On January 13th, 2023, the U.S. Department of Justice’s (the “Department” or “DoJ”) Criminal Division announced revisions to the Criminal Division’s Corporate Enforcement Policy (“CEP”), which provides benefits to companies for voluntarily self-reporting misconduct, cooperating with the Government, and remediating. 

The changes seek to further encourage corporations to voluntarily self-disclose misconduct, fully and exceptionally cooperate with DoJ’s investigations, and timely remediate violations. 

The main changes are: 

1. Provide transparency on where a company can receive a declination even when there are “aggravating factors”;
2. Increase the maximum potential fine reduction where a company voluntarily self-discloses misconduct;
3. Increase the maximum potential fine reduction when a company does not voluntarily self-disclose misconduct but provides “extraordinary cooperation” in the DoJ’s investigation.  

1. Transparency on When a Declination is Appropriate in Cases Involving Aggravating Factors 

The revised policy provides guidance on when a company can receive a declination, even if aggravating factors are present, namely where:  

• Voluntary self-disclosure was made immediately after the company was made aware of the allegation of misconduct;
• At the time of the misconduct and the disclosure, the company had effective compliance program and internal accounting controls; and
• The company provided extraordinary cooperation with the DoJ’s investigation and undertook extraordinary remediation.

 2. Lower Sentencing Recommendations for Voluntary Self-Disclosure 

At least 50% and up to 75% reduction off the low end of the U.S. Sentencing Guidelines (the “Guidelines”) range of fines, except in the case of criminal recidivism where the reduction will generally not be off the low end of the range. Furthermore, the DoJ now will not require a corporate guilty plea absent multiple or particularly egregious aggravating circumstances.  

3. Lower Sentencing Recommendations for “Extraordinary Cooperation” Where a Company Has Not Made Voluntary Self-Disclosure 

Up to a 50% reduction off the low end of the Guidelines fine range, except for criminal recidivists whose reductions will likely not be calculated off the low end of the Guidelines range. 

The Criminal Division made clear that extraordinary cooperation is cooperation that goes above and beyond the criteria for full cooperation set forth in Department policies. In addition to consistency in telling the truth, it includes immediate cooperation that leads to evidence the Government could not otherwise obtain and which produces results such as additional convictions and trial testimony and will be reserved for companies that exceed even the gold standard in cooperation. 

Final Thoughts 

The changes to the CEP will impact how corporate criminal cases are resolved by the DoJ. They highlight the continued importance of robust compliance programs that allow companies to identify, timely report, and remediate potential misconduct. 

This update is a reminder and incentive to companies to ensure they implement and maintain effective compliance programs and internal controls. With this announcement, the DoJ continued to emphasize its intent to target the individual perpetrators of corporate misconduct and its preference for working alongside companies willing to stop this kind of wrongdoing. Therefore, they must be alert and proactive, as adopting a vigilant compliance posture can bring important benefits.  

Additional details on the topic can be obtained from the DoJ’s website: https://www.justice.gov/criminal-fraud/corporate-enforcement-policy