United States: FCPA: DOJ May Be Listening, But It Is Not Changing Its Approach

Last Updated: December 13 2010
Article by Daniel P. Levison, Kevin Roberts and Sherry Yin

As we wrote in our November 19, 2010 FCPA Client Alert, Assistant Attorney General Lanny Breuer, Criminal Division, Department of Justice, recently acknowledged that "some practitioners and others would like to see, in the FCPA area, an amnesty program similar to the one that exists in the realm of antitrust."1 In a hotel ballroom filled with FCPA defense attorneys and in-house counsel, Mr. Breuer stated that "we listen to considered suggestions of this kind." But on November 30, 2010, in front of the Senate Judiciary Committee's Subcommittee on Crime and Drugs, Acting Deputy Assistant Attorney General Greg Andres rejected the possibility of an amnesty program for FCPA cases.

Although seemingly inconsistent with Mr. Breuer's suggestion that DOJ was willing to consider an amnesty program, Mr. Andres's remarks at the Senate Hearing reinforced Mr. Breuer's basic theme: the DOJ's aggressive enforcement of the FCPA is here to stay irrespective of extensive criticism.

For months, critics of the recent approach to FCPA enforcement have urged regulators to adopt a leniency program modeled after one effectively used by DOJ's Antitrust Division. Under the Antitrust Division's Corporate Leniency Program, the first member of a price-fixing cartel that self-reports the violation—and agrees to cooperate fully with the government—can receive a free pass. The government's rationale for granting amnesty is that, without a member of the cartel coming forward, it may be difficult or impossible for the government to discover and prosecute the illegal conduct.

Similarly in the FCPA context, advocates of a leniency program argue that, in the absence of self-disclosure, the government is not as likely to discover the FCPA violation.2 International bribery investigations are lengthy and expensive, and the government has limited resources. The government often relies on companies to conduct their own internal investigations and report their findings. Critics of the government's aggressive FCPA enforcement argue that companies should get amnesty, or the very least leniency, for self-reporting violations that regulators are otherwise unlikely to find.

Advocates of an FCPA amnesty program also point to the detrimental effects an FCPA conviction can have on a company, including debarment from federal programs.3 By rewarding self-disclosure and cooperation, companies could be spared potentially devastating outcomes while still remediating and addressing the improper conduct. And, giving the company amnesty would not prevent the government from pursuing the individuals who perpetuated the illegal conduct.

Moreover, as one critic pointed out, an amnesty program would be a significant improvement to FCPA enforcement that regulators could implement quickly and without protracted legislative action. "[The Justice Department] could do it tomorrow" by making a new policy.4

Despite the advocacy for an amnesty program, Mr. Andres made clear that DOJ is not interested in making changes to its current enforcement practices. Mr. Andres stated that DOJ does not believe "that immunity is appropriate, just as [it] do[esn't] believe that a bank robber could get immunity for disclosing that he robbed a bank."5 According to Mr. Andres, the fact that a company self-discloses a violation does not merit the company "getting a pass for those crimes."

Mr. Andres also pointed out that companies already receive favorable treatment for self-reporting violations. According to Mr. Andres, DOJ has traditionally encouraged companies to self-report, promising credit for cooperation, and DOJ officials consistently assert that "a company that comes forward on its own will see a more favorable resolution than one that doesn't."6 As a result, Mr. Andres said that, given the credit self-reporting companies already receive from DOJ, he was "not sure there's a need for a formal amnesty program."

However, just how much "credit" a company receives by self-reporting under the current enforcement regime is subject to vigorous debate. There is a widespread belief among practitioners that a company may not benefit at all by having reported the violation and, in some instances, it is in fact worse off. An amnesty program would at least give companies a concrete and transparent incentive to self-disclose a violation, governed by clear "rules of the road."

CONCLUSION

DOJ's rejection of the amnesty program highlights two significant trends in FCPA enforcement:

One, it leaves companies in the same uncertain and uncomfortable position of deciding whether self-reporting is beneficial. The decision about whether to self-report is a difficult one, and the analysis needs to take into consideration more than just DOJ's statements about cooperation credit currently available. The decision is necessarily informed by the specific facts and circumstances, and should be made only after consideration of all relevant facts, in consultation with expert counsel.

Two, the government will continue its heightened prosecution of FCPA cases regardless of mounting criticism. While the government may be "willing to listen" to constructive criticism and suggestions, thus far it has not been convinced that any change to its increasingly aggressive enforcement policies is warranted.

Footnotes

1 Please see our Client Alert from November 19, 2010, available at http://www.mofo.com/files/Uploads/Images/101118-FCPA-Enforcement.pdf . A transcript of the speech is available at http://www.justice.gov/criminal/pr/speeches/2010/crm-speech-101116.html .

2 See transcript from October 27, 2010 Legal Reform Summit, sponsored by U.S. Chamber of Commerce.

3 See Testimony of Michael Volkov before the Subcommittee on Crime and Drugs, Committee on the Judiciary, United States Senate, November 30, 2010, available at http://judiciary.senate.gov/hearings/hearing.cfm?id=4869.

4 See id.

5 See Testimony of Deputy Assistant Attorney General Greg Andres before the Subcommittee on Crime and Drugs, Committee on the Judiciary, United States Senate, November 30, 2010, available at http://judiciary.senate.gov/hearings/hearing.cfm?id=4869 .

6 See transcript from Lanny Breuer's November 2010 speech, available at http://www.justice.gov/criminal/pr/speeches/2010/crm-speech-101116.html .

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions