Freer Pass on Foreign Corruption Enforcement? Changes to FCPA Compliance

Welcome to the November 2019 edition of our newsletter!  In this issue, we’ll examine changes to enforcement of the Foreign Corrupt Practices Act, or FCPA, specifically the leniency provision.

Just Most of the Facts: Recent Changes to FCPA Enforcement Create Flexibility for Companies

Since 2016, the U.S. Justice Department has been adapting its enforcement of the FCPA to foster more cooperation from companies and bring about improvements to their internal compliance programs.  Among those provisions was an assumption that the department would decline to prosecute if the company cooperates and “self-discloses” information about the violations.  But while earlier revisions to the leniency  program emphasized that the company must disclose “all relevant facts known to it,” the more recent revisions note 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.”

This seemingly minor change has significant implications for both internal investigators and those called in to assist from the outside when appropriate.  Another recent change, from this past March, was the allowance of so-called disappearing message applications by employees of subject companies, which were previously prohibited if companies wanted to be eligible for leniency consideration.  The department did, however, suggest that companies implement internal controls over the use of such applications.

Taken together, these changes have affected the investigative landscape for FCPA compliance, allowing greater time for the subject company to collect facts on its end – whether from within the company or elsewhere – while also freeing up a lane in which technologically savvy fraudsters can continue to operate.  In attempting to create an environment of greater cooperation and less confrontation, the Justice Department is shifting the sands of FCPA compliance, and clients are better prepared when they are made aware of these changes so they can respond accordingly.