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Ten Reasons Why The Corporate Community Should Take The DOJ’s “FCPA Corporate Enforcement Policy” With A Grain Of Salt

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Numerous prior posts have highlighted various aspects of the DOJ’s “FCPA Corporate Enforcement Policy” announced last week.

To be clear, this post does not advocate or even imply that the corporate community should ignore the “FCPA Corporate Enforcement Policy.” After all, the DOJ has extreme leverage over business organizations subject to FCPA scrutiny and it is always wise to at least be cognizant of what an adversary possessing a big and sharp stick is saying.

Nevertheless, absent limited circumstances not often present in instances of FCPA scrutiny, how to respond to internal breaches of FCPA compliance policies is a business decision entrusted to those charged with managing the business organization. In exercising this business judgment, the corporate community should take the “FCPA Corporate Enforcement Policy” with a grain of salt for at least ten reasons.

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DOJ Defines “Declination” in Its FCPA Corporate Enforcement Policy

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For years, these pages have highlighted (see prior posts herehere, and here among others) how the term “declination” is a big, muddy mess largely because of the creative and expansive use of that term by certain commentators including most notably over at the FCPA Blog and Miller & Chevalier.

To use the term “declination” anytime a company is under FCPA scrutiny (perhaps because of something as simple as a media report or a business competitor’s complaint), but there is no enforcement action is like saying the police “declined” to charge a sober driver with drunk driving when passing through a field sobriety checkpoint.

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Mum’s The Word As The DOJ Declines To Provide Clarity About The “Aggravating Circumstances” In Its New FCPA Corporate Enforcement Policy

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The DOJ’s new “FCPA Corporate Enforcement Policy” states:

“When a company has voluntarily self-disclosed misconduct in an FCPA matter, fully cooperated, and timely and appropriately remediated … there will be a presumption that the company will receive a declination [subject to a requirement to pay all disgorgement, forfeiture, and/or restitution resulting from the misconduct] absent aggravating circumstances involving the seriousness of the offense or the nature of the offender.  Aggravating circumstances that may warrant a criminal resolution include, but are not limited to, involvement by executive management of the company in the misconduct; a significant profit to the company from the misconduct; pervasiveness of the misconduct within the company; and criminal recidivism.”

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Deputy AG Rosenstein Assumes Causation In Calling The FCPA Pilot Program “Successful”

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As long as there have been government programs, government officials have been inclined to proclaim the program a success.

For instance, last week in announcing the DOJ’s new “FCPA Corporate Enforcement Policy, Deputy Attorney General Rod Rosenstein stated:  “The incentive system set forth in the Department’s FCPA Pilot Program motivates and rewards companies that want to do the right thing and voluntarily disclose misconduct. In the first year of the Pilot Program, the FCPA Unit received 22 voluntary disclosures, compared to 13 during the previous year.  In total, during the year and a half that the Pilot Program was in effect, the FCPA Unit received 30 voluntary disclosures, compared to 18 during the previous 18‑month period.”

As highlighted in this post, Rosenstein’s statement assumes causation – in other words that the supposed increase in voluntary disclosures was the result of the April 2016 Pilot Program.

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FCPA Flash – A Conversation With Leslie Caldwell (Former Ass’t AG, DOJ Criminal Division) About The DOJ’s New “FCPA Corporate Enforcement Policy”

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Leslie Caldwell. Caldwell is currently partner in the San Francisco and Silicon Valley offices of Latham & Watkins and previously served as the Assistant Attorney General of the DOJ’s Criminal Division. In this role, Caldwell was involved in implementing and promoting the DOJ’s April 2016 FCPA Pilot Program.

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