the key components of the Pilot Program was the potential for substantial mitigation—including declination of prosecution in certain cases and, where warranted, a credit of up to a 50 percent reduction below the low end of the applicable U.S. Sentencing Guidelines’ fine range for companies that voluntarily self-disclose misconduct and cooperate and remediate to the Department’s satisfaction. Deputy Attorney General Rod Rosenstein expressed his satisfaction with the program’s results, which he heralded as a step forward in fighting corporate crime. He also noted that during the pilot period, the DOJ saw 30 voluntary disclosures to the FCPA Unit—compared to 18 during the previous 18‑month period.

In announcing the new formalized Policy, Deputy Attorney General Rosenstein emphasized that the Department will continue to strongly encourage voluntary disclosures and set forth what he considers to be the revised Policy’s three key features: READ MORE →

Understanding the New DOJ Compliance Guidance: Part Three – Policies & Procedures

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This is the third in a series of posts where we will explore critical elements of a successful compliance program. In February, the Department of Justice’s Fraud Section offered a new perspective on what the government expects in an anti-corruption compliance program, in the form of a series of questions that companies should be prepared to answer about their program.  The guidance offers companies a roadmap for building or assessing their compliance program.  In this series, we will explore recent and past guidance on key compliance topics, as well as key takeaways for companies of all sizes.

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Policies and Procedures are the cornerstone of a compliance program. While traditional sources of guidance, such as the DOJ and SEC FCPA Resource Guide and DPAs themselves, lay out the government’s fundamental expectations with regard to policies and procedures, the Fraud Section’s new guidance goes deeper, reflecting an approach that will assess not only the existence but also the design and integration of policies and procedures.

The most basic expectation with regard to policies and procedures is that companies will have a code of conduct prohibiting violations of the FCPA and the law’s foreign counterparts. Additionally, companies should have policies and procedures covering, among other things, gifts, travel & entertainment, expenses, political and charitable contributions, and payments to third parties.  Finally, traditional sources of guidance make clear that companies should also have a set of finance and accounting internal controls reasonably designed to ensure the maintenance of fair and accurate books and records.

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Understanding the New DOJ Compliance Guidance: Part 2 – Autonomy, Resources, and Staffing

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This is the second in a series of posts where we will explore critical elements of a successful compliance program. In February, the Department of Justice’s Fraud Section offered a new perspective on what the government expects in an anti-corruption compliance program, in the form of a series of questions that companies should be prepared to answer about their program.  The guidance offers companies a roadmap for building or assessing their compliance program.  In this series, we will explore recent and past guidance on key compliance topics, as well as key takeaways for companies of all sizes.

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It would be a mistake for companies to dismiss the Fraud Section’s recent guidance, which one high-level DOJ official suggested may be used more broadly by DOJ’s Criminal Division, as business as usual. It is not just more of the same.  The guidance does more than merely flesh-out existing direction; it operationalizes compliance.  Consider two examples from the guidance’s “Autonomy and Resources” section:

  • Empowerment – Have there been specific instances where compliance raised concerns or objections in the area in which the wrongdoing occurred?  How has the company responded to such compliance concerns?  Have there been specific transactions or deals that were stopped, modified, or more closely examined as a result of compliance concerns?
  • Compliance Role – Was compliance involved in training and decisions relevant to the misconduct?  Did the compliance or relevant control functions (e.g., Legal, Finance, or Audit) ever raise a concern in the area where the misconduct occurred?

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Understanding the New DOJ Compliance Guidance: Part 1 – Tone at the Top

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This is the first in a series of posts where we will explore critical elements of a successful compliance program. In February, the Department of Justice’s Fraud Section offered a new perspective on what the government expects in an anti-corruption compliance program, in the form of a series of questions that companies should be prepared to answer about their program.  The guidance offers companies a roadmap for building or assessing their compliance program.  In this series, we will explore recent and past guidance on key compliance topics, as well as key takeaways for companies of all sizes.

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A commitment from high-level management is typically the first compliance component discussed in government guidance and Deferred Prosecution Agreements. Commonly referred to as “Tone at the Top,” this critical concept has previously been described in vague, generic ways.  See, for example, this excerpt from Attachment C of DOJ’s recent DPA with Embraer S.A., which is identical to language in many other agreements:

“The Company will ensure that its directors and senior management provide strong, explicit, and visible support and commitment to its corporate policy against violations of the anti-corruption laws and its compliance code.”

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