The Department of Justice (DOJ) of the United States of America (USA), who is responsible of enforcing laws and ensuring public safety against foreign and domestic threats, has detected an opportunity to fully investigate and prosecute corporate crimes. The DOJ has recently implemented the “Department of Justice Corporate Whistleblower Award Pilot Program” (CWAP) seeking to incentivize individuals to provide information that could lead to investigate, identify, seize, and forfeit the assets of sophisticated criminals and their organizations.
These so called “Whistleblowers” are individuals who voluntarily expose to the DOJ information or activities that are deemed illegal, unethical, or not correct within an organization. The DOJ’s proposal with this program is to award these individuals in exchange for information that could lead to a successful civil or criminal forfeiture exceeding USD$1,000,000.00 (one million dollars 00/100).
The provided information must be derived from the individual’s independent knowledge or analysis, the information must not be derived from public or available sources, this means that the information must not be previously known by the DOJ, and it can lead to the desired forfeiture. The information must be related to certain subject matter areas, such as financial institutions, foreign corruption and bribery, companies related to the payments of bribes, health care, or any other violations related to corporate crimes.
Once the DOJ determines that the information provided by the whistleblower is useful, the whistleblower can be eligible for a discretionary award by the DOJ, this award can be 30% when the forfeited amount is less than 100 million dollars, after this amount the award can be 5% up until 500 million dollars forfeited.
This CWAP program must be seriously considered by entities with activity in the USA, even when the seat of the company is in a different jurisdiction. Moreover, since the program is effective since August 1st, 2024, it is advisable for entities with activities in the USA to conduct a thorough review of their conduct and ethic policies and, if necessary, make the appropriate modifications to diminish any potential risk.
It is recommendable that entities that do not yet have preventive models for criminal liability of legal entities, take into account the entry into force of this program to start implementing such programs, and in case they already have them, to remain current with all amendments to the law.
Mexican companies operating in the USA could be facing a significant impact due to strict compliance requirements under USA law, especially with the introduction of the CWAP. A strict adherence to updated policies and internal preventive models is essential to mitigate risks of substantial fines and legal actions. The implementation of transparency and robust internal reporting mechanisms can help detect and address any discrepancies early, potentially averting legal risks. Furthermore, comprehensive employee education on USA regulations in terms of internal compliance, will be crucial in adopting a compliance-oriented culture, reducing the possibility of violations that could lead to severe financial and reputational damage.
Some suggestions may include:
- Policy and Framework Implementation: Mexican companies with activities in the USA should rigorously update their ethics policies and establish internal preventive models in line with USA laws, particularly considering the new DOJ whistleblower program.
- Compliance and Oversight: Improving transparency with robust internal reporting systems, linked with regular legal consultations and audits, is essential to maintain compliance, manage and mitigate risks.
- Employee Education: Educating all employees on compliance and ethical standards is crucial to ensuring adherence to strict USA regulatory requirements and minimizing potential legal and financial repercussions.
