The DOJ and SEC may agree to settle FCPA matters against companies through a declination or a negotiated resolution that may take several forms, including a non-prosecution agreement (NPA), deferred prosecution agreement (DPA), or a guilty plea.
A declination is an exercise of the government’s discretion not to bring charges when the facts may otherwise allow it to do so. Traditionally, declinations were not made public unless the company disclosed its receipt of a declination in a securities filing or other public statement. In 2016, however, the DOJ began publicly disclosing some declinations in order to demonstrate transparency in its decision-making. This practice has continued under the Corporate Enforcement Policy in the form of one- to two-page letters that briefly describe the company’s misconduct and the circumstances of the declination. Public declinations have been issued to companies that self-report an FCPA issue, cooperate with the government’s investigation, and implement appropriate remedial measures. In some instances, declinations are conditioned upon disgorgement of any ill-gotten gains.1
Under an NPA, the government maintains the right to file charges but refrains from doing so to allow the company to demonstrate its good conduct during the term of the NPA. While the NPA is not filed in a court, it is made available to the public. An NPA generally will require a waiver or tolling of the statute of limitations, ongoing cooperation, admission of the material facts, compliance and remediation commitments, and the payment of a monetary penalty.2
Under a DPA, the government publicly files a charging document and simultaneously requests that the prosecution be postponed for the purpose of allowing the company to demonstrate its good conduct. DPAs generally require a defendant to agree to pay a monetary penalty, waive or toll the statute of limitations, cooperate with the government, admit the relevant facts, and enter into certain compliance and remediation commitments.3
In the UK, DPAs can be used by the Crown Prosecution Service and the Serious Fraud Office. DPAs allow organizations that have co-operated with the authorities during the course of investigations to have the proceedings brought against them suspended. The terms of the DPA will contain provisions such as the payment of a financial penalty, the payment of compensation, and an agreement to co-operate in the future. A DPA requires judicial approval. The Serious Fraud Office and the Crown Prosecution Service have published a Code of Practice setting out guidance in relation to DPAs. For more on DPAs in the UK, see Schedule 17 of the Crime and Courts Act 2013.
1 DOJ, Justice Manual 9-47.120.
2 DOJ & SEC, A Resource Guide to the U.S. Foreign Corrupt Practices Act 75 (2012) (FCPA Guide).
3 FCPA Guide 74.