USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
• Compensation-related compliance structures – to receive full credit for timely and appropri - ate remediation, a company must show that it uses compensation structures and discipli - nary measures to incentivise employee com - pliance. In March 2023, the DOJ introduced the first-ever Pilot Program on Compensation Incentives and Clawbacks, which will reward co-operating companies that attempt to claw- back payments to law-breaking executives and employees. • Personal devices and messaging platforms – in addition, to receive full credit for timely and appropriate remediation, a company must show that it has a prohibition against the deletion of business records and has appro - priate guidance and controls on the use of personal devices and messaging platforms, including ephemeral messaging applications. As of March 2023, the DOJ will also consider this topic when evaluating a company’s over - all compliance programme. In general, there is no duty to disclose violations. Depending on the specifics of a particular viola - tion, however, US individuals and/or companies may be exposed to liability for failing to disclose the violations (eg, if a violation exposes a US securities issuer to “material” risks, the issuer may face civil or criminal liability for failing to disclose the risk to its shareholders). Disclosure and co-operation with a subsequent govern - ment investigation often helps a company or individual reduce a potential penalty. 6.2 Voluntary Disclosure Incentives The USSG and the Justice Manual (including the CEP) both encourage companies to self-disclose 6. Disclosure Processes 6.1 Disclosure Obligations
misconduct by offering “credit” for such co- operation. Co-operation credit is a key aspect of US criminal and regulatory defence, and it often features prominently in authorities’ deci - sions about whether and what type of action to bring, as well as providing a basis for reductions in penalties and other negative consequences. In 2023, DOJ revised the CEP to create further incentives for voluntary disclosure. Of note, the CEP establishes a rebuttable presumption that the DOJ will decline to prosecute a company for FCPA violations if the company voluntarily self- discloses misconduct, fully co-operates with the DOJ’s investigation, and takes timely and appro - priate remedial action, absent aggravating cir - cumstances. Even in the presence of aggravat - ing factors, a company may still benefit from a declination where it has provided “extraordinary co-operation”. 6.3 Self-Disclosure Procedures The process of self-disclosure and/or applying for co-operation credit is highly fact-specific and varies from one agency to another. Reporting violations of the FCPA to the DOJ or SEC, for example, may involve a written or oral outreach to the relevant personnel at DOJ or SEC enforce - ment division following an internal investigation. Ongoing co-operation may require providing documents or witnesses to the enforcement agency, making presentations to the enforce - ment agency, and providing estimates of the scheme’s impact (eg, the company’s gains or losses arising from a corruption scheme). 6.4 Protections Afforded to Whistle- Blowers US law generally protects whistle-blowers from retaliatory action for reporting their reasonable belief of a possible violation of many federal or state laws. The scope of protected whistle-
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