Justice Department issues guidelines for companies inability-to-pay claims

  • US justice

The U.S. Justice Department on Tuesday issued guidance for federal prosecutors to use in cases where companies claim they can’t pay a criminal fine.

As The Wall Street Journal reports, the move is designed to give prosecutors and companies more transparency around what to expect in cases where financially troubled companies are faced with criminal penalties, Assistant Attorney General Brian Benczkowski said during a speech at a New York conference for white-collar defense lawyers.

“Our aim is for companies to work diligently to deter criminal wrongdoing before it ever needs the attention of the Department of Justice, but also to make wise decisions about how to approach us when things do go wrong,” Benczkowski, who leads the department’s criminal division, said.

Negotiations between prosecutors and companies are typically confidential. In one recent case, involving Odebrecht SA, the Justice Department appeared to accept the Brazillian company’s claims that it could not pay a $4.5 billion fine. The fine was to be split between governments in the U.S., Brazil and Switzerland. U.S. prosecutors agreed to subject the fine to an inability-to-pay analysis at a later date.

The guidance issued Tuesday instructs prosecutors to look at several considerations when assessing a company’s claims, including its ability to raise capital and factors that led to its financial condition. Prosecutors are also encouraged to consider whether a possible fine could affect a company’s ability to pay restitution to victims, according to the guidance. Read the full story. 

Business Report | October 9th, 2019