The FCPA Guidance And Voluntary Disclosures

by Michael Volkov

The FCPA Guidance is an advertisement for the government’s voluntary disclosure program.  DOJ and SEC repeat their message – if you voluntarily disclose, you will get a benefit.  As demonstrated in the declinations, companies that disclose will receive a benefit.

While I am reluctant to bring religion into the FCPA arena, the FCPA Guidance describes the disclosure process in a cleansing way, like an absolution from confession.  Say three Hail Mary’s and you walk out of the government absolved.  As portrayed in the FCPA Guidance, everyone should come in, confess and receive their guaranteed absolution.

Unfortunately, the issue is not so simple, nor straightforward. 

The FCPA Guidance describes voluntary disclosures in situations when a violation has not occurred.  Some of the hypothetical factual situations refer to potential violations.  Of course, you can be liable for an attempted or authorized bribe but the FCPA Guidance does not make that clear.  Instead, it describes situations where companies detect a potential bribe but stop it from occurring. 

In these situations, the decision to disclose to the government is problematic.  What is the benefit of the disclosure and what is the down side?

If a company runs into the government to report “potential” violations, there is a serious risk.  The government can turn to the company and ask the company to conduct an internal investigation which may or may not be limited to the specific circumstances which caused the initial voluntary disclosure.  The company can then conduct the internal investigation and may then find real and significant FCPA violations.  Since it is already before the government, the company will have to disclose these additional risks and may end up having to pay a fine and suffer other consequences.

Let me suggest an alternative strategy which also has risks — but these risks may be more manageable.

Instead of disclosing the potential violations to the government, the company conducts its own internal investigation and identifies significant problems with its compliance program.  The company fixes the problems and adopts new and improved procedures to prevent the problem from reoccurring.  The company then sits tight and continues to conduct business.

One wrinkle to this last scenario – what happens if the company terminates some employees involved in the misconduct?  The company’s risk increases because the terminated employees may decide to report the company to the government.  Add to that the SEC’s whistleblower program and potential compensation to the former employee, and the risk of the employee reporting to the government increases even more.

Even though the company cannot control that employee, the company has addressed the initial problem, conducted an internal investigation, remediated the problem and has a good understanding of its potential exposure if it then decides to disclose the conduct to the government.

In the end there is no clear “right” way to handle these situations.  If the company only discovers “potential” compliance problems, it is hard to see the benefit of voluntary disclosure in such circumstances.

One thing is clear – a company should never act without full knowledge.  While many companies are reluctant to initiate an internal investigation unless there are real problems identified initially, this is a short-sighted and indefensible use of internal investigations. 

In order to define a company’s risks, internal investigations and periodic audits and compliance reviews are invaluable tools for a company to identify and manage risks so as to avoid government scrutiny.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

The Volkov Law Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.