DOJ announces new FCPA pilot program to promote self-reporting

Posted on April 21, 2016
Archive : April 2016
Category : News

On April 5, 2016, the DOJ announced that it is launching a one-year pilot program for FCPA enforcement as a step to continue its effort to target FCPA violations. The program aims to motivate companies to voluntarily disclose FCPA-related misconduct by making it transparent that a company has to voluntarily self-report its FCPA misconduct to receive full mitigation credit. It also provided further guidance on what constitutes "voluntary self-disclosure," "full cooperation" and "remediation."

The US Department of Justice ("DOJ") took a further step to enhance its enforcement effort against violations of the Foreign Corrupt Practices Act ("FCPA") by launching a one-year pilot program to encourage companies to voluntarily self-disclose FCPA-related misconduct and cooperate with the enforcement authorities. In particular, full cooperation credits in FCPA enforcement actions will only be available for companies that have self-reported. The benefits of full cooperation credits include a 50% reduction of the low end of the applicable US Sentencing Guidelines fine range or even a declination in prosecution. On the contrary, companies that fully cooperate and take proper remediation but have not self-reported will only be eligible for a 25% discount. 

The relevant DOJ guidance also describes what constitutes "voluntary self-disclosure," "full cooperation," and "remediation," which are key actions a company can take to cooperate in an FCPA enforcement action and has already been described as mitigating factors under the US Sentencing Guidelines. The guidance intends to provide further transparency of the DOJ's enforcement considerations. 

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Written by Lisa - HSF