Page 65 - U.S. FOREIGN CORRUPT PRACTICES ACT

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

reputation, ensures investor value and confidence, and effectiveness of the company’s compliance
reduces uncertainty in business transactions, program, and the nature of the company’s remedial
and secures a company’s assets. 318 A company’s actions. 322 DOJ also considers the U.S. Sentencing
compliance and ethics program can help prevent, Guidelines’ elements of an effective compliance
detect, remediate, and report misconduct, including program, as set forth in § 8B2.1 of the Guidelines.

FCPA violations, where it is well-constructed, These considerations reflect the recognition
effectively implemented, appropriately resourced, that a company’s failure to prevent every single
and consistently enforced. violation does not necessarily mean that a
In addition to considering whether a particular company’s compliance program was
company has self-reported, cooperated, and not generally effective. DOJ and SEC understand
taken appropriate remedial actions, DOJ and SEC that “no compliance program can ever prevent all

also consider the adequacy and effectiveness of a criminal activity by a corporation’s employees,” 323
company’s compliance program at the time of the and they do not hold companies to a standard
misconduct and at the time of the resolution when of perfection. An assessment of a company’s
deciding what, if any, action to take. In criminal compliance program, including its design and
resolutions, the compliance program factors good faith implementation and enforcement, is an

into three key areas of decision: (1) the form of important part of the government’s assessment of
resolution or prosecution, if any; (2) the monetary whether a violation occurred, and if so, what action
penalty, if any; and (3) the compliance obligations should be taken. In appropriate circumstances,
to be included in any corporate criminal resolution DOJ and SEC may decline to pursue charges against
(e.g., whether a compliance monitor is appropriate a company based on the company’s effective
and the length and nature of any reporting compliance program, or may otherwise seek to

obligations). 319 For example, compliance program reward a company for its program, even when that
adequacy may influence whether or not charges program did not prevent the particular underlying
should be resolved through a guilty plea, deferred FCPA violation that gave rise to the investigation. 324
prosecution agreement (DPA) or non-prosecution DOJ and SEC have no formulaic requirements

agreement (NPA), as well as the appropriate regarding compliance programs. Rather, they
length of any DPA or NPA, or the term of employ a common-sense and pragmatic approach
corporate probation. 320 As discussed above, SEC’s to evaluating compliance programs, making
Seaboard Report focuses, among other things, on inquiries related to three basic questions:
a company’s self-policing prior to the discovery
• Is the company’s compliance program well
of the misconduct, including whether it had designed?

established effective compliance procedures. 321 • Is it being applied in good faith? In other
words, is the program adequately resourced
Likewise, three of the ten factors set forth in DOJ’s and empowered to function effectively?
Principles of Federal Prosecution of Business • Does it work in practice? 325
Organizations relate, either directly or indirectly, to
This guide contains information regarding
a compliance program’s design, implementation,
some of the basic elements DOJ and SEC consider
and effectiveness, including the pervasiveness of
when evaluating compliance programs. Although
wrongdoing within the company, the adequacy

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