Foreign Corrupt Practices Act ("FCPA") enforcement continues to slowly rebound from pre-pandemic levels. In 2023, the Department of Justice ("DOJ") and the Securities and Exchange Commission ("SEC") resolved 13 corporate FCPA matters for $733 million in penalties, disgorgement, and interest. Meanwhile, the DOJ announced nine FCPA indictments against individuals and, for the third year in a row, the SEC announced no individual FCPA enforcement actions. DOJ and SEC leadership attributed their enforcement statistics to the natural ebb and flow of FCPA cases and the lingering effects of the COVID-19 pandemic, and not due to any lack of focus on FCPA enforcement. Indeed, the Biden administration continues to prioritize anticorruption enforcement, reiterating that fighting corruption is a core national security interest.
This White Paper reviews 2023 FCPA enforcement, the DOJ's enhanced incentives for companies to voluntarily self-disclose FCPA issues, and other changes to corporate criminal enforcement policies and guidance on corporate compliance programs.
THERE WERE FIVE KEY HIGHLIGHTS FROM FCPA ENFORCEMENT IN 2023.
1.
The number of corporate FCPA resolutions rebounded to prepandemic levels, but the total amount of fines imposed has yet to do the same. In 2023, the DOJ and the SEC resolved a total of thirteen corporate FCPA cases, accounting for $733 million in penalties, disgorgement, and interest. Individual FCPA enforcement activity continues to lag pre-pandemic levels. The DOJ announced only nine indictments of individuals and no plea agreements under the FCPA, and SEC resolved no FCPA actions with individuals for the third year in a row.
2.
The slow rebound in FCPA enforcement activity can be attributed to the lingering impact of the COVID-19 pandemic and what may be a general reluctance on the part of companies to voluntarily self-disclose to the DOJ and the SEC. Moving forward, we anticipate that FCPA enforcement statistics will continue to rebound, especially given the backlog of over 90 publicly announced DOJ and/or SEC FCPA investigations in the pipeline.
3.
The DOJ announced important revisions to its corporate enforcement policies. Most significantly, in January, the Criminal Division announced a new and narrow path for companies with what the DOJ considers "aggravating circumstances" to receive a declination of prosecution and decrease in fine amounts.
4.
The DOJ announced additional guidance on corporate compliance programs regarding the use of personal devices and third-party messaging platforms to conduct company business, how companies can use compensation incentives and clawbacks to incentivize compliant behavior, and a focus on the use of data analytics. These steps intend to further the DOJ's goal of elevating standards for corporate compliance programs.
5.
In other news, the DOJ announced an international anti-bribery initiative and issued two new FCPA opinions, President Biden signed a law addressing the demand side of bribery, and the SEC issued a record-breaking $279 million whistleblower award in an FCPA case.
CONTINUED REBOUND IN POST-PANDEMIC FCPA ENFORCEMENT
In 2023, President Biden reiterated that fighting corruption is a core national security interest for his administration, and DOJ and SEC enforcement leadership continued to stress the importance of corporate and individual FCPA enforcement. As outlined below, the number of resolved corporate FCPA enforcement matters rebounded to pre-pandemic levels, while the total fine amount still lags. As they have done in prior years, DOJ and SEC officials stated that there is a healthy backlog of FCPA investigations and predicted "a lot more" enforcement activity in 2024 and beyond, especially given that FCPA cases often take several years to investigate and resolve.
DOJ AND SEC RESOLVED 13 CORPORATE FCPA CASES AND COLLECTED $733 MILLION IN FINES AND PENALTIES IN 2023
In 2023, the DOJ and the SEC resolved a total of 13 corporate FCPA cases, totaling $733 million in penalties, disgorgement, and interest, when considering credits and offsets in one related foreign enforcement action and one company's inability to pay in another enforcement action. The DOJ and the SEC coordinated only two corporate resolutions with each other. The 13 corporate cases are on par with pre-pandemic levels. The total monetary penalties of $733 million assessed in 2023, however, fall far short of the $2.65 billion and $2.78 billion collected by the DOJ and the SEC in 2019 and 2020, respectively.
Meanwhile, coordinated FCPA resolutions with regulators outside the United States dropped from prior years. In 2023, the DOJ and the SEC coordinated only two resolutions with authorities outside the United States. In August, the DOJ and the SEC, in coordination with authorities in Colombia, resolved an FCPA matter resulting in an additional $20.3 million in fines and penalties paid to Colombian authorities, and in mid-December, the DOJ separately agreed to credit a criminal penalty up to a maximum of $22.4 million paid by the resolving company to authorities in Brazil for violations of Brazilian law related to the same conduct. The Brazil investigation is ongoing.
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