United States: Evaluating FCPA Pilot Program: The Data, The Trends

This article by government enforcement partners Ryan Rohlfsen and Kim Nemirow, and associates Dante Roldan and Sarah Kimmer published by Law360 on April 14, 2017.

April 5 marked the one-year anniversary of the "Foreign Corrupt Practices Act Enforcement Plan and Guidance." Announced by the U.S. Department of Justice, Criminal Division's Fraud Section, the guidance outlined three important steps employed by the DOJ in combating FCPA violations: increased FCPA enforcement resources, international cooperation and, most notably, the launching of the FCPA enforcement pilot program.

The pilot program formalized the DOJ's practice of rewarding corporate cooperation and remediation with penalty reductions beyond what was historically available under the sentencing guidelines. Fashioned as both a carrot and a stick, the pilot program incentivizes companies who self-disclose potential violations to the DOJ and penalizes those who do not. Specifically, under the pilot program, a cooperating company could receive only up to a 25 percent reduction or "discount" from the bottom of the sentencing guidelines fine range if it did not disclose the wrongdoing whereas it could earn a possible declination or up to a 50 percent discount if it promptly self-disclosed the conduct.

The pilot program was initially designed to be a one-year test, during which time the Fraud Section would determine whether the program would be extended in duration or to modify its policies. On March 10, 2017, the DOJ announced that the pilot program would remain in place after its April 5, 2017, expiration while the DOJ continues to evaluate its efficacy.2

This article will discuss patterns and key takeaways from the pilot program's first year. Notably, the DOJ has resolved 18 FCPA matters over the last 12 months, a significant increase compared to the seven resolutions from the prior 12-month period. As indicated in the scatter plot following the article, a close review of the 18 matters provides substantial data from which to analyze the pilot program's short-term impact.

Year in Review

Since the announcement of the pilot program, the DOJ has resolved 18 FCPA cases. Geographically, there continues to be a concentration of cases with conduct originating in China (eight of 18). There is also growing number of actions related to activity in Latin America — six this year, compared to four in the preceding year. The rise in Latin American actions is likely the result of local enforcement agencies' increased focus on anti-corruption in the wake of the Petrobras scandal, among other high-profile prosecutions.

Over the last year, seven companies resolved self-reported misconduct, and five received the pilot program's maximum reward ¬ —a declination. This is once again an uptick from the prior year, when the DOJ issued declinations in only two cases. The two other companies that self-disclosed under the pilot program, but did not receive declinations, General Cable Corp. and Analogic Corp., received a 50 percent and 30 percent discount, respectively. Further, no company that self-reported was required to engage a corporate compliance monitor. All seven self-disclosing companies, however, were required to disgorge profits per the pilot program's requirements.

Interestingly, the DOJ overwhelmingly imposed monitorships with both nonprosecution agreements and deferred prosecution agreements resolutions. Nine of the 11 NPA and DPA resolutions required the company to appoint a monitor. From this group, only Rolls Royce PLC and JPMorgan were spared the imposition of a monitor.

Key Trends Under the Pilot Program

The DOJ's application of the pilot program over the last year has yielded some degree of consistency. Three trends — cooperation, monitorships and self-disclosure — have emerged as key considerations for companies investigating potential misconduct.

Cooperation Is Key

The pilot program allows for as much as a 25 percent reduction in fines for companies that cooperate with a DOJ investigation, but did not self-report the misconduct. Of the 11 settlements involving companies that did not self-report, nine received a discount of 25 percent or less. Five of the seven companies that self-reported and fully cooperated, received declinations from the DOJ and were required to pay disgorgement — but no fines or penalties — to resolve their FCPA misconduct. The prior year's resolutions were arguably not as consistent on this point.3

Regardless of whether a company self-reports misconduct, the level of cooperation may also impact the potential discount. Companies that received less than the maximum discount also did not receive full cooperation credit from the DOJ. For example, Analogic did not initially disclose all relevant facts to the DOJ. As a result, it similarly received a 30 percent discount, instead of the full 50 percent available to self-disclosing companies under the pilot program.4Similarly, according to the DPA, Embraer.

 SA fully cooperated with the DOJ's investigation but only partially remediated. The DPA notes that Embraer did not terminate a senior executive with knowledge of the conduct described in the DPA, which was a factor that the DOJ considered when determining that Embraer would receive a 20 percent discount in lieu of a potential 25 percent discount for companies who had fully cooperated and remediated.5 For Braskem SA, Teva Pharmaceuticals Industries Ltd. and Och-Ziff Capital Management Group LLC, delays during the early stages of the investigations, led to decreased discounts of 15 percent, 20 percent, and 20 percent, respectively, instead of the maximum 25 percent discount available to each company.

Monitorships Are a Very Real Possibility

Recent resolutions confirm that self-reporting companies have been far less likely to receive a monitor. Comparatively, those companies that do not self-disclose have been increasingly subject to review by a monitor. The data over the last year bears this out — nine of the companies that did not self-report were required to appoint a monitor, compared to two self-reporting companies where a monitor was not required.

The DOJ's decision to impose a monitorship generally turns on whether the company has "implemented an effective compliance program." However, non-self-reporting companies that received full cooperation credit and implemented (according to the resolution papers) strong compliance enhancements, still overwhelmingly received monitorships. This trend is also noteworthy because the imposition of a monitorship may represent a significant expense for companies on top of any fines, and may exceed the value of a discount off the sentencing guidelines.

