On October 4, 2023, Deputy Attorney General Lisa Monaco announced the next (but not final) chapter of the U.S. Department of Justice’s concerted attempt to promote voluntary corporate self-disclosure of misconduct with a new Mergers & Acquisitions Safe Harbor Policy.


The DOJ in recent years has expressed a commitment to creating clear, predicable, and standardized policies that incentivize companies to voluntarily self-disclose misconduct to the government, which the Department describes as the “clearest path for a company to avoid a guilty plea or an indictment.” Just this year, for example, the DOJ adopted a new policy creating a national standard for voluntary self-disclosure credit in corporate criminal enforcement actions brought by U.S. Attorneys’ Offices.

The DOJ has now extended these efforts to mergers and acquisitions, a space the Department acknowledged confronts “geopolitical risks” and “the danger of unintended consequences.” The DOJ has never had a uniform approach to voluntary disclosures around these transactions, with only some DOJ components addressing mergers and acquisitions in their voluntary self-disclosure policies before now. The new Safe Harbor Policy, however, will apply Department-wide and each component is responsible for tailoring application of the Safe Harbor Policy to its respective enforcement mandate.

The Safe Harbor Policy

Under the new Safe Harbor Policy, an acquiring company will receive a presumption of a declination of prosecution if:

  • The company discloses discovered misconduct at the acquired entity within 6 months “from the date of closing,” regardless of whether the discovery was pre- or post-acquisition;
  • The company cooperates with the ensuing investigation; and
  • The company engages in requisite, timely and appropriate remediation, restitution, and disgorgement, including full remediation of the identified misconduct no more than 1 year from the date of closing.

Prosecutors have the authority to extend the 6-month disclosure deadline and the 1-year remediation deadline under a “reasonableness analysis” that considers the “specific facts, circumstances, and complexity of a particular transaction.” 

The DOJ also made clear that its analysis of aggravating factors “will be treated differently in the M&A context”—aggravating factors present at the acquired company “will not impact in any way” the acquirer’s ability to receive a declination. Further, misconduct disclosed under this Safe Harbor Policy will not be factored into any future recidivist analysis for the acquiring company.   

Under the Safe Harbor Policy, an acquired entity with no aggravating factors is similarly eligible for applicable voluntary self-disclosure benefits if its acquirer voluntarily self-discloses. 

Scope of Safe Harbor Policy

The Safe Harbor Policy will only apply to criminal conduct discovered in “bona fide, arms-length M&A transactions.” An acquiring company that discovers misconduct related to national security or that involves “ongoing or imminent harm” cannot wait until the Safe Harbor deadline to report. Misconduct that was otherwise required to be disclosed or already known to the DOJ is not eligible under the Safe Harbor. The Safe Harbor Policy also will have no impact on the Department’s civil merger enforcement.


A few key takeaways from the new Safe Harbor Policy and the accompanying remarks from Deputy Attorney General Monaco:

  1. Importance of Compliance Personnel: Throughout her remarks, Deputy Attorney General Monaco stressed the need for compliance to have a “prominent seat at the deal table.” Companies interested in pursuing a merger or acquisition should ensure that the necessary compliance personnel are actively and meaningfully involved in the potential deal.
  2. Timely and Effective Due Diligence: The DOJ’s new Safe Harbor policy is a good reminder that companies engaged in a potential merger or acquisition must conduct thorough and timely due diligence to identify potential misconduct. Effective due diligence becomes even more important with the DOJ’s deadline that any misconduct must be disclosed within six months of a deal closing.
  3. More to Come: The Safe Harbor Policy is likely not the final word from the DOJ, with Deputy Attorney General Monaco previewing that we “should expect more to come on this topic.” The DOJ is “doubling down on clarity and predictability” as it seeks to extend its corporate enforcement policies across the Department beyond the criminal context to other areas such as breaches of affirmative civil case settlements and violations of CFIUS mitigation agreements or orders.

About MVA White Collar Defense, Investigations, and Regulatory Advice Blog

As government authorities around the world conduct overlapping investigations and bring parallel proceedings in evolving regulatory environments, companies face challenging regulatory and criminal enforcement dynamics. We help keep our clients up to date in these fast-moving areas and to serve as a thought leader.

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