New DOJ Policy Addresses Duplicative Corporate Penalties

By Sarah Q. Wirskye - On

On May 9, 2018, the United States Department of Justice (DOJ) announced a new policy discouraging duplicative corporate penalties. This policy was incorporated in the United States Attorneys Manual Section 1-12.100 and is titled “Coordination of Corporate Resolution Penalties in Parallel and/or Joint Investigations and Proceedings Arising from the Same Misconduct.” It contains the following four principles.

  1. In parallel or joint corporate investigations and proceedings involving multiple DOJ components or other federal, state, or local enforcement authorities, DOJ attorneys should not use criminal enforcement authority to unfairly extract additional monetary payments.
  2. DOJ attorneys should coordinate with one another to avoid the unnecessary imposition of duplicative fines, penalties, or forfeiture against the company.
  3. The DOJ should also coordinate with and consider the amount of fines, penalties, or forfeiture paid to other enforcement authorities that are seeking to resolve a case with a company for the same misconduct.
  4. Finally, the DOJ should consider all relevant factors in determining whether coordination and apportionment between DOJ components and with other enforcement authorities allows the interests of justice to be fully vindicated.  Relevant factors may include, the egregiousness of a company’s misconduct; statutory mandates regarding penalties, fines, or forfeitures; the risk of unwarranted delay in achieving a final resolution; and the adequacy and timeliness of a company’s disclosures and its cooperation with the DOJ, separate from any such with other enforcement authorities. Therefore, this policy does not prevent DOJ attorneys from considering additional remedies in appropriate circumstances, such as where those remedies are designed to recover the government’s money or to provide restitution to victims. [1]

While this policy could be beneficial to corporations, it is important to note that it is nonbinding.  Moreover, the fourth prong allows DOJ to consider additional remedies in certain circumstances.  Finally, its application will depend, in part, on how and if foreign and other domestic regulators are willing to work with DOJ in the application of the policy.  Nevertheless, the policy is a step in the right direction with the increased use of parallel proceedings in recent years.

[1] USAM Title 1. 1-12.100, Coordination of Corporate Resolution Penalties in Parallel and/or Joint Investigations and Proceedings Arising from the Same Misconduct.

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