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U.S. News

Justice Dept launches corporate foreign bribery disclosure program

WASHINGTON (Reuters) - The U.S. Justice Department on Tuesday unveiled a pilot program designed to encourage companies to self-report violations of foreign bribery laws in return for reduced penalties.

The Justice Department is taking steps to increase enforcement of the Foreign Corrupt Practices Act by hiring additional prosecutors in its FCPA unit and launching squads at the Federal Bureau of Investigation.

Assistant Attorney General Leslie Caldwell said the pilot program, which will run for one year, provides a clear road map that will help the public and companies better understand how and why some companies may face stricter penalties than others.

Caldwell said that a failure to promptly self-report and correct FCPA violations could lead to more severe results.

Under the pilot program, which spells out new guidance for prosecutors, companies that choose to self-report and remediate problems will be eligible for a full range of credit, including a reduction of up to 50 percent below the low end of the fines outlined in federal sentencing guidelines.

Other benefits can include not being required to hire an independent monitor and, in some cases, potentially avoiding prosecution altogether, Justice Department officials said.

Generally, companies which self-report violations of the FCPA are already more likely to face less stringent penalties in exchange for their cooperation.

However, under the new program, companies that decide to wait first before reporting will no longer be eligible for the full range of credit.

“It draws a clear distinction between credit that you can be eligible for voluntary self-disclosure as opposed to companies that may decide to wait to see if they get caught, and then cooperate,” said Andrew Weissmann, the chief of the department’s Fraud Section.

Tuesday’s announcement builds on a policy announced last fall which called on prosecutors to take steps to hold individuals more accountable. That policy said that companies which wish to receive cooperation credit must also turn over information about culpable individuals.

The new FCPA pilot program came just a few months after the Securities and Exchange Commission unveiled its own new FCPA cooperation policy, in which companies can only be eligible for deferred or non-prosecution agreements if they self-report.

Reporting by Sarah N. Lynch; Editing by Jonathan Oatis

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