FCPA Compliance: Voluntary Disclosure

In terms of FCPA compliance, one of the thorniest issues that arises relates to whether a corporation should make a voluntary disclosure of improper inducements on the part of an employee or agent. In such situations, the policy guidance of the U.S. Department of Justice should be kept in mind:

General Principle: A corporation can only act through natural persons, and it is therefore held responsible for the acts of such persons fairly attributable to it. Charging a corporation for even minor misconduct may be appropriate where the wrongdoing was pervasive and was undertaken by a large number of employees, or by all the employees in a particular role within the corporation, or was condoned by upper management. On the other hand, it may not be appropriate to impose liability upon a corporation, particularly one with a robust compliance program in place, under a respondeat superior theory for the single isolated act of a rogue employee.

In its comments to the “General Principle,” the Department of Justice further notes that “the most important [consideration] is the role and conduct of management” and cites to the commentary of the Sentencing Guidelines:

Pervasiveness [is] case specific and [will] depend on the number, and degree of responsibility, of individuals [with] substantial authority … who participated in, condoned, or were willfully ignorant of the offense. Fewer individuals need to be involved for a finding of pervasiveness if those individuals exercised a relatively high degree of authority.  Pervasiveness can occur either within an organization as a whole or within a unit of an organization.1

The policy guidance demonstrates the import of an effective compliance program. If a “robust” compliance program is implemented, isolated acts of rogue employees, and even agents, are less apt to subject a corporation to liability. The policy guidance further suggests the implications of voluntary disclosures in such situations, particularly in the context of ever increasing import being placed on the cooperation of corporations.

1USSG § 8C2.5, cmt. (n. 4).

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