Editor’s Note: PCCE has been following the Trump Administration’s new approach to corporate criminal enforcement. In this post, PCCE invited leading white collar practitioners to discuss the new enforcement priorities and revisions to the DOJ Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) outlined by Matthew Galeotti, Head of the Criminal Division for the DOJ, in a speech at the SIFMA Anti-Money Laundering and Financial Crimes Conference on May 12, 2025.

Despite Changes to the CEP, the Cost-Benefit Analysis of Self-Disclosure for Companies Remains Uncertain

by Paul Krieger and Michael Chang-Frieden

The Criminal Division’s revised CEP, as recently announced by Matthew Galeotti, appears to create strong incentives for corporate self-disclosure and cooperation, but does so against a backdrop of Executive Orders, DOJ memoranda, and policy statements by the current Administration that respectively prioritize and de-prioritize certain types of prosecutions. This arguable tension raises at least two considerations relevant to whether the CEP will, in fact, result in increased corporate self-disclosure.

First, as with prior CEP announcements in previous Administrations, it is uncertain how much weight and credibility companies will give the revised CEP.  On the one hand, the DOJ will likely be keen to demonstrate that timely self-disclosure, full cooperation and remediation, and the absence of aggravating circumstances will result in a relatively streamlined declination, especially in “prioritized areas” such as federal program fraud, facilitation of cartels and transnational criminal organizations, and sanctions violations.  On the other hand, companies may be wary of how current, broader dynamics at the Department play into the implementation of, and fidelity to the revised CEP, including: uncertainty about how the new DOJ leadership will actually apply and execute on the Department’s incipient policy announcements, including the revised CEP; the Department’s own resource constraints in light of executive branch-wide hiring freezes and federal prosecutors and law enforcement agents being reassigned from traditional white collar functions to other Administration priorities; and the potential influence that the White House may have on the Department’s corporate investigative and prosecutorial decisions.

Second, companies may hesitate to self-disclose for many of the same reasons that they chose not to self-disclose before the revised CEP: the prospect of civil litigation; reputational harm; and risks from investigations by state and local regulators, as well as foreign governments.  Indeed, in light of the DOJ’s deliberate retreat from certain areas of corporate criminal enforcement, private actors and local, state, and foreign officials may ramp up their own efforts.  Nor is the cost-benefit calculus obvious for companies that may have exposure in areas that the current Administration has de-prioritized (e.g., the FCPA).  On the one hand, self-disclosure of conduct that falls within a de-prioritized area should be even more likely to result in declination, and would guard against potential future policy changes, to the extent that the statute of limitations will not have run by then.  On the other hand, the current Administration’s de-prioritization of certain areas decreases the risks of non-disclosure, and thereby lessens the value of the revised CEP’s incentives within those areas.  In sum, while the revised CEP’s language may be clearer and more definitive, companies’ decisions regarding self-disclosure remain complex, difficult, and likely to evolve as this new landscape becomes clearer.

Paul Krieger is a Co-Founder and Michael Chang-Frieden is an attorney at KKL LLP.

Tariff Evasion and Supply Chain Management

by Sharon Cohen Levin and Andrew J. DeFilippis

It is significant that the DOJ’s recent memo identifies “trade and customs fraud, including tariff evasion” as the Department’s #2 white collar criminal enforcement priority.  Last month, the DOJ also announced that it will prioritize tariff evasion in pursuing civil claims under the False Claims Act (FCA)—a law that allows DOJ to sue those who defraud the government and permits private parties (including whistleblowers) to bring claims and receive a portion of the ultimate recovery.  Although DOJ in the past has occasionally brought criminal prosecutions against companies that commit tariff evasion (charging them with smuggling goods, conspiracy to defraud the United States, or making false statements on customs forms), this has not traditionally been a top criminal enforcement priority.  The recent announcements signal that the administration will aggressively use both civil litigation and law enforcement tools to ensure companies’ compliance with the President’s new trade measures.  And because many of those measures have been imposed under the International Emergency Economic Powers Act, or “IEEPA”—a statute previously used to impose economic sanctions, not tariffs—prosecutors will now be able to use IEEPA’s criminal provisions when investigating and charging tariff evasion or customs fraud.

These announcements also highlight a broader trend: the convergence of compliance risks on companies’ global supply chains.  In addition to tariffs, companies now face an increasingly complex web of supply chain-related regulations, including export controls, anti-forced labor laws, U.S. economic sanctions, anti-boycott laws, and ESG/environmental due diligence laws such as the EU’s pending Corporate Sustainability Due Diligence Directive.  As a result, U.S. and foreign enforcement authorities have sharpened their focus on flows of goods and technology, in addition to funds.  In this environment, companies will need to maintain visibility into their immediate and extended supply chains.  For example, reports have already emerged that some Chinese suppliers to U.S. companies are engaging in schemes to avoid payment of new tariffs—including by undervaluing goods on customs forms, trans-shipping them through third countries to conceal their Chinese origin, and establishing shell or front companies as exporters. These and other schemes threaten to ensnare U.S. companies that do not maintain adequate controls for customs and supply chain compliance.  Much as financial institutions in recent decades allocated substantial resources to establishing and maintaining their Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance programs, all companies should now consider how they can implement effective supply chain compliance programs that addresses current risks.

