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Harry Cassin
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Bart M. Schwartz: Why independent compliance reviews are ‘forward thinking’

At the heart of any prospective self-disclosure to the DOJ is a robust internal compliance review program. Companies, no matter how large or small, should be looking to do two things: evaluate past practices and ensure ongoing compliance.

Recommendations from a compliance expert can often best equip firms to navigate the complexities of the initial assessment and to formulate a plan of action. When self-reporting is necessary, achieving a declination is easier said than done, and there are some key considerations for understanding and approaching compliance with the DOJ’s new FCPA enforcement policy that’s now part of the U.S. Attorney’s Manual.

The new policy provides the much-needed reassurance that thorough voluntary self-disclosure of FCPA violations will help avoid criminal prosecution. Simultaneously, the new FCPA policy indicates that the government will continue to battle corporate misconduct by focusing on individual wrongdoing.

Even when criminal prosecution is necessary for a company that otherwise qualifies under the program, prosecutors may suggest a 50 percent reduction from the low-end of the federal sentencing guidelines fine range. They will also largely not require the appointment of a monitor, if the company has already instituted an effective compliance program.

This is where an independent compliance review can become relevant, especially if it is conducted as part of a comprehensive enterprise risk assessment. More often than not, it presents a greater opportunity for companies to assess and test their compliance program, and demonstrate their commitment to making it sustainable, long before needing to ask for leniency from the government.

If the initial evaluation raises concerns, it is necessary to perform a strategic assessment of whether and how conduct should be reported. DOJ recommends seeking “the advice of counsel as well as consider using the Department of Justice’s FCPA Opinion Procedure.”

When screening for any suspicious activities, there are a variety of tools to assist in understanding the FCPA’s provisions. The FCPA Resource Guide prepared by the Criminal Division of DOJ details what constitutes unlawful practice in the FCPA context, what is allowed and what is not when it comes to gifts, travel and entertainment expenses, as well as civil and criminal resolutions in the process, and much more.

Companies can also request an FCPA Opinion of the Attorney General “as to whether certain specified, prospective — not hypothetical — conduct conforms” with the FCPA as recently amended. The procedure for doing so can be found here.

Companies should use all resources at their disposal to make a decision about whether self-reporting is necessary, and if so, to maximize the benefits of a disclosure.

The benefits of an unbiased review. Periodic independent reviews of a compliance program can ensure adherence to the law, even for companies with established internal compliance programs.

The government will perceive a company as forward-thinking if reviews are conducted based on industry best practices, within the latest U.S. statutory guidelines, and with an unbiased approach free from internal politics.

In addition, a widespread compliance review, when executed correctly, requires resources. Tying up internal staff, who are also focused on their daily tasks, can extend the review process. This is especially true for large, global companies operating in countries and industries considered to be at high-risk for corruption issues. Besides the objectivity they bring, independent compliance professionals are laser-focused on identifying an array risks and enforcement vulnerabilities.

The result of an independent review is not just a series of recommendations to help the company understand how its compliance program will be evaluated by government. The result should include a valuable framework for a sustainable internal control environment.

An independent review demonstrates a company’s good faith in becoming compliant. Finally, if appropriate, experts should make recommendations regarding the improvements, all with an eye on the day when a voluntary disclosure may become necessary. 


Bart M. Schwartz, pictured above, is the Chairman of Guidepost Solutions LLC. He served under U.S. Attorney Rudolph Giuliani as the Chief of the Criminal Division in the Southern District of New York where he had responsibility for overseeing prosecutions related to financial and business fraud. His monitoring assignments have included Point72 Asset Management (former SAC Capital Advisors), Deutsche Bank, Milberg Weiss, HP, DHL, and BP. He currently serves as the Integrity Monitor of General Motors for the automaker’s $900 safety million safety-recall settlement, and as the Independent Compliance Consultant for Höegh Autoliners as part of the company’s condition of probation for price-fixing.

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