Publication
Government Investigations in Singapore 2025
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
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Publication | April 2016
On April 5, 2016, the US Department of Justice (“DOJ”) announced a new Foreign Corrupt Practices Act (“FCPA”) enforcement pilot program with the goal of motivating companies to voluntarily self-disclose FCPA-related violations, to fully cooperate with the DOJ during investigations, and to promote greater accountability for individuals and corporations who violate the FCPA and related laws. Under the program, a company that: (1) voluntarily self-discloses a suspected violation; (2) fully cooperates with the DOJ on all aspects of the investigation throughout the process; and (3) implements the appropriate remedial measures, can earn up to a 50% reduction from the bottom of the US Sentencing Guidelines (“USSG”) fine range. Additionally, a company that meets the program’s requirements will generally not be required to appoint a monitor. The program is in effect as of April 5, 2016 and will run for one year and applies only to the DOJ’s Fraud Section, not individual U.S. Attorney’s Offices. After the year, the DOJ will assess how successful the pilot program was, whether it should be continued, and if so, whether there should be any changes to the program.
Satisfying all of the elements of the pilot program is no easy task – many of the requirements are onerous. Moreover, there is no guarantee that the DOJ will afford the maximum cooperation credit even if a company complies with all of the elements.
The launching of this pilot program comes against the backdrop of significant debate about the benefits of self-disclosing potential FCPA violations to the DOJ. While DOJ has consistently stated that it rewards self-reporting and cooperation, there has been a lack of clarity and predictability concerning the tangible benefits of doing so. Andrew Weissmann, Chief of the DOJ Fraud Section, which oversees and manages FCPA investigations and prosecutions, said that this pilot program “draws a clear distinction between credit that you can be eligible for voluntary self-disclosure as opposed to companies that may decide to wait to see if they get caught, and then cooperate.” His comments suggest that the DOJ is attempting to create objective incentives for companies to self-report potential FCPA violations, to fully cooperate in any resulting investigation, and to implement appropriate remedial measures.
The DOJ has long espoused that voluntary self-disclosure of suspected violations of anti-corruption laws could encourage prosecutors to resolve a potential violation through a Deferred Prosecution Agreement (“DPA”), Non-Prosecution Agreement (“NPA”), or even a declination. A voluntary self-disclosure must: (1) qualify under the USSG as occurring “prior to an imminent threat of disclosure or government investigation”;1 (2) be made “within a reasonably prompt time after becoming aware of the offense,” with the burden being on the company to show timeliness; and (3) include all relevant facts known to it about the violation, including the involvement of individuals. The DOJ will not consider a disclosure as being voluntary if the company was required to make the disclosure by law, agreement or contract.
Many of the pilot program’s requirements for full cooperation are not surprising, such as the need to preserve, collect and disclose relevant documents, and to provide the DOJ with timely updates. Not all of the requirements, however, are so straightforward. For example, full cooperation entails, among other things:
If the company believes that it is impossible to comply with any of the pilot program’s requirements, such as the existence of conflicting foreign laws, the company has the burden of proving that impossibility. The DOJ will “closely evaluate the validity” of any such claims.
If a company meets the first two requirements, then the DOJ will assess the remedial measures that the company took. While some aspects of what the DOJ expects in a compliance program have been addressed in prior FCPA settlements, the pilot program provides some additional guidance on certain specific issues. When assessing a company’s remedial measures and its compliance program, the DOJ will attempt to determine whether:
A company that meets each of the three requirements (voluntary self-disclosure, cooperation, remediation) may receive a 50% reduction from the bottom of the Sentencing Guidelines fine range and may not be required to appoint an independent monitor. Further, even if a company does not meet the requirements for voluntarily self-disclosure, but nevertheless fully cooperates and adopts appropriate and timely remediation, the company can still qualify for up to a 25% reduction from the bottom of the Sentencing Guidelines range.
While the DOJ has for years asserted that there are benefits to self-disclosure, cooperation, and appropriate remediation, the pilot program now attempts to quantify such benefits. However, even though the program may set forth potential benefits, the DOJ still retains significant discretion in determining whether a company has satisfied the numerous onerous elements of the pilot program and how much credit to award. In determining whether to attempt to take advantage of the pilot program, companies must consider several variables, including:
1 U.S. Sentencing Guidelines § 8C2.5(g)(1).
2 See our summary of the memorandum [http://www.nortonrosefulbright.com/knowledge/publications/132108/doj-announces-new-policy-on-prosecuting-corporate-individuals]
3 http://www.nortonrosefulbright.com/knowledge/publications/134684/a-brave-new-world-key-factors-in-agreeing-a-uk-dpa-and-insight-into-global-settlements
Publication
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
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