Insights

On February 22, 2023, United States Attorneys for the Southern and Eastern District of New York announced a new, nationwide United States Attorneys’ Offices Voluntary Self-Disclosure (“VSD”) Policy. The policy applies to all United States Attorney’s Offices and is effective immediately. The implementation of the policy follows Deputy Attorney General Monaco’s September 15, 2022 memorandum instructing each component of the Department of Justice that prosecutes corporate crime to review, or draft and publicly share its policies on corporate voluntary self-disclosure and Assistant Attorney General Kenneth A. Polite, Jr’s remarks on revisions to the Criminal Division’s Corporate Enforcement Policy. The VSD policy incentivizes companies to voluntarily disclose misconduct and offers significant benefits for timely disclosure.

Businesses engaged in virtual currency activities with a BitLicense or limited purpose trust charter from the New York State Department of Financial Services (NYDFS) may now face additional fees for supervision in New York, as provided by New York State’s FY2023 budget bill. Signed into law on April 9, 2022, by Governor Kathy Hochul, Senate Bill S.8008C (the “Legislation”) amends New York’s financial services laws to defray NYDFS’ operating expenses for supervision of businesses that engage in virtual currency business activity.

Agency Issues First National Priorities for Anti-Money Laundering and Counter-Terrorist Financing, Completes Assessment on Potential No-Action Letter Process, Provides 180-Day Update on AML Act Implementation, and Appoints First-Ever Chief Digital Currency Advisor

After 100 days in office, President Joe Biden has made it clear that he is not afraid to go it alone to pursue policy to match his campaign rhetoric and promises. The first 100 days of the administration were marked by a significant number of executive orders, a historic economic stimulus package passed with only Democratic support in Congress, and sweeping proposals that – if enacted – could transform everyday life for a significant number of Americans.

On January 1, 2021, the Senate followed the House and voted to override President Trump’s veto of the National Defense Authorization Act for Fiscal Year 2021 (NDAA). As is typical, the NDAA touched on a wide range of legal areas, including numerous new government contracts requirements, as well as a number of sanctions and export control related features, which will be summarized separately. One of the core features of the NDAA, however, is Division F, The Anti-Money Laundering Act of 2020 (AMLA or the Act), which makes sweeping reforms to the Bank Secrecy Act (BSA) and other anti-money laundering rules. The following is a summary of the most significant changes to the AML legal landscape, including:

On July 3, 2020, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) released the second edition of their Resource Guide to the U.S. Foreign Corrupt Practices Act (the “Guide”). This new edition provides several clarifications on the enforcement agencies’ view of the FCPA, adds summaries of recent cases and declinations, incorporates DOJ's recently updated guidance on the Evaluation of Corporate Compliance Programs, and addresses other agency policies issued since the first edition including the FCPA Corporate Enforcement Policy and policies on the selection of monitors and the coordination of corporate resolutions. Although the substance of the Guide remains largely unchanged, it does contain several notable edits that give some further insight into DOJ and SEC’s perspective on key developments in the law and enforcement issues under the FCPA since the first edition was published in 2012. While companies’ attention may be elsewhere during the COVID-19 pandemic, they should nevertheless remain vigilant in maintaining and enforcing their anti-bribery and anti-corruption programs. This updated Guide provides additional insights for doing so.

On April 16, 2020, the White House published non-binding guidelines for states and localities to consider in determining when and how to reopen businesses, schools, and other gatherings, and lift other COVID mitigation restrictions. Entitled “Opening up America Again” (Guidelines), the Guidelines are a set of recommendations for a three-phased reopening in jurisdictions that satisfy broad “gating criteria” based on evaluation of data related to symptoms, COVID cases, and hospital loads and capacity.  The Guidelines do not have the force of law or federal regulation. State and local officials do not have to apply any of the criteria in determining how to lift restrictions or require that employers satisfy any of the White House recommendations discussed below. Nevertheless, it’s reasonable to assume that a number of jurisdictions will incorporate some of the criteria and a phased implementation methodology contemplated by the Guidance. 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides for an expansive, $2 trillion stimulus package. The Act affords direct relief to individuals, funding for the medical sector, and various forms of assistance for small and other businesses impacted by the coronavirus outbreak, among other provisions previously discussed here. Money and other relief doled-out as part of the CARES Act will be subject to several layers of Congressional and agency oversight, and recipients of funds and other relief under the CARES Act will be scrutinized for what they do – or don’t do – with the federal assistance they receive. This heightened scrutiny puts a premium on compliance, and companies and individuals benefiting from the CARES Act are wise to ensure that they have appropriate oversight in place before putting CARES Act funds to use.