As noted above, although they did not self-report, neither JPMorgan nor Rolls Royce received a monitor.6 The DOJ determined that "an independent compliance monitor was unnecessary" for JPMorgan based on the "state of [the company's] compliance program" and its agreement to provide periodic reports to the DOJ and the U.S. Attorney's Office for the Eastern District of New York.7 In the case of Rolls Royce, the U.K.-based company entered into $800 million global resolution with authorities in the United Kingdom, United States and Brazil. Of that amount, the U.K. received $605 million, the U.S. $170 million, and Brazil $25 million. Based on the size of the U.K. portion of the settlement, compared to those with the U.S. and Brazil, it is possible that the DOJ deferred to the U.K. regarding such issues as to whether to impose a Monitor.

DOJ Further Incentivizes Self-Disclosure

Over the last year, the majority of self-reporting companies (five of seven) received declinations. The remaining companies, Analogic and General Cable, received significant discounts and were not required to engage a monitor. Companies should consider these results when making a disclosure decision.

The terms of the DOJ's settlement with Analogic, despite the company's incomplete self-disclosure, signals the value the government places on self-reporting.8 While Analogic self-reported a scheme whereby a subsidiary funneled millions of dollars to third parties, including government officials in Russia, it failed to initially disclose all relevant facts. Nevertheless, the DOJ credited Analogic for its self-disclosure and cooperation during the investigation. As result, Analogic settled upon a $3.4 million fine — a 30 percent discount — and was not required to engage a monitor.

Limitations on Declinations

Despite the penalty consistency of the first year, the full impact of the pilot program remains to be seen. While the DOJ has resolved cases under the pilot program's guidance, these matters were apparently reported prior to its launch. We expect that cases handled entirely within the pilot program's framework will be resolved later in 2017 and may provide more clarity, particularly with respect to the use of declinations.

Contrary to the five self-disclosed cases that received declinations, General Cable's resolution provides support for the notion that the size and scope of self-reported conduct will inform whether a company receives a declination. General Cable self-reported a scheme whereby foreign subsidiaries used third-party agents and distributors to make corrupt payments to foreign officials in Angola, Bangladesh, Indonesia, Thailand and China to obtain business. Disgorgement — typically calculated from the profits attributable to the misconduct — is at least one indicia of the size of a company's misconduct. In addition to a three-year NPA with the DOJ, General Cable disgorged $55 million in a separate resolution with the U.S. Securities and Exchange Commission.

General Cable's $55 million disgorgement payment was almost six times the highest amount paid by the five self-reporting companies that received declinations. Indeed, three of the five companies receiving declinations paid disgorgement that did not exceed $700,000. The size of General Cable's disgorgement sheds light on the existence of an upper limit to the types of self-reported schemes that will receive declinations.

Looking Forward

While the pilot program continues, its future is by no means set in stone. Instead, the DOJ will continue to evaluate the pilot program's "utility and efficacy" to determine "whether to extend it, and what revisions, if any" should be made.9

Importantly, the pilot program was announced also as an initiative to cooperate with international regulators. In fact, the DOJ has credited foreign authorities with providing valuable assistance in nearly ever resolution over the last year. Furthermore, a number of foreign jurisdictions have ramped up anti-corruption investigations and enhanced international cooperation. For example, prosecutors from 10 Latin American countries (Brazil, Argentina, Chile, Colombia, Ecuador, Mexico, Peru, the Dominican Republic, Venezuela and Panama) and one European country, Portugal, recently announced that they will form a task force to share evidence in the investigation of bribes paid by Odebrecht SA.10 The goal of the task force is to speed up the exchange of information between countries to avoid "bureaucratic hurdles" encountered when assessing penalties.11

In summary, the DOJ's FCPA enforcement does not appear to be on the decline. Further anti-corruption developments abroad will only serve to increase pressure on the DOJ to strengthen its FCPA efforts.


1 See Fraud Section's Foreign Corrupt Practices Act Enforcement Plan and Guidance (https://www.justice.gov/criminal-fraud/file/838416/download).

2 Acting Assistant Attorney General Kenneth A. Blanco Speaks at the American Bar Association National Institute on White Collar Crime (https://www.justice.gov/opa/speech/acting-assistant-attorney-general-kenneth-blanco-speaks-american-bar-association-national).

3 In 2015, the DOJ declined to take action in two cases, Petro Tiger and SAP, but only Petro Tiger self-disclosed its misconduct. In the remaining five cases, the fine discounts ranged from 0 percent to 45 percent, with no two companies receiving the same discount.

4 BK Medical ApS NPA at 1 (https://www.justice.gov/criminal-fraud/file/869661/download).

5 Embraer S.A. DPA at 4 (https://www.justice.gov/criminal-fraud/file/904636/download).

6 JPMorgan Securities NPA at 2 (https://www.justice.gov/criminal-fraud/file/911356/download); Rolls-Royce PLC DPA at 4-5 (https://www.justice.gov/criminal-fraud/file/929126/download).

7 JPMorgan NPA, supra note 6.

8 BK Medical NPA, supra note 4.

9 Blanco Speaks at the American Bar Association National Institute on White Collar Crime, supra note 2. 

10 Latin American Prosecutors Join Forces on Odebrecht Bribes (http://www.reuters.com/article/us-brazil-corruption-latinamerica-idUSKBN15W2H7) sup> 

11 Id.

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.

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

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.


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.


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 by clicking here .

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.


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.


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.


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.


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.