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US Attorneys Office: Voluntary Self-Disclosure Policy Explained

Author: Niall Hearty  9 March 2023
3 min read

Niall Hearty of Rahman Ravelli outlines the standardisation of treatment of companies that self-disclose wrongdoing.

Federal prosecutors in the United States are to standardise the rules whereby companies can receive credit for cooperating with government investigations into possible criminal misbehaviour.

The guidelines contained in the new voluntary self-disclosure policy will apply across all 93 US attorney’s offices. The policy is intended to set a nationwide standard regarding how US Attorney’s Offices will determine whether a company has made a voluntary self-disclosure. It has also been designed to make clear to companies the benefits that can be obtained by making a voluntary self-disclosure, fully cooperating with an investigation and taking steps to put right the situation that enabled wrongdoing to be committed.

The Policy

The policy, which was prepared by a working group of US attorneys, aims to prompt better corporate behaviour and more self-disclosures.

The Deputy Attorney General’s September 15, 2022, memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” had instructed each part of the Department of Justice (DOJ) that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure. If they had no formal written policy to incentivise self-disclosure, they were to draft and publicly share such a policy.  As a result, the United States Attorney’s Offices Voluntary Self-Disclosure Policy has been devised.

Where a company becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, it may go to the United States Attorney’s Office (USAO) and disclose that misconduct, enabling the government to investigate and hold wrongdoers accountable more quickly than would otherwise be the case. In determining the appropriate form and substance of a criminal resolution for any company, prosecutors should, under the Policy, consider whether the criminal conduct at issue came to light as a result of the company’s timely, voluntary self-disclosure - and credit that disclosure appropriately.

Disclosures

Even if companies believe the government may already be aware of the misconduct through other means, they are being encouraged to make disclosures. Prompt self-disclosures to the government will be considered favourably, even if they do not satisfy all the standards of voluntary self-disclosure (VSD).

Decisions about whether a disclosure constitutes a VSD will be made by the USAO, based on a careful assessment of the circumstances of the disclosure on a case-by-case basis.

For a disclosure to be considered as a VSD, the USAO will assess:

  • The voluntary nature of the disclosure: A disclosure will not be deemed a VSD under this policy where there is a pre-existing obligation to disclose, such as pursuant to regulation, contract or a prior DOJ resolution.
  • Timing of the disclosure: A disclosure will only be deemed a VSD when it is made to the USAO prior to an imminent threat of disclosure or government investigation and within a reasonably prompt time after the company becoming aware of the misconduct; with the burden being on the company to demonstrate timeliness.
  • Substance of the disclosure and accompanying actions: The disclosure must include all relevant facts concerning the misconduct that are known to the company at the time of the disclosure. The USAO also expects the company to preserve, collect and produce relevant documents and/or information, and provide timely factual updates to the USAO; including updates on any internal investigation being carried out.

The Benefits of Meeting the Standards for Voluntary Self-Disclosure


The USAO will not seek a guilty plea where a company has:

  • Voluntarily self-disclosed in accordance with the above criteria.
  • Co-operated fully.
  • Remediated the criminal conduct in a timely and appropriate way. Appropriate remediation must include, but is not necessarily limited to, the company agreeing to pay all disgorgement, forfeiture and restitution resulting from the misconduct at issue.

Aggravating factors that may warrant the USAO seeking a guilty plea include, but are not limited to, misconduct that:

  • Poses a grave threat to national security, public health or the environment.
  • Is deeply pervasive throughout the company; or
  • Involved current executive management of the company.

The presence of an aggravating factor does not necessarily mean that a guilty plea will be required. The USAO will assess the relevant facts and circumstances to determine the appropriate resolution.

Where a company fully meets the VSD policy, the USAO may choose not to impose a criminal penalty.  If, due to the presence of an aggravating factor, a guilty plea is warranted for a company that has voluntarily self-disclosed, fully cooperated, and acted in a timely fashion and appropriately remediated the criminal conduct, the USAO will recommend to a sentencing court a sentence reduction of between 50% and 75% off the low end of the US Sentencing Guidelines fine range.

It will not require a monitor to be appointed if the company has, at the time of resolution, demonstrated that it has implemented and tested an effective compliance programme, and has voluntarily self-disclosed the relevant conduct and remediated it.

Niall Hearty C 07998

Niall Hearty

Partner

niall.hearty@rahmanravelli.co.uk
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Niall has a wealth of corporate crime expertise and an ability to coordinate global bribery and corruption cases. His achievements in such investigations have made him a logical choice for corporate clients.

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