The US Attorney’s Office (USAO) Corporate Voluntary Self-Disclosure (VSD) Policy1 provides formal guidelines by which the government will determine what qualifies as a corporate voluntary self-disclosure and what incentives may be granted, on a case-by-case basis.
What are the key takeaways for companies?
At a minimum, a qualifying disclosure must be:
- A disclosure will NOT be considered voluntary by the DOJ (Department of Justice) if it was required by regulation or contract or as part of a prior resolution (e.g., as part of a deferred prosecution agreement)2.
- A disclosure must be made to the DOJ prior to an imminent threat of public disclosure or government investigation.
- Within a reasonable amount of time following discovery by the company, with the responsibility falling on the company to demonstrate timeliness.
- Disclosures must include all relevant facts known at the time based on a preliminary investigation.
- Companies must move to quickly preserve, collect, and produce relevant documents to the USAO.
- Companies must provide ongoing updates to the USAO as new facts are learned in the investigation.
How can a company benefit?
When companies meet the specified guidelines, the government has represented that companies will receive significant benefits, including:
- A potential waiver of all criminal penalties.
- When criminal penalties are imposed, but a guilty plea is not required, penalties will be recommended at no more than 50% of the low end of the sentencing guidelines.
- The USAO may not seek a guilty plea absent aggravating* factors.
- The USAO may not require the imposition of an independent compliance monitor if the company demonstrates at the time of resolution that it has implemented an effective compliance program.
*The government defines three aggravating factors as misconduct that: poses a serious “threat to national security, public health, or *the environment”;3 is pervasive; or involves the C-suite.