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DOJ Defines “Declination” in Its FCPA Corporate Enforcement Policy


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.

Compared to some FCPA commentators, the DOJ has long articulated a more disciplined (and thus accurate) use of the “d” word and a DOJ official recently stated: “Our responsibility as prosecutors is to follow the facts wherever they lead us. Sometimes the facts lead us to stop and close an investigation.”

In its recent “FCPA Corporate Enforcement Policy” (see here, herehere, here, here, and here for prior posts), the DOJ formally defined the term “declination.”

In its “FCPA Corporate Enforcement Policy,” the DOJ stated:

“A declination pursuant to the FCPA Corporate Enforcement Policy is a case that would have been prosecuted or criminally resolved except for the company’s voluntary disclosure, full cooperation, remediation, and payment of disgorgement, forfeiture, and/or restitution.  If a case would have been declined in the absence of such circumstances, it is not a declination pursuant to this Policy.  Declinations awarded under the FCPA Corporate Enforcement Policy will be made public.” (emphasis added).

While not as explicit as it could have been, the DOJ sure seems to be saying that when required legal elements are missing, this is not a declination. Indeed, the same day the DOJ released the “FCPA Corporate Enforcement Policy,” it announced the SBM Offshore enforcement action (see here and here for prior posts). In the enforcement action, the DOJ explained its prior 2014 “declination” of the matter as follows:

[A]lthough the Fraud Section initially declined to continue investigating the Company, it communicated that this declination was based on the findings of the Company’s investigation and the facts known to the Fraud Section at the time, and that there was no apparent jurisdiction at that point in time, but that the Fraud Section reserved the right to reopen the investigation if it learned of additional information or evidence that established U.S. jurisdiction;

[T]he Fraud Section informed the Company in 2016 that it was reopening the investigation because the Fraud Section learned additional information that was not uncovered during the Company’s investigation, and not known to either the Company or the Fraud Section at the time of the declination; specifically, that a United States-based executive of one of SBM’s wholly-owned domestic concerns managed a significant portion of the corrupt scheme, and engaged in conduct within the jurisdiction of the United States.”

In other words, the DOJ’s original “declination” was due to the lack of a required legal element being satisfied.

Interestingly enough, one of the instigators of the “declination” mess (Miller & Chevalier) stated in this alert regarding the “FCPA Corporate Enforcement Policy” as follows.

“[D]eclinations decided pursuant to the policy will be made public. The implication of this language is that if the DOJ declines to prosecute a matter and that decision is not announced, the decision will have been based on other factors, such as lack of jurisdiction, the running of the applicable limitations period, or failure to satisfy the statutory elements of a violation. This may allow for more accurate tracking of actual declination decisions by the DOJ.”

This begs the question: why was there ever inaccurate tracking of “declinations” by certain FCPA commentators?

In short, it would be nice if, finally, certain FCPA information sources would stop muddying the FCPA’s conversational waters. But then again when you are selling a commercial product that, in part, tracks so-called “declinations” like the FCPA Blog does, perhaps this is a minor concern.

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