Finally, these enforcement priorities are likely to affect financial institutions themselves.  For banks and other financial institutions involved in providing financing, payment processing, or other financial services associated with international trade, regulators will expect them to enhance their controls to address tariff evasion schemes and related typologies.  Much like in the context of export controls, agencies like FinCEN could also issue guidance detailing common red flags and best practices for identifying such activity.  Financial institutions would therefore be well-advised to keep abreast of emerging trends reflecting the geographies and industries that present the highest risk of tariff and customs evasion schemes.  As supply chain compliance becomes a top DOJ enforcement priority, financial institutions will increasingly need to conduct due diligence on their customers with an eye towards their roles in the cross border flow of goods and technology. 

Sharon Cohen Levin is a Partner and Andrew J. DeFilippis is Special Counsel at Sullivan & Cromwell LLP. 

Voluntary Disclosure Policy – Look for Test Cases

by David Massey and Jamie Schafer

The Criminal Division’s recent changes to its Corporate Enforcement and Voluntary Disclosure Policy represent a significant change in approach, at least on paper.  Under the revised policy, declinations will now be mandatory, rather than presumptive, for companies that voluntarily self disclose, fully cooperate, and remediate, absent aggravating circumstances.  Companies that find themselves in “near-miss” situations because of timeliness problems or aggravating circumstances may now qualify for non-prosecution agreements (NPAs). 

These changes are clearly intended to reduce companies’ (and defense counsels’) perception of uncertainty concerning the benefits of self-disclosure compared to the costs.  But the devil remains in the details, given the Criminal Division’s wide discretion to decide when “aggravating” or “particularly egregious” circumstances exist. 

The next few public declinations and NPAs will be key.  Companies and defense counsel will watch carefully for details that show whether the policy announcement is meaningful in practice.  The Criminal Division understands this and will be looking for good test cases.  The best candidates will be companies with FCPA or cryptocurrency issues that wish to lock in a good outcome under the current administration. 

David Massey and Jamie Schafer are Partners at Perkins Coie LLP.  Sydney Veatch, an Associate at the firm, contributed to this note. 

Have Reports on the Death of Corporate Enforcement been Greatly Exaggerated?

by Seetha Ramachandran and William C. Komaroff

DOJ’s publication of the Blanche memo in April had many predicting the end of enforcement cases under the Bank Secrecy Act.  After all, DOJ announced that it was disbanding the National Cryptocurrency Enforcement Team, noted that it was not a “digital assets regulator,” and faulted the previous administration for “pursu[ing] a reckless strategy of regulation by prosecution.”  The memo seemed to draw a sharp line between enforcement cases based on what many people think of as “real crimes” (fraud, narcotics, material support for terrorism), and those principally based on regulatory compliance issues, including compliance with registration requirements under the money transmission laws, the Bank Secrecy Act, securities regulations, and regulations administered by the CFTC.

But in reality, that line is not so clear.  The Criminal Division’s new White Collar Enforcement Plan calls out enforcement priorities that include “threats to the U.S. financial system by gatekeepers, such as financial institutions and their insiders that commit sanctions violations or enable transactions by Cartels, TCOs [Transnational Criminal Organizations], hostile nation-states, and/or foreign terrorist organizations.”  For banks and other financial institutions that process millions of transactions a day, a shift from prosecutions that focus on their compliance systems – to those based on the underlying transactions that those compliance systems are designed to weed out – hardly eases the burdens. 

In fact, the new focus on TCOs and material support for foreign terrorist organizations will likely require many institutions to expand their current compliance systems to identify patterns they don’t currently detect.  It may also expand DOJ’s ability to bring enforcement cases because federal statutes broadly define “material support or resources” to mean “any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services.” See 18 U.S.C. § 2339A(b)(1); § 2339B(g)(4).  New material support investigations by DOJ may also open the floodgates to civil litigation – in the financial services area and beyond – under the Anti-Terrorism Act, which provides a civil cause of action to plaintiffs who allege that they are injured by an act of international terrorism and entitles plaintiffs to treble damages and attorney fees.  Although it is yet to be seen how the Criminal Division will carry out its new priorities, the new policies certainly allow ample room for corporate prosecutions.

Seetha Ramachandran and William C. Komaroff are Partners at Proskauer Rose LLP.

The views, opinions and positions expressed within all posts are those of the author(s) alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of the New York University School of Law. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this site and will not be liable any errors, omissions or representations. The copyright of this content belongs to the author(s) and any liability with regards to infringement of intellectual property rights remains with the author(s).