USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
There are other civil enforcement agencies that, although not specifically charged with enforcing anti- corruption or anti-bribery laws, have authority over related areas of law that anti-corruption practitioners may wish to note. For example, the Federal Election Commission pursues civil penalties against corpora - tions that donate to political campaigns in violation of federal campaign finance laws. 7.3 Jurisdictional Reach of Enforcement Bodies See 3.2 Geographical Reach of Applicable Legis- lation . US enforcement agencies’ jurisdiction gener - ally reaches as far as the statutes they enforce. Civil regulators’ subject-matter jurisdiction is generally more circumscribed than that of criminal authorities. For example, the SEC can only take civil enforcement actions based on conduct affecting US securities issuers or their personnel, the CFTC can only civilly enforce laws relating to US commodities markets, and the DOJ can enforce criminal violations affecting either securities or commodities markets. 7.4 Discretion for Mitigation and Aggravation US authorities have extensive discretion to grant defendants credit for self-reporting and other forms of co-operation, up to and including declining to bring enforcement actions. US enforcement agencies also have discretion to resolve violations of law through negotiated agree - ments. These agreements account for the vast major - ity of criminal resolutions in the US. There are three main types of negotiated agreements: non-prosecu - tion agreements (NPAs), deferred prosecution agree - ments (DPAs), and plea or settlement agreements. • NPAs – in NPAs, the agency agrees not to prose - cute on the condition that the individual or com - pany will co-operate with the agency in its investi - gations of other individuals or entities and abide by other conditions (fines, monitorships, etc). • DPAs – the agency defers filing charges, some - times indefinitely, based on the defendant’s com - pliance with certain conditions. Importantly, neither DPAs nor NPAs require a defendant to admit wrongdoing. This can be an important point, as it
may affect a defendant’s potential civil liability to private parties. • Plea/settlement agreements – the agency files charges and reaches an agreement with the defendant to end the enforcement action after it has already begun. As part of these agreements, the agency may agree to dismiss one or more of the charges, which often reduces the penalty. State and federal criminal prosecutors all have the authority to enter into plea agreements. DPAs and NPAs are available at the federal level and may be available in some states, depending on local laws. Regardless of the precise form, negotiated resolutions are extremely common in most, if not all, US enforce - ment contexts. They often include features such as: • a fixed term of years during which the defendant must comply with the terms of the agreement or risk the government pursuing a formal action; • monetary penalties; • obligations to cease ongoing violations, remedi - ate harm caused to victims, and improve internal processes to prevent future violations; • reporting requirements (eg, the company must report any violations of law or the negotiated reso - lution directly to the enforcement agency); and • often, compliance monitors, who are appointed as neutral third parties to oversee the defendant’s compliance with the law and the agreement, report to the government on the defendant’s activities, and review and audit the defendant’s activities. Plea agreements are used in criminal cases and require the defendant to acknowledge guilt. Pleas must be approved by a judge and result in the entry of a conviction against the defendant. In practice, courts rarely modify or reject plea agreements proposed by the parties, but it is possible for them to do so. Civil regulators like the SEC use settlement agree - ments to the same effect. A settlement agreement does not necessarily require an admission of liability or wrongdoing (although the regulator may demand one). Nor does it necessarily need to be approved by a court or automatically result in the entry of a judg - ment against the defendant in the same way that a plea agreement results in a conviction.
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