DOJ extends FCPA Pilot Programme for self-reporting

Lexis DiligenceCompliance SolutionsLexisNexis BIS

The U.S. Department of Justice (DOJ) has decided to extend its FCPA Pilot Programme, designed to encourage companies to self-report evidence of bribery and corruption, until it feels able to judge the programme's effectiveness.


Pilot Programme encourages companies to self-report evidence of financial crime


DOJ had launched the Pilot Programme in April 2016 with the aim to encourage target companies to report uncovered evidence of a breach of FCPA regulations. Voluntarily self-disclosure to the DOJ of non-compliance while fully cooperating with the investigation, and making the necessary improvements to its compliances processes, shall make the said company "eligible to receive outright declinations or reduced fines and penalties." The programme aims to promote "greater accountability for individuals and companies that engage in corporate crime."

In an article in The New York Law Journal, the impact of the Pilot Programme is shown by two contrasting non-prosecution agreements finalised within a month of each other at the turn of the year. While on one hand in January 2017, a casino and resort operating firm- Las Vegas Sands received only a 25% discount from the bottom of the applicable fines guidelines after reportedly failing to disclose misconduct, in December 2016, manufacturing firm General Cable received a 50% reduction after voluntarily disclosing more than a decade of FCPA violations.

DOJ has decided to extend the pilot as announced by Acting Assistant Attorney General Kenneth A. Blanco in a speech to the American Bar Association White Collar Crime conference last month. He said the DOJ will evaluate the pilot's "utility and efficacy" to determine "whether to extend it, and what revisions, if any, we should make to it." He said the pilot will continue "in full force" until the DOJ has made a decision.

Global trend towards self-reporting

In an effort to curb corruption and bribery, several countries worldwide are coming up with legislations, encouraging companies to voluntarily self-disclose evidence of bribery and corruption. Since November 2015, the UK's Serious Fraud Office has agreed to three Deferred Prosecution Agreements (DPAs) with companies that self-reported evidence of bribery and corruption. The most recent was a £497 million settlement with Rolls-Royce earlier this year. In June, France will be introducing Sapin II, akin to the DPA, allowing companies to enter into negotiated settlements with the Authorities. Following suit, Australia had launched a public consultation paper on whether to introduce DPAs, with 14 of 16 responses from stakeholders coming back in favour of the proposal. Though it's a matter of time before US decides to continue with the Programme as parent legislation or not, evidence states that countries worldwide are encouraging self-reporting of misconduct through legislations.

US still committed to FCPA enforcement

Mr Blanco said that the U.S. "remains committed to doing its part by vigorously investigating and prosecuting international crime when it violates U.S. laws." The election of Donald Trump as the President of the US had raised serious concerns of the continuation of the Pilot Programme and reduced enforcement of the FCPA in light of his comments in 2012 that the FCPA is an "outrageous" law and that it is "ridiculous" that the U.S. criminalises bribery that happens abroad. But Jonathan Sack, a former Assistant U.S. Attorney for the Eastern District of New York, says Mr Blanco's speech "indicates that FCPA enforcement is not likely to end under the new administration."

Rise of anti-corruption enforcement

Mr Blanco acknowledged the fact that anti-corruption investigations have become "a global movement" and that more countries than ever before are taking action against wrongdoing. He said, "It is no longer just us and a few other countries" that take enforcement action against global bribery. Recent cases show that countries are indeed increasingly willing to share information and co-operate on investigations into financial crime. In addition to Rolls-Royce's settlement with the UK's SFO over allegations of bribery and corruption, it also reached settlements with Brazil and the U.S.