Turkey: DOJ Makes the Pilot Program Permanent and Announces FCPA Corporate Enforcement Policy

The US Department of Justice ("DOJ") had announced a pilot program[1] ("Pilot Program") on April 5, 2016, which created new mitigation opportunities for companies that (i) voluntarily self-disclosed, (ii) cooperated fully, and (iii) took timely and appropriate remedial actions in FCPA matters that fell within the Fraud Section's mandate. The Pilot Program was to remain in effect for 1 year, starting from the day of its announcement. On March 10, 2017, the Acting Assistant Attorney General, Kenneth A. Blanco, announced in a speech that the Pilot Program would continue in full force until the DOJ reached a final decision on whether to extend it, and what revisions, if any, should be made to it.[2] The evaluation period of the Pilot Program ended on November 29, 2017, when Deputy Attorney General Rod Rosenstein announced the new FCPA Enforcement Policy ("Policy"), which effectively makes the Pilot Program permanent with some revisions. According to Deputy Attorney General Rosenstein, the FCPA Unit received 30 voluntary disclosures during the time period that the Pilot Program was in force, as opposed to 18 voluntary disclosures that were received during the previous 18-month period. The Policy has been incorporated into the United States Attorneys' Manual in order to "be readily understood and easily applied by busy prosecutors" as opposed to being promulgated in memorandum format.[3]

Deputy Attorney General Rosenstein highlighted a few key aspects of the new Policy during his speech on November 29. Accordingly, there will be a presumption that, if a company duly engages in voluntary self-disclosure, full cooperation, and timely and appropriate remediation, then that company will be granted a declination decision. However, this presumption may not be applicable in certain cases, depending on the seriousness of the offense and whether the company is a recidivist (i.e., whether it has previously engaged in such misconduct.) Furthermore, in case a company satisfies all of the requirements of the Policy, but aggravating circumstances exist that necessitate an enforcement action, then the DOJ will recommend a 50% fine reduction off of the low end of the fine range that is set forth in the Sentencing Guidelines. The new Policy also helps to concretize and shed light on the elements of an effective compliance program, by putting forth specific conditions, such as the compliance department being provided with sufficient resources and the compliance personnel having access to the management team and the board of directors of their companies. Deputy Attorney General Rosenstein also stated that the Policy is aimed at clarifying the DOJ's decision-making processes. He also declared that the Policy concerns the internal operating policies of companies and noted that it did not create any private rights.

I. What Advantages Does the New Policy Bring?

The advantages brought about by the Policy are similar to those provided under the Pilot Program; however, they are stated in clearer and more concrete language. Under the Policy, the DOJ will act under the presumption that it will give a declination decision for those who (i) voluntarily self-disclose, (ii) cooperate fully, and (iii) take timely and appropriate remedial actions. This section of the Policy differs significantly from the Pilot Program, where there was no presumption of a declination decision but only a promise. As opposed to the a priori nature of a presumption, a promise is a weaker potential decision.

However, if a particular case requires a criminal resolution, then the DOJ will "(i) accord, or recommend to a sentencing court, a 50% reduction off of the low end of the U.S. Sentencing Guidelines ("USSG") fine range, except in the case of a criminal recidivist; and (ii) generally will not require appointment of a monitor if a company has, at the time of resolution, implemented an effective compliance program."[4]

Furthermore, companies have to make all disgorgement, forfeiture and/or restitution payments resulting from the misconduct in order to qualify for the Policy, as was the case with the Pilot Program.

Similar to the Pilot Program, the Policy continues to provide advantages for companies that fail to voluntarily self-disclose, but nevertheless (i) cooperate fully and (ii) remediate in a timely and appropriate fashion. These companies will be awarded up to a 25% reduction off of the low end of the fine range that is provided by the US Sentencing Guidelines ("USSG").

II. How Can Companies Become Eligible for the Policy?

In order to benefit fully from the Policy, companies have to (i) voluntarily self-disclose, (ii) cooperate fully, and (iii) take timely and appropriate remedial actions with regard to FCPA matters.

