On March 1, 2018, U.S. Department of Justice (“DOJ” or the “Department”) officials announced that the Criminal Division is expanding the applicability of a policy that encourages corporate self-reporting and cooperation for violations of the Foreign Corrupt Practices Act (“FCPA”) to reach other types of non-corruption criminal cases.  Speaking at the American Bar Association’s National Institute on White Collar Crime in San Diego, John Cronan, Acting Assistant Attorney General for the DOJ Criminal Division, and Benjamin Singer, Chief of the DOJ Securities and Financial Fraud Unit, told attendees that the Criminal Division will apply the FCPA Corporate Enforcement Policy (the “FCPA Enforcement Policy”) as nonbinding guidance in cases other than FCPA cases.

The FCPA Enforcement Policy, which was adopted in November 2017, provided additional guidelines regarding the credit the Department will provide to companies that self‑report FCPA violations and then cooperate with the resulting investigation – including a presumption that self-reporting companies will not be criminally charged.  Expanding use of the FCPA Enforcement Policy signals the Department’s perception of its success and a further effort by DOJ to encourage companies to self-report and cooperate.  It also provides important guidance for companies faced with a variety of different types of investigations regarding the treatment they can expect, and tools to advocate before the Department for more favorable resolutions.

Background: The FCPA Enforcement Policy

The FCPA Enforcement Policy, which was incorporated into the U.S. Attorneys’ Manual,[1] provides for enhanced credit to companies for voluntarily self-disclosing misconduct in an FCPA matter, fully cooperating, and timely and appropriately remediating.  Under the Policy, companies that satisfy these criteria will receive a declination of criminal charges so long as there are no “aggravating circumstances.”  It also provides that for companies that do not receive a declination, a 50% reduction off the minimum sentence may be granted provided the company voluntarily discloses the misconduct, fully cooperates, timely and appropriately remediates, and is not a criminal recidivist.  Notably, when issued, the FCPA Enforcement Policy was justified on the basis of “the unique issues presented in FCPA matters, including their inherently international character and other factors.”

For a more complete discussion of the FCPA Enforcement Policy, see Cleary Gottlieb’s Alert Memorandum DOJ Releases FCPA Corporate Enforcement Policy.

The Announced Expansion by the Criminal Division

In their remarks at the ABA Institute, the DOJ officials offered that the same treatment described in the FCPA Enforcement Policy would be available in other criminal cases investigated by the DOJ’s Criminal Division.  That potentially includes investigations relating to financial institutions-related offenses, money laundering, accounting and securities fraud, healthcare fraud, and other similar types of cases impacting companies that are investigated by DOJ prosecutors in the Criminal Division (often referred to as “Main Justice”).  In their remarks, the DOJ officials highlighted an example of the type of cooperation they are seeking to encourage, referring specifically to the DOJ’s February 28, 2018 decision to decline to prosecute Barclays PLC[2] relating to alleged front-running of certain foreign exchange transactions because Barclays had self-disclosed the misconduct, cooperated with the investigation, and fully remediated, consistent with the requirements of the FCPA Enforcement Policy.

Notably, the guidance does not apply to cases investigated by other DOJ components (for example, the Antitrust Division – which administers its own longstanding amnesty and leniency programs) or investigations by any of the 93 United States Attorney’s Offices around the country.

Despite those limitations, the announcement provides useful guidance for companies faced with potential investigations of non-FCPA criminal conduct.  These include:

  • Underscoring the value in conducting an early case assessment of potential wrongdoing (including, for example, in cases involving whistleblowers), and considering early whether to self-disclose potential criminal conduct to the DOJ Criminal Division. Indeed, the guidance provides a potential incentive in such cases to self-disclose to the Criminal Division (in order to invoke the Policy) rather than to another component of the DOJ that may not apply it, such as one of the U.S. Attorney’s Offices.
  • The guidance reinforces the DOJ’s broader efforts to encourage companies and individuals to pro-actively investigate potential criminal conduct, and to cooperate with law enforcement.
  • The guidance suggests further incentives for companies to put in place procedures to detect and mitigate potential criminal conduct in the ordinary course of business, including establishing robust compliance policies and procedures. This point was emphasized in a separate speech at the same event by Deputy Attorney General Rod Rosenstein, who explained “[w]hen something does go wrong, the greatest consideration should be given to companies that do not just adopt compliance programs, but incorporate them into the corporate culture. If you want us to treat a corporate entity as a victim, you should act like a victim who wants to see the perpetrators held accountable.”[3]

[1] United States Attorneys’ Manual § 9-47.120, FCPA Corporate Enforcement Policy, https://www.justice.gov/criminal-fraud/file/838416/download.

[2] Letter Agreement between Dept. of Justice and Barclays PLC (Feb. 28, 2018), https://www.justice.gov/criminal-fraud/file/1039791/download.

[3] Remarks of Rod Rosenstein, Deputy Attorney General, at the 32nd Annual ABA National Institute on White Collar Crime, https://www.justice.gov/opa/speech/deputy-attorney-general-rosenstein-delivers-remarks-32nd-annual-aba-national-institute.