On Wednesday, the Department of Justice (DOJ) premiered a new policy regarding Foreign Corrupt Practices Act (FCPA) enforcement. Deputy Attorney General Rod Rosenstein, in a speech, called it the FCPA Corporate Enforcement Policy and stated that it is now “incorporated into the United States Attorneys’ Manual.” The new Policy has four sections: 9-47.100 Introduction; 9-47.110 Policy Concerning Criminal Investigations and Prosecutions of the Foreign Corrupt Practices Act; 9-47.120 FCPA Corporate Enforcement Policy and 9-47.130 Civil Injunctive Actions. I see the document Policy as a step forward for compliance.
Over the next several blog posts, I will review this new FCPA Corporate Enforcement Policy in detail. Today I want to introduce it and consider it in the context of the remarks made by Rosenstein. The thing that struck me was the DOJ’s commitment to moving forward not just the concept of compliance but compliance programs and the compliance profession. Rosenstein recognized “The United States plays a central role in the worldwide fight against corruption, and we serve as a role model. Following our lead, many other countries have joined America by implementing their own anti-corruption laws. Those laws do not just encourage good business. They promote good government.”
Yet FCPA enforcement is more than simply about good government. Just as the Saudi Arabian government explained the economic costs of bribery and corruption to its country, Rosenstein spoke about the costs to business from those who try to game the system, obtaining an unfair advantage through payment of bribes and engaging in corruption. He cited back to the April speech by Attorney General Sessions who spoke about other negative aspects of corruption including “increased prices, substandard products and services, and reduced investment.” Finally, Rosenstein spoke to the basic need for businesses to operate honestly and ethically. This is both true for US companies and the greater international business community.
Internationally, he noted “the Organization for Economic Co-operation and Development adopted an Anti-Bribery Convention in 1997. That convention fuels the growing international rejection of corruption. Forty-three nations participate in the OECD Anti-Bribery Convention. The agreement establishes legally binding standards. Member countries are required to adopt laws that criminalize bribery of foreign public officials in international business transactions.” He also spoke about the continuing cooperation among international authorities in both investigation of bribery and corruption and of enforcement against wrong-doers.
Obviously, the prime job of the DOJ is to enforce our laws. They do so in the FCPA world with vigor, honor and upholding the highest values of the rule of law. The DOJ has embraced the role of encouraging companies to not only follow the law through rigorous enforcement but with incentives to operate best practices compliance program. Corporate America should and does see the DOJ as a valued partner in supporting “the rule of law, which establishes and safeguards a vibrant economic marketplace for your products and services.”
Over the past several years, the DOJ has consistently provided “incentives for companies to engage in ethical corporate behavior.” In the context of an enforcement action, “That means fully cooperating with government investigations, and doing what is necessary to remediate misconduct – including implementing a robust compliance program. Good corporate behavior also means notifying law enforcement about wrongdoing.” This was one of the goals in creating the FCPA Corporate Enforcement Policy. But more than simply having such a policy, Rosenstein desired transparency and predictability. He stated, “I want the Department to issue concise policy statements. Historical background and commentary should go in a cover memo or a press release. In most instances, the substance of a policy should be in the United States Attorneys’ Manual, and it should be readily understood and easily applied by busy prosecutors.”
The compliance professional reviewing the new FCPA Corporate Enforcement Policy will certainly be heartened with the language around best practices compliance program, including the specific incorporation of the 2012 FCPA Guidance, with the Ten Hallmarks of an Effective Compliance program directly into the section on remediating compliance programs. This section has taken some of the most robust portions of the FCPA Pilot Program and incorporated them directly into the new FCPA Corporate Enforcement Policy. This will drive a corporate compliance function more to the front and center of an organization going forward.
The section on remediation, coupled with Rosenstein’s remarks, demonstrates how significant the compliance profession and compliance practitioner is now and will be going forward. This new FCPA Corporate Enforcement Policy puts more pressure on companies to get compliance right in a best practices, effective compliance program. It has become far more than a “you can pay now or later and only if you get caught mentality” which is still articulated by some today. The DOJ has made clear that it views part of its role in anti-corruption enforcement to more than encourage compliance but to move to partnering with compliance practitioners to design, create and implement best practices compliance programs.
Yet is more than written proscriptions with policies and procedures. Rosenstein ended with comments that spoke directly to doing business ethically. He concluded, “Companies can protect themselves by exercising caution in choosing their business associates and by ensuring appropriate oversight of their activities. There is an ancient proverb that counsels, “If you want to know a person’s character, consider his friends.” My advice is to make sure that you can stand proudly with the company you keep.”
Focus on the new FCPA Corporate Enforcement Policy will be primarily on enforcement concepts and issues. Yet I see it as one more step by the DOJ to raise up the importance, prestige and stature of compliance programs. When the Deputy Attorney General talks about corporations partnering with the DOJ to fight the global scourge of bribery and corruption, it drives home the importance of doing compliance through the operationalization of a compliance program into the very DNA of an organization. Bravo to the DOJ.
The new FCPA Corporate Enforcement Policy is a huge win for the compliance profession. Bravo to the DOJ.Click to tweet
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© Thomas R. Fox, 2017