DOJ plans to apply FCPA corporate enforcement policy to mergers and acquisitions, deputy AAG says

4 September 2018 9:54am

25 July 2018. By Robert Thomason.

The US Justice Department will be paying more attention to Foreign Corrupt Practice Act enforcement during mergers and acquisitions, and plans to use its recent FCPA corporate enforcement policy to provide clarity and certainty to buyers that identify problems in the acquired companies, said deputy assistant attorney general Matthew S. Miner.

"One area where we would like to do better would be in the area of mergers and acquisitions, especially in high-risk markets," Miner told a conference.

Miner noted that often companies that acquire targets from these high-risk markets may not be able to identify corruption problems within those targets until after the merger is complete.

He said that by self-reporting the problem to the DOJ and initiating remediation, a company would be a candidate for a declination under the agency's 2017 FCPA corporate enforcement policy. That policy gives the presumption of a declination of prosecution by DOJ if a company self-reports, cooperates and remediates in the absence of aggravating factors.

Miner said that the DOJ had previously issued opinions saying that disclosure by buyers of wrongdoing discovered in acquired companies might result in a declination. "The word 'may' does not provide the level of comfort found in the [FCPA] corporate enforcement policy," Miner said.

DOJ wants to encourage companies to take the steps outlined in the corporate enforcement policy, Miner said. "We don't want to cede the field to companies that don't care about compliance," he said.

He discussed the ways that buyers have complied. For example, an acquired company was integrated into the existing compliance program within a year, or assets purchased via bribery were removed from an acquiring company.

Miner also said that individual accountability remains important and the companies should provide information about people responsible for violations.

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