Department of Justice Intro Updated Voluntary Self-Disclosure Policy
In a significant move to enhance corporate compliance and encourage self-reporting, the US Department of Justice (DOJ) has recently unveiled its updated Voluntary Self-Disclosure Policy.
This revised policy provides clearer guidelines and incentives for companies to proactively disclose wrongdoing, cooperate with investigators, and remediate misconduct. By doing so, companies may benefit from reduced penalties and more favorable resolutions.
This article explores the key highlights and implications of the Department of Justice’s new Voluntary Self-Disclosure Policy.
Key Elements of the Updated Policy
Under the revised policy, companies that self-disclose wrongdoing, cooperate fully with DOJ investigators, and take effective steps to remediate misconduct are favored. Timeliness and thoroughness of disclosure are emphasized as critical factors.
The DOJ policy states that “rewards are available for companies that promptly disclose misconduct before the DOJ becomes aware, or before an imminent threat of disclosure or investigation arises.” Even if a company lacks comprehensive knowledge at the time of disclosure, it should make an initial report based on preliminary findings and provide comprehensive updates as the investigation progresses.
Incentives for Voluntary Self-Disclosure
Companies that meet all the metrics outlined in the DOJ Policy benefit significantly from self-disclosure. In cases without aggravating factors, the DOJ may refrain from seeking a guilty plea and offer alternatives such as declination of charges, non-prosecution agreements, or deferred prosecution agreements.
Moreover, the updated policy offers the possibility of substantially reduced penalties. Prosecutors are discouraged from imposing criminal penalties that exceed 50 percent of the lower end of the US Sentencing Guidelines fine range. Furthermore, companies that can demonstrate the implementation and testing of effective compliance programs may avoid the requirement for an independent compliance monitor.
In cases involving aggravating factors, such as senior leadership involvement, misconduct within a company’s culture, public health, or the environment, the DOJ Policy intervenes. It offers guidance on how reduced penalties and potential declinations may still be available through timely self-disclosure and full cooperation.
The Importance of Internal Policies and Remediation
Companies must prioritize early detection of misconduct by equipping their legal and compliance departments with effective tools and resources to fully capitalize on and enjoy the benefits of the DOJ policy. It is crucial to have robust internal policies that encourage prompt investigation and preservation of relevant documents and evidence.
Thorough documentation of the investigative process is essential, as companies must provide the DOJ with all known facts and information at the time of self-disclosure. After becoming aware of the misconduct, the disclosure should be made within a reasonably prompt timeframe.
Remediation plays a pivotal role in benefiting from the DOJ Policy. Effective remedial measures may include:
- Forfeiting gains resulting from the misconduct
- Providing restitution to affected parties
- Terminating responsible employees
- Implementing enhanced controls
- Establishing comprehensive compliance programs
Given the importance of strategic decision-making in self-disclosure, companies are strongly advised to consult experienced attorneys familiar with voluntary self-disclosures and negotiations with the Department of Justice. Expert guidance can significantly contribute to achieving the most favorable outcomes within the framework of the new DOJ policy.
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Conclusion
The Department of Justice’s updated Voluntary Self-Disclosure Policy introduces a structured framework to encourage companies to proactively disclose wrongdoing, cooperate with investigators, and remediate misconduct.
As attorney Karin Riley Porter – lead attorney of Karin Riley Porter Criminal Defense Attorney – states, “By adhering to the policy’s guidelines, companies can benefit from reduced penalties and more favorable resolutions.” Timely and thorough self-disclosure, coupled with effective remediation efforts and cooperation with the DOJ, is key to maximizing the advantages of the new policy.
