DOJ and SEC officials have recently gone on record that January's impending change in administration will not necessarily mean policy changes for their respective agencies, stating that they expect FCPA enforcement against individuals to remain a priority under the Trump administration.
Deputy Attorney General Sally Yates' speech, delivered on November 30th at the International Conference on the Foreign Corrupt Practices Act, along with one by SEC Enforcement Director Andrew Ceresney, mirrored the topics she addressed in her September 2015 memorandum encouraging prosecutors to focus on individuals concurrently with any corporate investigation, and placing new cooperation and reporting requirements on companies. Yates speculated that "in coming months and years, when companies enter into high-dollar resolutions with the Justice Department, you'll see a higher percentage of those cases accompanied by criminal or civil actions against the responsible individuals." Yates believes that individual prosecution, and the threat of going to jail, is the best way to deter individual conduct.
In addition to pursuing individual prosecutions, the agencies will continue to hold companies to a high standard of reporting and cooperation. Ceresney remarked that "companies are gambling if they fail to self-report FCPA misconduct to [the SEC]," as the SEC limits the cooperation credits companies can receive if they do not self-report or provide full cooperation during an investigation. In light of this enduring pressure for companies to monitor and report, the DOJ has set up an online resource focused on the individual accountability policy. The website links to the Yates memo and has a frequently-asked-questions section to help guide corporate behavior.
Best Practices for Corporations
Though no one knows what changes the Trump administration may bring, large-scale policy changes in enforcement policy tend to happen slowly. The Yates memo and its policy implications will probably remain in place under President-elect Trump, at least for the foreseeable future. So, for companies to fulfill their responsibilities and avoid FCPA enforcement actions at the individual and corporate levels, they need to have effective anti-corruption programs in place. These programs should include anti-corruption and anti-bribery policies, training, compliance hotlines, monitoring mechanisms, and internal audits. Stand-alone anti-corruption and anti-bribery audits are especially crucial and should be completed by an experienced, trained auditor.
These audits are designed to test the effectiveness of the company's anti-bribery and anti-corruption control systems and procedures in order to (1) identify potential corruption violations or red flags and (2) remediate potential issues. Compliance audits should be conducted in accordance with a predetermined set of procedures and should focus on areas of elevated corruption risk. Any uncovered potential violations should be reported to a legal or compliance professional for further investigation.
Venable has experience creating anti-bribery and anti-corruption programs. Please let us know if you have any questions about how your company can most effectively protect itself – and its executives – against FCPA prosecution.