On February 22, 2023, The U.S. Department of Justice (DOJ) issued its country-wide Corporate Self-Disclosure Policy for all U.S. attorney’s offices (USAO), effective immediately. The policy provides “clear and predictable” benefits for a Voluntary Self-Disclosure (VSD) designed to encourage companies to disclose potential violations voluntarily. The policy comes months after Deputy Attorney General Lisa Monaco instructed each component of the DOJ that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there is no formal written policy to incentivize self-disclosure, draft and publicly share such a policy (the “Monaco Memo”).
The policy states that disclosure constitutes a VSD of misconduct if:
- It is made voluntarily by the company, not due to a preexisting obligation to disclose (e.g., according to regulation, contract, or prior resolution);
- The disclosure is made to the USAO within a reasonably prompt time after becoming aware of the misconduct (burden on the company to show timeliness) and before an imminent threat of government investigation, public disclosure, or otherwise known to the government; and
- The disclosure includes all relevant facts known at the time of disclosure.
- The policy notes that if a company conducts an internal investigation, the USOA expects updates as the investigation progresses.
Whether a company meets these criteria is based on the sole discretion of the USAO. If the USAO determines the company’s disclosure meets the policy criteria for a VSD, fully cooperates, and implements the appropriate remediation for the misconduct, the USAO:
- Will not seek a guilty plea without aggravating factors (e.g., a threat to national security, deeply pervasive throughout the company, or involving current executive management). Instead, the resolution could include a declination, non-prosecution, or deferred prosecution agreement.
- May choose not to impose a criminal penalty, and in any event, “will not impose a criminal penalty that is greater than 50% below the low end of the U.S. Sentencing Guidelines fine range.”
- Will not require the imposition of an independent compliance monitor “if the company demonstrates at the time of resolution that it has implemented and tested an effective compliance program.”
There has long been a VSD policy for environmental crimes. Since 1991, the Environmental Crimes Section (“ECS”) of the Environment and Natural Resources Division (“ENRD”) has had a VSD policy designed to encourage voluntary disclosure of potential environmental violations. Under the revisions called for by the Monaco Memo, that polic y must be reviewed and revised. While some aspects of the 1991 memo will no doubt remain, the new ECS policy on VSD is likely to incorporate the increasing expectations of the government in reviewing business compliance efforts when making prosecution decisions.
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