The document states, in particular, that the Division’s policy should ensure an appropriate balance between the effectiveness of corporate enforcement and the reduction of burdens on businesses. In this regard, law enforcement authorities are advised to follow three key principles:
1) Areas of Focus
The most significant areas of misconduct that law enforcement should prioritize include, among others:
- fraud, waste, and abuse, including procurement fraud;
- bribery and associated money laundering;
- crimes involving digital assets and other relevant areas.
At the same time, the memorandum identifies as enforcement priorities the need to identify and seize proceeds from these offenses, as well as compensation for victims.
In support of these priorities, the document announces a revision of Department of Justice Corporate Whistleblower Awards Pilot Program, particularly an expansion of the subject areas of violations that may qualify whistleblowers for financial rewards when reported.
2) Fairness
The Division adheres to the principle of fairness and equal application of the law to both individuals and legal entities, while emphasizing the importance of holding individuals – those directly responsible for the misconduct – accountable.
At the same time, the Division acknowledges that not every corporate violation warrants criminal prosecution of the company itself. In some cases, it may be more appropriate to pursue civil and administrative remedies.
The memorandum also announces a change in the Division’s approach to encouraging companies to self-report violations, as reflected in the updated Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy. This policy now provides that if a company (1) voluntarily discloses misconduct to the Division, (2) fully cooperates with the investigation, (3) timely and appropriately remediates the misconduct, and (4) does not have aggravating circumstances, it is entitled to a guaranteed declination of prosecution – rather than being merely presumed eligible for a declination, as was previously the case. Moreover, even if the self-disclosure occurs after law enforcement becomes aware of the misconduct, it will still be credited to the company and may allow for mitigation of penalties.
3) Efficiency
The principle of enhancing efficiency involves minimizing the cost and duration of investigations, as well as avoiding unjustified reputational harm to organizations. The memorandum outlines two key areas for improving efficiency:
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Efficient investigations – Despite the complexity of schemes used in white-collar crimes, law enforcement authorities are encouraged to take all reasonable steps to shorten the duration of such investigations and to minimize their negative impact on the companies involved;
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Narrowly tailored use of monitors* – Independent compliance monitors must only be imposed when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct without such heavy-handed intervention. In cases where the appointment of a monitor is deemed appropriate, the authority and responsibilities of the monitor must be clearly defined. In this context, the memorandum also refers to the need to follow the updated Memorandum on Selection of Monitors in Criminal Division Matters.
*In the United States, one of the conditions of a pretrial agreement with a company may involve the implementation of independent monitoring of its compliance program by an external expert. The purpose of such monitoring is to assess the effectiveness of the compliance program and oversee its improvement in accordance with the terms of the agreement.
Although monitoring is not inherently a punitive measure, its implementation can result in significant financial costs for the company – including expenses related to supporting the monitor’s work, providing necessary documentation, and undertaking improvements to the compliance program being assessed. For example, Ericsson, which was held liable in 2019 for violating the FCPA and paid a $1.06 billion fine to U.S. authorities, announced in 2020 that it had allocated nearly $60 million for the independent monitoring required as part of its agreement with prosecutors. Notably, such costs can far exceed the formal sanctions imposed: Siemens, for instance, spent more than $3 billion on enhancing its compliance program, in addition to paying $800 million in FCPA-related fines; similarly, Avon incurred $350 million in legal fees and related expenses – two and a half times more than the penalties imposed ($135 million) and "not much less than its annual operating profit".
