Walmart Deferred Prosecution Agreement: What You Need to Know
In June 2019, Walmart entered into a Deferred Prosecution Agreement (DPA) with the Department of Justice (DOJ) over alleged violations of the Foreign Corrupt Practices Act (FCPA). The agreement requires Walmart to pay $282 million in penalties and establish a number of internal controls to prevent future FCPA violations.
So, what is the Walmart deferred prosecution agreement and why is it significant? Here is everything you need to know about this historic agreement.
What is a Deferred Prosecution Agreement?
A Deferred Prosecution Agreement is a contract between a corporation and the government, typically the DOJ, where the corporation agrees to pay a fine or penalty and take specific steps to remediate its conduct. In exchange, the government agrees to defer prosecution of the corporation for a specified period of time, usually three years.
If the corporation meets the terms of the agreement, the government will dismiss the charges. However, if the corporation fails to comply with the agreement, the government can move forward with prosecution.
What Did Walmart Do?
According to the DOJ, Walmart allegedly violated the FCPA by making improper payments to foreign officials in Brazil, China, India, and Mexico to secure business advantages. The DOJ also alleged that Walmart’s internal controls were inadequate to detect and prevent these violations.
Under the DPA, Walmart agreed to pay $282 million in penalties, to continue to cooperate with the government’s ongoing investigations, and to implement a number of internal controls to prevent future FCPA violations, including:
– The creation of a dedicated compliance team to oversee and manage the company’s global anti-corruption compliance program
– The enhancement of anti-corruption and anti-bribery training for all employees
– The implementation of an enhanced third-party due diligence program that includes pre-engagement and periodic reviews of third-party agents and business partners.
Why is the Walmart DPA Significant?
The Walmart DPA is significant for a number of reasons:
– It is the largest ever penalty assessed by the DOJ for violations of the FCPA.
– It underscores the DOJ’s commitment to combating corporate corruption and bribery, regardless of the size or status of the company.
– It serves as a reminder to all companies of the importance of effective internal controls to prevent and detect FCPA violations.
– It provides guidance on best practices for anti-corruption compliance programs.
Conclusion
The Walmart DPA is a significant event in the world of corporate law and anti-corruption enforcement. It is a reminder that no company is above the law and that effective internal controls are critical for preventing and detecting FCPA violations. By entering into the DPA, Walmart has taken a step towards remedying its conduct and preventing future violations.