On May 9, 2018, the US Department of Justice (DOJ) took another step towards encouraging enforcement authorities to structure their corporate investigations in a more global and comprehensive fashion from day one. Coming on the heels of the 2015 Yates Memorandum, which emphasizes individual liability in DOJ prosecutions, and the 2017 FCPA Corporate Enforcement Policy, which encourages US entities to voluntarily self-disclose corporate wrongdoing, US Deputy Attorney General Rod Rosenstein announced a new policy that encourages coordination among DOJ components and enforcement agencies when imposing multiple penalties on a company for the same conduct.

The new policy is intended to "discourage disproportionate enforcement of laws by multiple authorities" by instructing DOJ components to coordinate with one another and other enforcement agencies to avoid "piling on" fines and sanctions that arise from the same misconduct. The new policy encourages intra-and inter-agency coordination in order to "detect sophisticated financial fraud schemes" while simultaneously striving to "achieve efficiencies and limit unnecessary regulatory burdens." Companies that operate in heavily regulated industries are often accountable to multiple enforcement authorities and are vulnerable to heightened cooperation between domestic and international enforcement bodies.

This creates a risk that the companies may be subjected to multiple and repeated punishments that exceed what is necessary to rectify violations and deter future misconduct. The DOJ's new policy, therefore, seeks to protect corporations from incurring excessive and unfair penalties that arise out the same misconduct.

The new coordination policy

The new coordination policy is comprised of four key elements

  • First, the policy emphasizes that the federal government's criminal enforcement authority should not be used as a tool to extract a larger settlement from a company in a civil case.
  • Second, the policy directs DOJ attorneys in different components to coordinate with one another to secure an overall equitable result. The new policy adds additional resources to continue these efforts, including the assignment of additional resources to the DOJ's Office of International Affairs and the creation of a new Working Group on Corporation Enforcement and Accountability, which will be tasked with making internal recommendations about white collar crime and compliance issues.
  • Third, the policy reaffirms DOJ's commitment to coordinate with other federal, state, local and foreign enforcement authorities in order to resolve investigations into the same misconduct.
  • Fourth, the policy directs DOJ attorneys to consider whether multiple penalties serve the interests of justice. Here, however, Deputy Attorney General Rosenstein cautioned that cooperating with other agencies would not substitute for cooperating with the DOJ and that the department would "not look kindly" upon companies that approached the DOJ only after making inadequate disclosures to secure lenient penalties from other agencies or governments.

Conclusion

For corporations that maintain cross-border operations, Deputy Attorney General Rosenstein in announcing the new policy emphasized that the DOJ would work closely with law enforcement partners in the United States and abroad to avoid duplicative proceedings in order to achieve reasonable and proportionate outcomes in major corporate investigations. Historically, attorneys have advised their clients to focus their internal investigations on unearthing and remediating the source of the misconduct identified by the primary enforcement agency.

However, as the DOJ continues to emphasize "greater transparency and consistency in corporate enforcement," its increased focus on cross-border cooperation among enforcement agencies puts a premium on strategically considering at the inception of an investigation how best to identify and remediate misconduct across jurisdictions. This approach will help achieve a global resolution that takes advantage of the DOJ's new policy. Now more than ever, counsel facing these new challenges must be able to respond when clients ask on the first day of an investigation, "Tell me how I can best mitigate my risk to ensure a favorable outcome?" 

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