1. Voluntary Self-Disclosure

The DOJ will require the fulfillment of the following criteria for a company to receive credit for voluntary self-disclosure of wrongdoing: "(i) The voluntary disclosure qualifies under USSG Section 8C2.5(g)(1) as occurring "prior to an imminent threat of disclosure or government investigation"; (ii) the company discloses the conduct to the DOJ "within a reasonably prompt time after becoming aware of the offense," with the burden being on the company to demonstrate timeliness and (iii) the company discloses all relevant facts known to it, including all relevant facts about all individuals involved in the violation of law."[5]

2. Full Cooperation in FCPA Matters

The following are the criteria that must be met for a company to be considered "fully cooperative" under the Policy, similar to the Pilot Program:

"(i) Disclosure on a timely basis of all facts relevant to the wrongdoing at issue, including: all relevant facts gathered during a company's independent investigation; attribution of facts to specific sources where such sources does not violate the attorney-client privilege, rather than a general narrative of the facts; timely updates on a company's internal investigation, including but not limited to rolling disclosures of information; all facts related to involvement in the criminal activity by the company's officers, employees, or agents; and all facts known or that become known to the company regarding potential criminal conduct by all third-party companies (including their officers, employees, or agents);

(ii) Proactive cooperation, rather than reactive; that is, the company must timely disclose facts that are relevant to the investigation, even when not specifically asked to do so, and, where the company is or should be aware of opportunities for the Department to obtain relevant evidence not in the company's possession and not otherwise known to the Department, it must identify those opportunities to the Department;

(iii) Timely preservation, collection, and disclosure of relevant documents and information relating to their provenance, including (a) disclosure of overseas documents, the locations in which such documents were found, and who found the documents, (b) facilitation of third-party production of documents, and (c) where requested and appropriate, provision of translations of relevant documents in foreign languages;

(iv) Where requested, de-confliction of witness interviews and other investigative steps that a company intends to take as part of its internal investigation with steps that the Department intends to take as part of its investigation; and

(v) Where requested, making available for interviews by the Department those company officers and employees who possess relevant information; this includes, where appropriate and possible, officers, employees, and agents located overseas as well as former officers and employees (subject to the individuals' Fifth Amendment rights), and, where possible, the facilitation of third-party production of witnesses."[6]

According to the Policy, if a company claims that it cannot disclose overseas documents due to data privacy rules and regulations, blocking statutes or other reasons related to foreign law, the burden falls upon the company to establish and provide evidence for such a prohibition.

3. Timely and Appropriate Remediation in FCPA Matters

The following are the criteria that must be fulfilled in order for a company to receive full credit for timely and appropriate remediation, similar to the Pilot Program:

"(i) Demonstration of thorough analysis of causes of underlying conduct (i.e., a root cause analysis) and, where appropriate, remediation to address the root causes;

(ii) Implementation of an effective compliance and ethics program, the criteria for which will be periodically updated and which may vary based on the size and resources of the organization, but may include:

(a) The company's culture of compliance, including awareness among employees that any criminal conduct, including the conduct underlying the investigation, will not be tolerated;

(b) The resources the company has dedicated to compliance;

(c) The quality and experience of the personnel involved in compliance, such that they can understand and identify the transactions and activities that pose a potential risk;

(d) The authority and independence of the compliance function and the availability of compliance expertise to the board;

(e) The effectiveness of the company's risk assessment and the manner in which the company's compliance program has been tailored based on that risk assessment;

(f) The compensation and promotion of the personnel involved in compliance, in view of their role, responsibilities, performance, and other appropriate factors;

(g) The auditing of the compliance program to assure its effectiveness; and

(h) The reporting structure of any compliance personnel employed or contracted by the company.

(iii) Appropriate discipline of employees, including those identified by the company as responsible for the misconduct, either through direct participation or failure in oversight, as well as those with supervisory authority over the area in which the criminal conduct occurred;

(iv) Appropriate retention of business records, and prohibiting the improper destruction or deletion of business records, including prohibiting employees from using software that generates but does not appropriately retain business records or communications; and

(v) Any additional steps that demonstrate recognition of the seriousness of the company's misconduct, acceptance of responsibility for it, and the implementation of measures to reduce the risk of repetition of such misconduct, including measures to identify future risks."[7]

In general, we observe that the Pilot Program and the new Policy do not differ with respect to their substances or contents, but in their promises. As can be understood from the speech given by Deputy Attorney General Rosenstein on November 29, 2017, the Policy, which will henceforth be in permanent effect, aims to provide more clarity as to how the DOJ will act with respect to companies that have engaged in misconduct, but have also duly satisfied three essential criteria, namely: (i) voluntary self-disclosure, (ii) full cooperation, and (iii) timely and appropriate remediation.


[4] United States Attorneys' Manual, 9-47.120.

[5] Ibid.

[6] Ibid.

[7] Ibid.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions