On September 15, 2022, the Department of Justice (Department) released a memorandum revising several key aspects of its corporate criminal enforcement policies.1 The new policy, titled Further Revisions to Corporate Criminal Enforcement Policies Following Discussions With Corporate Crime Advisory Group (the September 2022 Revised Policy) prioritizes four areas: (1) individual accountability, (2) corporate accountability, (3) independent compliance monitors and (4) a commitment to transparency. The new policy builds on the foundation laid in the October 2021 Memorandum on Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies (October 2021 Memorandum) and its contours were informed in part by a series of meetings between the Corporate Crime Advisory Group (CCAG)2 and civil society groups, criminal law experts, in-house counsel and business leaders, among other stakeholders, to discuss corporate enforcement. Deputy Attorney General Lisa Monaco previewed the key themes of the new policy in a speech at NYU School of Law's Corporate Compliance Enforcement Program on September 15, 2022.3
According to the Department, the September 2022 Revised Policy, developed in consultation with this diverse set of stakeholders, is intended to provide general counsels and chief compliance officers the tools needed to make the business case for compliance, to further incentivize robust self-disclosure, and to provide prosecutors additional guidance and resources to pursue Department priorities in the four key areas noted above.
I. Guidance on Individual Accountability
A. Timely Disclosure and Prioritization of Individual Investigations
The September 2022 Revised Policy reinforces the October 2021 Memorandum's focus on the prosecution of individuals and makes clear that individual accountability is the "first priority" in corporate enforcement.
Companies hoping to obtain cooperation credit at the time of resolution are already obliged to report all relevant, non-privileged facts about individual misconduct to the Department. The September 2022 Revised Policy now requires companies to produce this material "swiftly and without delay" to minimize challenges to individual prosecutions that might arise as statutes of limitation expire, evidence dissipates and memories fade.4 Department prosecutors will likewise now consider the timeliness of the production of information about relevant individuals (and not just the production of materials alone) when determining whether and how much cooperation credit to allocate at the time of resolution.
The September 2022 Revised Policy gives priority to "information and communications associated with relevant individuals during the period of misconduct,"5 which companies should proactively identify and produce to the Department whether or not it is requested. Companies that identify relevant information but delay its production for any reason, including to complete an internal investigation or to minimize collateral damage, risk losing cooperation credit. For their part, Department prosecutors must "strive" under the September 2022 Revised Policy to complete the investigation into individuals, and seek any warranted criminal charges, prior to or at the same time as entering into a resolution with a corporation. If prosecutors seek to enter into a corporate resolution prior to completing an investigation into responsible individuals, prosecutors must submit a memorandum detailing the status of the investigation of all potentially culpable individuals and a detailed plan to "bring the matter to resolution"6 prior to the end of the statute of limitations period.
B. Foreign Prosecutions of Individuals Responsible for Corporate Crime
The September 2022 Revised Policy recognizes the increasingly global nature of corporate prosecutions, including prosecutions of the individuals through which those corporations act.7 While acknowledging that the Principles of Federal Prosecution "recognize that effective prosecution in another jurisdiction may be grounds to forego federal prosecution,"8 the September 2022 Revised Policy also keeps central the Department's desire to vindicate U.S. justice interests and requires prosecutors to make a "case-specific determination" as to the efficacy of prosecution against an individual in another jurisdiction based on "(1) the strength of the other jurisdiction's interest in the prosecution; (2) the other jurisdiction's ability and willingness to prosecute effectively; and (3) the probable sentence and/or other consequences if the individual is convicted in the other jurisdiction."9
II. Guidance on Corporate Accountability
A. Evaluating a Corporation's History of Misconduct
Prior Department Guidance had emphasized the need to consider a corporation's history of prior misconduct.10 The September 2022 Revised Policy further refines the Department's policies on recidivism. While 10% to 20% of corporate resolutions involve recidivists, the September 2022 Revised Policy makes clear that "not all instances of prior misconduct ... are equally relevant or probative."11 The most relevant prior misconduct will generally be that involving U.S. enforcement agencies or that involving the same individuals as those implicated in the case under investigation. Importantly, the Department will give quantitative consideration to the age of the prior misconduct, giving prior criminal misconduct less weight after ten years, and civil and regulatory misconduct less weight after five, with the caveat that repeated misconduct even outside of these time parameters may be indicative of a corporation that operates without an appropriate compliance culture or institutional safeguards and thus may result in prosecution and/or more severe charges. The September 2022 Revised Policy requires prosecutors to consider other factors, including the facts and circumstances underlying a corporation's prior resolution; factual admissions by the corporation; the seriousness and pervasiveness of the misconduct underlying each prior resolution; whether that conduct was similar in nature to the instant misconduct under investigation; and whether at the time of the misconduct under review, the corporation was serving a term of probation or was subject to supervision, monitorship or other obligation imposed by the prior resolution.
Going forward, companies will be viewed in the context of their peers in terms of misconduct— those in highly regulated environments will be evaluated differently than those not subject to those same requirements. Finally, the Department underlined its desire not to impede acquisitions and noted that it would not penalize misconduct found at an acquired entity if the successor company promptly addressed any compliance concerns in the post-acquisition period. These considerations reflect concerns raised by the defense bar during meetings with the DAG's office as it was formulating the September 2022 Revised Policy.
On the other hand, the September 2022 Revised Policy still requires companies and prosecutors to seriously consider whether any overlap between the prior and present misconduct—in terms of type of misconduct or personnel—reflects broader and as yet unresolved weaknesses in the company's compliance program. The September 2022 Revised Policy disfavors multiple, successive non-prosecution or deferred prosecution agreements with the same company and the same leadership,12 while simultaneously encouraging companies to voluntarily self-disclose potential misconduct.13
B. Voluntary Self-Disclosure by Corporations
The September 2022 Revised Policy preserves existing voluntary disclosure initiatives14 and expands to all DOJ divisions prosecuting corporate crime the principle that companies that promptly and voluntarily self-disclose potential misconduct may be eligible for leniency at the point of resolution. Speaking at NYU, the DAG said she hoped to incentivize companies to "step up and own up to misconduct," and noted that, in her view, "voluntary self-disclosure is an indicator of a working compliance program and a healthy corporate culture."15
The September 2022 Revised Policy directs each Department division to develop16 and publish a formal, written policy to incentivize self-disclosure that incorporates the following principles: 1) corporations that have voluntarily self-disclosed, fully cooperated, and timely and appropriately remediated will not receive a guilty plea absent aggravating circumstances; and 2) the Department will not impose an independent compliance monitor for a cooperating corporation that voluntarily self-discloses if that company can show at the time of resolution that it implemented and tested an effective compliance program.17 While these requirements were previously reflected in the FCPA Corporate Enforcement Policy, they are new for other DOJ divisions. In addition, under the prior version of the FCPA Corporate Enforcement Policy, voluntary self-disclosure opened the door to a declination absent aggravating factor, while the September 2022 Revised Policy makes—for all DOJ divisions—voluntary self-disclosure a prerequisite for anything but a guilty plea at the time of resolution.
C. Evaluation of Cooperation by Corporations
The September 2022 Revised Policy reiterates that cooperation credit takes many forms and is calculated differently based on the degree to which a company cooperates with the Department and its demonstrated commitment moving forward. Citing Department precedent on the contours of corporate cooperation and its benefits,18 the September 2022 Revised Policy focuses on cooperation in the context of cross-border investigations. Under existing guidance, companies seeking credit for cooperation must timely preserve, collect and disclose relevant documents located both within the United States and overseas. Where these efforts may be limited or made more challenging by data privacy laws, blocking statutes or other restrictions imposed by foreign law, the company must show how the limitation applies to it and must also present alternatives. Prosecutors are instructed to provide cooperation credit to companies that actively engage in navigating issues of foreign law to produce records, and are less likely to provide credit to companies that inappropriately stymie the production of foreign evidence. The Department will update its Justice Manual to ensure greater consistency across components concerning steps a company needs to take to receive maximum credit for full cooperation.19
D. Evaluation of a Corporation's Compliance Program
The September 2022 Revised Policy builds on existing Department guidance that outlines factors prosecutors must consider when evaluating the strength of a corporate compliance program at the time of the misconduct and at the point of resolution,20 adding compliance-related compensation and the use of personal devices as new data points for prosecutors' consideration.
Footnotes
1. Lisa O. Monaco, Deputy Attorney General, Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group, at 3 (Sept. 15, 2022) (hereinafter September 2022 Revised Policy).
2. The CCAG's creation was announced in the October 2021 Memorandum on Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies. See Lisa O. Monaco, Deputy Attorney General, DOJ, Memorandum on Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies, at 4 (Oct. 28, 2021), https://www.justice.gov/dag/page/file/1445106/download (hereinafter October 2021 Memorandum).
3. The text of the full speech can be found here: https://www.justice.gov/opa/speech/file/1535301/download.
4. September 2022 Revised Policy, at 3.
5. Id. at 3.
6. Id.
7. Id. at 4.
8. Id.; JM § 9-27.220.
9. Id.; JM § 9-27.240. The September 2022 Revised Policy allows prosecutors time to determine whether to bring a prosecution against an individual prosecution in foreign jurisdiction(s) for the same conduct but warns against waiting until statute of limitations concerns arise. Finally, the Department does not restrict itself to individuals located in the United States.
10. October 2021 Memorandum, at 3.
11 September 2022 Revised Policy, at 5.
12 Id. at 6 (The September 2022 Revised Policy requires any proposed offers of an NPA or DPA to repeat offenders to be scrutinized by the Department to ensure greater consistency across the Department and a more holistic approach to corporate recidivism).
13 Id.
14 The Department cited the Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy (Criminal Division); Leniency Policy and Procedures (Antitrust Division); Export Control and Sanctions Enforcement Policy for Business Organizations (National Security Division); and Factors in Decisions on Criminal Prosecutions (Environment & Natural Resources Division).
15 Lisa A. Monaco, Deputy Attorney General, Remarks on Corporate Criminal Enforcement, New York University (Sept. 15, 2022) (hereinafter September 15, 2022 NYU Remarks).
16 September 2022 Revised Policy, at 7 (The policies must detail the division's expectations of what constitutes a voluntary self-disclosure and lay out the benefits that corporations can expect to receive if they meet the standards for voluntary self-disclosure under that division's policy).
17 Id.
18. Id..
19. Id.
20. See e.g., Criminal Division, Evaluation of Corporate Compliance Programs (updated June 2020); Antitrust Division, Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (July 2019).
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