Page 63 - U.S. FOREIGN CORRUPT PRACTICES ACT

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

Criminal Cases a downward departure in certain circumstances.
Under DOJ’s Principles of Federal Prosecution Chapter 8 of the Sentencing Guidelines, which
of Business Organizations and the CEP, federal governs the sentencing of organizations, takes into

prosecutors consider whether the company account an organization’s remediation as part of
made a voluntary and timely disclosure as well an “effective compliance and ethics program.” One
as the company’s willingness to provide relevant of the seven elements of such a program provides
information and evidence and identify relevant that after the detection of criminal conduct, “the
actors inside and outside the company, including organization shall take reasonable steps to respond
senior executives. appropriately to the criminal conduct and to prevent

In addition, prosecutors may consider a further similar criminal conduct, including making
company’s remedial actions, including efforts any necessary modifications to the organization’s
to improve an existing compliance program compliance and ethics program.” 312 Having an
or appropriate disciplining of wrongdoers. 309 effective compliance and ethics program may lead

A company’s remedial measures should be to a three-point reduction in an organization’s
meaningful and illustrate its recognition of the culpability score under § 8C2.5, which affects the
seriousness of the misconduct, for example, fine calculation under the Guidelines. Similarly,
by taking steps to implement the personnel, an organization’s self-reporting, cooperation,
operational, and organizational changes necessary and acceptance of responsibility may lead to fine
to establish an awareness among employees that reductions under § 8C2.5(g) by decreasing the

criminal conduct will not be tolerated. 310 culpability score. Conversely, an organization will
The Principles of Federal Prosecution similarly not qualify for the compliance program reduction
provide that prosecutors may consider an when it unreasonably delayed reporting the
individual’s willingness to cooperate in deciding offense. 313 Similar to § 5K1.1 for individuals,
whether a prosecution should be undertaken and organizations can qualify for departures pursuant

how it should be resolved. Although a willingness to § 8C4.1 of the Guidelines for cooperating in the
to cooperate will not, by itself, generally relieve a prosecution of others.
person of criminal liability, it may be given “serious
Civil Cases
consideration” in evaluating whether to enter into
a plea agreement with a defendant, depending on SEC’s Framework for Evaluating Cooperation by
the nature and value of the cooperation offered. 311 Companies

The U.S. Sentencing Guidelines similarly SEC’s framework for evaluating cooperation
take into account an individual defendant’s by companies is set forth in its 2001 Report of
cooperation and voluntary disclosure. Under Investigation Pursuant to Section 21(a) of the
§ 5K1.1, a defendant’s cooperation, if sufficiently Securities Exchange Act of 1934 and Commission
substantial, may justify the government filing a Statement on the Relationship of Cooperation to

motion for a reduced sentence. And under § 5K2.16, Agency Enforcement Decisions, which is commonly
a defendant’s voluntary disclosure of an offense known as the Seaboard Report. 314 The report,
prior to its discovery—if the offense was unlikely which explained the Commission’s decision not to
to have been discovered otherwise—may warrant take enforcement action against a public company

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