USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
5. Penalties for Violations 5.1 Penalties on Conviction FCPA
Collateral Consequences Aside from imprisonment and monetary fines/ penalties, an anti-corruption investigation (or even allegations that a company has violated bribery or corruption laws) could lead to sev - eral collateral consequences that could prove extremely damaging to a business or individual. Such an investigation could lead to debarment from contracting with the US government or international financial institutions, loss of impor - tant regulatory statuses under US law, and/or termination of commercial relationships. 5.2 Guidelines Applicable to the Assessment of Penalties As previously noted, the Justice Manual, FCPA Resource Guide, and other publications provide important guidance on how agencies assess penalties. US Sentencing Commission Guidelines The US Sentencing Commission Guidelines (USSG), which are a set of advisory rules designed to inform judges when imposing crim - inal sentences, prescribe a number of factors that may warrant enhanced or mitigated sen - tences. For example, the greater the monetary loss caused by a corrupt scheme, the more severe the recommended sentence. Generally speaking, bribery and other white-collar crimes do not have mandatory minimum sentences, but repeated offences are more severely punished. The USSG permit courts to reduce criminal penalties where a company has an effective compliance programme. The DOJ often uses the USSG as a baseline to assess penalties in corporate resolutions. Chapter 8 of the USSG provides guidelines for sentencing organisations that have been convicted of a crime. It describes the elements of an “effective” compliance pro - gramme; companies with such programmes
Violating the FCPA’s substantive anti-bribery provisions may result in up to five years’ impris - onment and/or a fine of up to USD250,000 for each offence committed by an individual. Corpo - rations may be punished by fines of up to USD2 million per violation. Wilful violations of the accounting provisions may result in criminal fines of up to USD25 mil - lion for a legal entity. Individuals may be required to pay fines of up to USD5 million and/or serve as many as 20 years in prison. Moreover, the DOJ is authorised to seek a fine of up to twice the benefit that the defendant obtained by mak - ing the corrupt payment(s), which often repre - sents a far greater amount than the maximum fines previously noted. Defendants may be required to pay civil mon - etary penalties of USD10,000 for each viola - tion of the anti-bribery provisions, whether by an individual or legal person. The DOJ and the SEC may also seek civil disgorgement penalties for books and records violations. Domestic Bribery Penalties for violating domestic bribery or fraud laws vary by jurisdiction. For example, violations of the federal mail or wire fraud statutes may result in fines and up to 20 years’ imprisonment (or 30 years’ imprisonment in some circumstances). The maximum penalty for violating 18 U.S.C. Section 201(b) is 15 years in prison and/or substantial monetary fines; 18 U.S.C. Section 201(c) has a maximum prison sentence of two years and/or fines.
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