Page 60 - U.S. FOREIGN CORRUPT PRACTICES ACT

A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.

decline prosecution, as it did in several cases in To be eligible for the benefits of the CEP,
which senior management engaged in the bribery including a declination, the company is required to
scheme. 301 pay all disgorgement, forfeiture, and/or restitution
If a criminal resolution is appropriate, resulting from the misconduct at issue. 304
where a company that voluntarily self-discloses, The CEP also provides definitions of the terms

fully cooperates, and timely and appropriately “voluntary self-disclosure,” “full cooperation,” and
remediates, DOJ will accord, or recommend to a “timely and appropriate remediation.” By outlining
sentencing court, a 50% reduction off of the low end in the Justice Manual how DOJ defines these terms
of the U.S. Sentencing Guidelines (Guidelines) fine and the benefits that will accrue to a company that
range, except in the case of a criminal recidivist; engages in such behavior, companies can make an
and generally will not require appointment of a informed decision as to whether they believe such

monitor if a company has, at the time of resolution, behavior is in their best interest. Of course, if a
implemented an effective compliance program. 302 company chooses not to engage in such behavior,
The CEP also recognizes the potential benefits and DOJ learns of the misconduct and establishes
of corporate mergers and acquisitions, particularly sufficient proof for prosecution, the company
when the acquiring entity has a robust compliance should not expect to receive any benefits outlined

program in place and implements that program as in the CEP or to otherwise receive leniency. 305
quickly as practicable at the merged or acquired The CEP applies only to DOJ, and does not bind
entity. Accordingly, where a company undertakes a or apply to SEC. 306 The CEP and the declinations
merger or acquisition, uncovers misconduct by the that have been announced pursuant to it are posted
merged or acquired entity through thorough and on DOJ’s website. 307 Three such cases are as follows:
timely due diligence or, in appropriate instances,
CEP Declination Example 1
through post-acquisition audits or compliance
In 2018, DOJ declined prosecution of a privately
integration efforts, and voluntarily self-discloses the
held company based in the United Kingdom that
misconduct and otherwise takes action consistent
manufactures and sells equipment used to detect
with the CEP, there will be a presumption of a
earthquakes and other seismic events. The
declination in accordance with and subject to the
company had voluntarily self-disclosed to DOJ
other requirements of the CEP. In appropriate cases,
that it had made numerous payments amounting
an acquiring company that discloses misconduct
to nearly $1 million to the director of a Korean
may be eligible for a declination, even if aggravating
government-funded research center. Following the
circumstances existed as to the acquired entity.
disclosure of these payments, DOJ indicted the
Where a company does not voluntarily
director and in July 2017 tried and convicted him
self-disclose the misconduct, but nevertheless
in the Central District of California of one count of
fully cooperates, and timely and appropriately
money laundering in violation of 18 U.S.C. § 1957.
remediates, the company will receive, or the
The director was subsequently sentenced to 14
Department will recommend to a sentencing court,
months in prison in October 2017.
up to a 25% reduction off of the low end of the
The company received a declination under
Guidelines fine range. 303

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