On August 6, 2019, the U.K. Serious Fraud Office (SFO) released its highly-anticipated Guidance on Corporate Cooperation. Much like the approach taken by the U.S. Department of Justice, the SFO has stated in the guidance that “co-operation will be a relevant consideration in the SFO’s charging decisions.” While co-operation “does not guarantee any particular outcome,” under the SFO’s Guidance on Corporate Prosecutions and Deferred Prosecution Agreements Code of Practice, co-operation is a factor that weighs against prosecution when corporate management has adopted a “genuinely proactive approach” upon learning of potential wrongdoing. 

After a year of review, Deputy Attorney General Rod Rosenstein has announced reforms to Yates-era policy governing corporate investigations in both criminal and civil cases. Those reforms affect the conditions for cooperation credit, the availability of corporate resolutions that shield individuals from civil liability, and the likelihood of individual prosecutions in civil cases. The reforms address several concerns that have been raised by prosecutors and defendants alike. But significant questions remain unanswered, particularly about cooperation credit in civil cases.

On August 24, 2018, in United States v. Hoskins—F.3d—, 2018 WL 4038192 (2d Cir. 2018), the Second Circuit held that a foreign national who had not performed any illegal act within the territory of the United States could not be charged with accomplice or conspiracy liability in connection with a domestic concern’s or a covered foreign national’s alleged violation of the Foreign Corrupt Practices Act (FCPA). To convict, the government must show that the defendant, Lawrence Hoskins, was an “agent” of a “domestic concern” under 15 U.S.C. § 78dd–2 when allegedly conspiring to commit violations of the FCPA or aiding and abetting substantive FCPA violations.

On May 23, 2018, the Eleventh Circuit, in United States v. Touset, held that reasonable suspicion is not required to perform a forensic search of an electronic device at a U.S. border. Appellant, who was convicted of numerous counts based on evidence recovered from a search of his electronic devices, relied on the U.S. Supreme Court’s decision in Riley v. California – which held that a warrantless search and seizure of contents of a cellphone during an arrest violates the Fourth Amendment – to argue that reasonable suspicion was required for the forensic searches of his laptop and external hard drives at the Atlanta airport following an international flight. The Eleventh Circuit disagreed.

Multinational corporations operating across jurisdictions are often subject to simultaneous investigations by any number of domestic (and foreign) enforcement agencies. Corporations and their counsel not only navigate cumbersome and varied regulator requests during the course of an investigation, but regulators often require an entity to pay multiple fines and penalties to resolve the individual regulator’s investigation for the same underlying misconduct. This phenomenon may result in duplicative penalties against businesses for the same misconduct—an issue recognized by both corporate America and Department of Justice personnel.  Enhanced coordination among enforcement agencies—DOJ, SEC, CFTC, FINRA, Federal Reserve, FDIC, OCC, FinCEN, and OFAC, and their foreign counterparts—is the only solution to this problem.

On Friday, January 5, 2018, U.S. Customs and Border Protection (CBP), a component of the Department of Homeland Security, released the fiscal year (FY) 2017 statistics relating to warrantless searches of electronic devices at the border; they show a significant increase in border searches—30,200 in FY 2017, up from 19,051 in FY 2016 (which was itself up from 8,503 in FY 2015). CBP also released a new policy directive governing such searches, replacing guidance from 2009. The updated policy clarifies the standard operating procedures for searching, reviewing, and retaining information found on electronic devices. Key components of the new policy include:

In this issue:

On November 29th, the Department of Justice unveiled a revised Foreign Corrupt Practices Act (FCPA) Enforcement policy that provides significant incentives for corporations to voluntarily self-disclose potential FCPA violations. The new policy makes permanent many aspects of a pilot program started under the Obama Administration with one a significant enhancement: a presumption of a corporate declination of criminal charges if a company voluntarily self-discloses misconduct and cooperates early and fully. 

In this issue:

On May 23, 2017, the United States Court of Appeals for the District of Columbia affirmed the dismissal of a challenge to the U.S. Treasury’s  use of Section 311 of the USA PATRIOT Act against Andorran bank Banca Privada d’Andorra (BPA) by the bank’s majority shareholders. 

On April 14, 2017, the U.S. District Court for the District of Columbia upheld the Treasury Department’s use of Section 311 of the USA PATRIOT Act to impose “special measures” with respect to Tanzanian Bank FBME, Ltd. 

In this issue: