On March 1, 2018, during a presentation at the American Bar Association’s annual white collar criminal defense conference, officials from the U.S. Department of Justice (DOJ) announced that certain self-disclosure and leniency practices and incentives, which are presently available for enforcement actions pursuant to the Foreign Corrupt Practices Act (FCPA), will now be utilized in other criminal matters.
Currently, the DOJ’s FCPA Corporate Enforcement Policy is designed to guide federal prosecutors toward resolving FCPA cases and to encourage companies to voluntarily self-disclose FCPA-related violations, fully cooperate with the DOJ, and remediate deficiencies in their internal controls and compliance programs. By doing so, companies may potentially maximize mitigation credit, lower fines, and in some instances avoid criminal prosecution all together. At last week’s ABA conference, the acting head of the DOJ’s Criminal Division, John Cronan, and the chief of the DOJ’s Securities and Fraud Unit, Benjamin Singer, said that prosecutors in the Criminal Division will now refer to that same FCPA Corporate Enforcement Policy as guidance, albeit nonbinding, in other criminal matters that do not necessarily involve FCPA issues.
Cronan and Singer cited Barclays as an example of a company that has benefited from the expansion of the FCPA’s voluntary self-disclosure and leniency practices. Recently, Barclays entered into an agreement with the DOJ that closed an investigation into the bank’s alleged “misappropriation” of certain information it provided to its client, the Hewlett-Packard Co., regarding foreign exchange options and trading activities. The DOJ decision to close that investigation was based on several factors, including but not limited to (1) Barclays’ “timely, voluntary self-disclosure”; (2) Barclays’ “thorough and comprehensive investigation”; (3) Barclays’ “full cooperation”; and (4) “the steps Barclays has taken and continues to take to enhance its compliance program.” Indeed, Cronan and Singer signaled that the Barclays matter provided a model for how companies may avoid potential criminal charges.
Notably, however, U.S. attorney’s offices in the regions (outside the DOJ’s Criminal Division) are not required to similarly expand their use of the FCPA-related policy to other criminal cases, as this new practice is nonbinding.
Nonetheless, the expansion of FCPA voluntary self-disclosure and leniency practices to other criminal cases provides concerned companies with reason to seriously assess potential self-disclosure, cooperation, and remediation with an eye toward the DOJ’s FCPA playbook.