The Department of Justice tweaked its FCPA Corporate Enforcement Policy (see earlier alerts here , here , and here )to further incentivize corporations to make voluntary disclosures. These small changes essentially acknowledge that companies in a very early stage of an investigation may not have all of the information called for by the stricter requirements of the earlier provisions. Thus, these changes encourage companies to come forward at the earliest possible time to make a voluntary disclosure.
In a footnote added to the section that defines what constitutes a voluntary self-disclosure, the Policy now states:
"The Department recognizes that a company may not be in a position to know all relevant facts at the time of a voluntary self-disclosure, especially where only preliminary investigative efforts have been possible. In such circumstances, a company should make clear that it is making its disclosure based upon a preliminary investigation or assessment of information, but it should nonetheless provide a fulsome disclosure of the relevant facts known to it at that time."
In recognition of that fact, the DOJ clarified that at the time of the voluntary disclosure when disclosing all known relevant facts, including “all relevant facts about all individuals substantially involved in or responsible for the violation of law,” DOJ instead requires disclosure of known relevant facts “as to any individuals substantially involved in or responsible for the misconduct at issue.” Thus, a company does not have to make a determination early on that there was in fact a ”violation of law.”
In addition, as applied to whether a company will get full cooperation credit, the DOJ backed-off from the previous language that required proactive cooperation to include notifying DOJ “where the company is or should be aware of opportunities” for DOJ to obtain other evidence. The new language drops the “or should be” requirement. This takes away the potential ability of the DOJ to second-guess a company and say that the company should have disclosed something sooner because it should have been aware of the opportunity.
These changes are a small, but important, step in making companies more comfortable that they will be treated fairly if they do choose to voluntarily disclose misconduct to the DOJ. The decision to voluntarily disclose, however, is not one that should be made lightly. The costs associated with such a disclosure are high and may in many cases outweigh the alternative – stopping any violation, remediating to the extent reasonably possible, strengthening the company’s compliance program, and moving forward without disclosure. The Investigations and White Collar attorneys at BCLP can assist your company in investigating and giving legal advice on the benefits and liabilities of voluntary disclosure.
This document provides a general summary and is for information/educational purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal advice should always be sought before taking or refraining from taking any action.