by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Robert A. Cohen, Neil H. MacBride, Paul J. Nathanson, Linda Chatman Thomsen, Kenneth L. Wainstein, and Patrick S. Sinclair
On November 20, 2019, the Department of Justice (“DOJ”) modified its Corporate Enforcement Policy to clarify what level of disclosure is expected from companies in the early stages of an investigation. In short, the Policy reaffirms that companies should disclose known information—and the individuals involved—at the outset of investigations, while recognizing companies may not yet know all the relevant facts or individuals at that time.
The Corporate Enforcement Policy, first introduced as a pilot program concerning FCPA-related investigations in April 2016 and formalized in November 2017 by then–Deputy Attorney General Rod Rosenstein, offers incentives to companies that voluntarily disclose misconduct, timely remediate, and cooperate fully with the DOJ. Absent certain aggravating circumstances, a company following these steps can receive a declination assuming it fully disgorges any associated profits.[1] In March 2018, DOJ extended the Corporate Enforcement Policy beyond FCPA violations as nonbinding guidance concerning any corporate investigation. Since the Policy was introduced, DOJ has issued thirteen public FCPA declinations under its terms.[2]
The new language clarifies the extent of information expected in self-disclosures and acknowledges that companies often have limited knowledge at the preliminary stages of investigations.
- A new footnote to the self-disclosure provision states that “the Department recognizes that a company may not be in a position to know all relevant facts at the time of a voluntary self-disclosure, especially where only preliminary investigative efforts have been possible.”[3] A company in this position should “make clear that it is making its disclosure based upon a preliminary investigation or assessment of information,” but still fully disclose “the relevant facts known to it at that time.”[4] The same applies to the disclosure of individuals involved, with companies likewise directed to provide relevant facts about any individuals known “at the time of the disclosure.”[5] The language thus distinguishes between information provided during the disclosure phase versus what might be required as part of “cooperation” as dictated by the Yates Memo.
- The definition of “full cooperation” now advises cooperating companies to notify DOJ of evidence not in its possession of which the company “is aware,” no longer extending this to evidence of which the company “should be” aware.[6]
These changes come on the heels of other recent developments in DOJ’s approach to corporate enforcement, including a decision in March not to prohibit companies from using “disappearing” messaging services like WhatsApp in order to receive full credit for remediation.[7]
The revised policy is available here. A redline comparison between the old and new policies can be found here (PDF: 102 KB).
Footnotes
[1] See U.S. Dep’t of Justice, Justice Manual § 9-47.120 (Nov. 2019) (PDF: 26.8 KB).
[2] See U.S. Dep’t of Justice, Corporate Enforcement Policy Declinations (Sept. 26, 2019).
[3] Justice Manual § 9-47.120 at n. 1 (PDF: 26.8 KB).
[5] Justice Manual § 9-47.120(3)(a) (PDF: 26.8 KB).
[6] Justice Manual § 9-47.120(3)(b) (PDF: 26.8 KB).
[7] See Justice Manual § 9-47.120(3)(c) (modified this year to discourage, rather than prohibit, “ephemeral messaging platforms”) (PDF: 26.8 KB).
Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Robert A. Cohen, Neil H. MacBride, Paul J. Nathanson, Kenneth L. Wainstein, and Patrick S. Sinclair are partners and Linda Chatman Thomsen is counsel at Davis Polk & Wardwell.
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