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The U.S. Department of Justice (DOJ) has decided to extend its FCPA Pilot Program, designed to encourage companies to self-report evidence of bribery and corruption, until it feels able to judge the program’s effectiveness.
The Pilot Program, which was launched in April 2016 and had been due to end this month, targets companies that have uncovered evidence of a breach of FCPA regulations. If a company voluntarily self-discloses this misconduct to the DOJ, fully cooperates with the investigation, and makes the necessary improvements to its compliance processes, it is “eligible to receive outright declination or reduced fines and penalties.” The program aims to promote “greater accountability for individuals and companies that engage in corporate crime.”
The impact of the Pilot Program is shown by two contrasting non-prosecution agreements finalized within a month of each other at the turn of the year, according to an article in The New York Law Journal. In January 2017, 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. While in December 2016, manufacturing firm General Cable received a 50% reduction after voluntarily disclosing more than a decade of FCPA violations.
The decision to extend the pilot was 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.
In recent years, more countries have introduced legislation to encourage 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 $621 million settlement with Rolls-Royce earlier this year. In June, new legislation called Sapin II will be introduced in France to allow companies to enter into negotiated settlements. Last year, Australia launched a public consultation paper on whether to introduce DPAs, and 14 of 16 responses from stakeholders came back in favor of the proposal. Whether or not the U.S. decides to make the Pilot Program permanent, there is a clear legislative trend towards self-reporting elsewhere in the world.
In his speech, 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.” Earlier this year, some commentators expressed concern that the election of President Trump might lead to 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. criminalizes 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.”
Mr Blanco also said 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 cooperate 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.