DOJ's New FCPA Guidance and Pilot Program

By Sotiris "Ted" Planzos / Apr 12, 2016

On April 5, 2016, in an effort to bolster FCPA Compliance, the Department of Justice issued its "Foreign Corrupt Practices Act Enforcement Plan and Guidance" identifying the following  three steps to enhance its FCPA enforcement strategy: (I) intensifying investigative and prosecutorial efforts; (II) strengthening its coordination with foreign law enforcement; and (III) implementation of an FCPA enforcement pilot program. The Guidance is the DOJ's attempt to bring greater transparency of the benefits achievable by voluntarily disclosing FCPA issues and fully cooperating with the investigation.

I.  Intensification of Investigative and Prosecutorial Efforts

The Department is "substantially increasing" its FCPA law enforcement resources by adding 10 more prosecutors to its FCPA unit, representing a 50% increase, while the FBI has established three new squads of special agents devoted to FCPA investigations and prosecutions. According to the Guidance, this demonstrated commitment by the Department "should send a message to wrongdoers that FCPA violations that might have gone uncovered in the past are no more likely to come to light.

II.  Strengthening Coordination with Foreign Law Enforcement

The Department is enhancing its coordination with foreign law enforcement to "hold corrupt individuals and companies accountable." The Guidance points out that the Department and its international counterparts are sharing leads and "coordinating to more effectively share documents and witnesses." 

 III.  FCPA Enforcement Pilot Program

The most important part of the Guidance is the new one year FCPA Pilot Program which offers companies enhanced cooperation credit.  According to the Guidance, the "principal goal of this program is to promote greater accountability for individuals and companies that engage in corporate crime by motivating companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs." The program provides for "mitigation credit." For a company to qualify for mitigation credit, it must meet three factors: (1) voluntary disclosure; (2) full cooperation; and (3) remediation. In addition to meeting these factors, a company will be required to "disgorge all profits resulting from the FCPA violation," in order to be eligible for mitigation credit. Mitigation credit can result in an "up to 50% reduction off the bottom end of the Sentencing Guidelines fine range if a fine is sought and the avoidance of a third party monitor," and in those situations where the factors are fully satisfied, the Department "will consider a declination of prosecution."

1.      Voluntary Self-Disclosure

Any voluntary disclosure must be a truly voluntary disclosure in order to be eligible for the full mitigation credit. "A disclosure that a company is required to make, by law, agreement, or contract does not constitute voluntary self-disclosure for purposes of this pilot." The Fraud Section will determine if the disclosure was "required," or voluntary.

Further, in order to qualify for mitigation credit, the disclosure must occur:

  • "prior to an imminent threat of disclosure or government investigation"
  • be made "within a reasonably prompt time after becoming aware of the offense, with the burden being on the company to demonstrate timeliness" and
  • the disclosure must include "all relevant facts known to [the company], including all relevant facts about the individuals involved in any FCPA violation."

2.      Full Cooperation

In addition to the requirements under the Principles of Federal Prosecution of Business Organizations, the Guidance, the following items are required for the disclosing company to receive full cooperation credit under the program:

  • Disclosure on a timely basis of "all facts relevant to the wrongdoing at issue," including "all facts related to involvement in the criminal activity by the corporation's officers, employees, or agents;"
  • "Proactive cooperation" rather than "reactive," with all facts relevant to the investigation being voluntarily provided to the government "even when [companies are] not specifically asked to do, and "must identify opportunities for the government to obtain relevant evidence not in the company's  possession and not otherwise known to the government;"
  • All relevant documents, as well as "information relating to their provenance," are expected to be preserved, collected,  and disclosed;
  • Timely updates concerning a company's internal investigation, "including but not limited to rolling disclosures of  information," where requested "de-confliction of an internal investigation with the government investigation;"
  • Furnish all relevant facts regarding "potential criminal conduct by all third-party companies (including their officers and employees) and third-party individuals;"
  • Make current officers and employees "who possess relevant information" available for interviews by DOJ, including, "where appropriate and possible" overseas officers and employees as well as former officers and employees (subject to Fifth Amendment rights);"
  • Disclosure of "all relevant facts gathered during a company's independent investigation including attribution of facts to specific sources where such attribution does not violate attorney client privilege, rather than a general narrative of facts;"
  • Disclosure of overseas documents and where they are located, unless such disclosure is  prevented by foreign law.  "The  burden is  on the company to establish the prohibition;"
  • Facilitate, unless prohibited by law, the third party production of documents and witnesses in foreign jurisdictions; and
  • When requested furnish translations of relevant documents.

3.      Remediation

The final requirement is that of "timely and appropriate remediation." The following items will  be required for companies to receive remediation credit.

  • Implementation of an Effective Compliance and Ethics Program: The criteria ""may vary based on the size and resources of the company, but will include:”
    • Whether the company has established a "culture of compliance;"
    • Whether the company has sufficient compliance resources;
    • The quality and experience of the compliance personnel;
    • The independence of the compliance function;
    • Whether the company's compliance program has performed an effective risk assessment and tailored the compliance program based on that assessment;
    • How a company's compliance personnel are compensated and promoted  compared to other employees;
    • The auditing of the compliance program to assure its effectiveness;  and
    • The  reporting structure of compliance personnel within the company.


  • Discipline of Culpable Employees: Companies must not only discipline culpable employees, but a system must be in place that provides "for the possibility of disciplining others with oversight of the responsible individuals and considers how compensation is affected by disciplinary infractions and failure to supervise adequately."


  • Acceptance of Responsibility: Demonstrate that the company has taken steps indicating its "recognition of the seriousness of the misconduct, acceptance of responsibility for it," and implement reforms to identify and "reduce the risk of repetition of such misconduct, including measures  to identify future risks."  

4.      Credit

Companies that qualify for remediation credit by meeting these conditions may obtain from the Fraud Section, FCPA Unit, up to a 50% reduction off the bottom end of the Sentencing Guidelines fine range and generally should not require appointment of a monitor if the company has, at the time of the resolution, implemented  an effective compliance program. Furthermore, where  the same conditions are met, the FCPA Unit will  consider a declination of prosecution.

If the company does not self-report, but meets all of the other  criteria of the program, the FCPA Unit may provide partial mitigation credit and up to a 25% reduction off the bottom end of the Sentencing Guidelines fine range.

IV.   Conclusion

The Pilot Program "is intended to encourage companies to disclose FCPA misconduct to permit the prosecution of individuals whose criminal wrongdoing might otherwise never be uncovered by or disclosed to law enforcement. Such voluntary self-disclosures thus promote aggressive enforcement of the FCPA and the investigation and prosecution of culpable individuals." Whether it accomplishes this remains to be seen.