DOJ Issues Revised Guidance on Key Corporate Enforcement Requirements

On October 28, 2021, the U.S. Department of Justice (“DOJ”), released a guidance introducing initial revisions to its corporate criminal enforcement policies (“Guidance”).

The Guidance reinforces that fighting corporate crime is a top priority for the DOJ and establishes, with immediate effect, the following amendments: (i) consideration of a company’s entire history of past misconduct when making decisions on criminal charges and resolutions, of distinct natures, within and outside the U.S.; (ii) the companies under investigation must provide all relevant facts relating to the individuals responsible for the misconduct under investigation, in order to ensure the execution of an agreement and mitigate the penalties; and (iii) guidance on the DOJ’s use of independent corporate monitors, in situations deemed necessary by Prosecutors.

The Guidance also establishes the formation of a “Corporate Crime Advisory Group” within the DOJ, which covers a broad mandate to update the DOJ’s approach involving several aspects, among which can be highlighted: (i) criteria for granting credit to companies that cooperate with investigations carried out by authorities; (ii) how to handle corporate recidivism;  and (iii) factors impacting the determination of whether a corporate case should be resolved through a deferred prosecution agreement (DPA), non-prosecution agreement (NPA), or plea agreement.

In addition, the Guidance establishes that the Corporate Crime Advisory Group may request inputs from the business community, academia, and lawyers when considering updates to policies and practices.

Below, the main changes arising from the Guidance are detailed:

Consideration of a company’s entire history of past misconduct when making decisions on criminal charges and resolutions.

The Guidance mandates Prosecutors to consider all prior misconduct by the company when deciding on charges and other considerations, in contrast with the previous wording that considered that only similar unlawful conduct would be considered for such a decision. The DOJ understands  that a past of misconduct may be an indication that the company lacks the appropriate internal controls and corporate culture.

Requirement for companies under investigation to provide all relevant facts relating to the individuals responsible for the misconduct, in order to receive all due benefits for cooperation.

The Guidance reinforces the DOJ’s previous understanding formalized in the Yates Memorandum that, to qualify for any cooperation credit, companies must provide to the DOJ  “all relevant information” regarding “all individuals involved in or responsible for the misconduct at issue”, regardless of whether or not these individuals were substantially involved in the criminal conduct.

Guidance on the DOJ’s use of corporate monitors.

Superseding the 2018 Benczkowski Memorandum – which provides guidance and establishes limits on the use of corporate monitors – , the new memorandum establishes that monitors should be used in cases where there is demonstrated need and in which the Prosecutors understand there will be a clear benefit derived from a monitorship. In other words, if in the course of negotiations among the company and the DOJ it is found that the company’s compliance program is lacking in several significant aspects, corporate monitoring tends to be imposed as a condition to the execution of the agreement. In practice, this means that the imposition of independent monitoring may increase again.

Demarest’s Compliance and Investigations team is available to provide further information on this and other related matters.