DOJ Announces Safe Harbor Policy for Voluntary Self-Disclosures in Mergers and Acquisitions

Under a new U.S. Department of Justice ("DOJ") policy related to mergers and acquisitions ("M&A"), DOJ will decline to prosecute an acquiring company for misconduct by an acquired company where the acquiring company timely and voluntarily self-discloses the wrongdoing, cooperates, and remediates.

On October 4, 2023, Deputy Attorney General ("DAG") Lisa O. Monaco delivered remarks announcing a new M&A Safe Harbor Policy (the "Safe Harbor Policy"), which will apply across all DOJ divisions. The Safe Harbor Policy, which builds upon a similar policy previously applied by the DOJ's Criminal Division in Foreign Corrupt Practices Act cases, is the latest in a series of DOJ corporate enforcement policy updates, including revisions to the Criminal Division's Corporate Enforcement Policy and a new Voluntary Self-Disclosure policy for U.S. Attorneys' Offices announced earlier this year.

Under the Safe Harbor Policy, to receive a presumption of a declination from DOJ, an acquiring company in a "bona fide, arms-length" M&A transaction must:

  • Voluntarily self-disclose the suspected misconduct at the acquired entity within six months of the date the deal closed, whether the conduct is discovered pre- or post-acquisition;
  • Cooperate with any ensuing DOJ investigation; 
  • Fully remediate the misconduct within one year from the closing date; and 
  • Pay any applicable restitution or disgorgement. 

DAG Monaco noted that the post-closing timelines for self-disclosure (six months) and remediation (one year) "are subject to a reasonableness analysis," reflecting the DOJ's understanding that "deals differ and not every transaction is the same." As a result, the deadlines could be extended by prosecutors in certain cases. But, as DAG Monaco noted, the inverse is also true where there is a threat to national security or ongoing or imminent harm; in these circumstances, companies that have discovered wrongdoing cannot wait for the deadline to self-disclose. Nevertheless, as Acting Assistant Attorney General Nicole M. Argentieri stated in follow-up remarks on October 10, 2023, "while early reporting is best, self-reporting late is always better than never," and companies who miss the deadline may still be eligible for "significant benefits," such as penalty reductions and the form of the resolution.

Under the Safe Harbor Policy, the presence of aggravating factors at the acquired entity, such as involvement by senior management, does not impact the acquiring company's ability to receive a declination; those aggravating factors may, however, preclude the acquired entity from receiving otherwise applicable voluntary self-disclosure benefits. The Safe Harbor does not apply to misconduct that was otherwise required to be disclosed (e.g., under a non-prosecution or deferred prosecution agreement) or to misconduct already known by the DOJ. Additionally, DAG Monaco noted that the Safe Harbor Policy will not impact DOJ's civil merger enforcement.   

While the Safe Harbor provides additional incentives for companies to self-disclose potential misconduct at an acquired entity, companies should promptly gather and analyze as much relevant information as possible before deciding whether to self-disclose. Given the policy's deadlines, timely and thorough compliance-related pre-acquisition due diligence, post-acquisition testing, and integration are important considerations in M&A transactions. 

As with other DOJ policies incentivizing voluntary self-disclosure and remediation, the path to receiving the Safe Harbor Policy's full benefits is a narrow one that leaves prosecutors with significant discretion. Companies considering whether to self-disclose under the Safe Harbor Policy must carefully weigh the pros and cons of self-disclosure, including the incentives provided by the policy, as well as potential collateral consequences, such as civil litigation, parallel investigations by other enforcement authorities (including authorities in foreign jurisdictions, where applicable), and regulatory actions. 

Insights by Jones Day should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request permission to reprint or reuse any of our Insights, please use our “Contact Us” form, which can be found on our website at This Insight is not intended to create, and neither publication nor receipt of it constitutes, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.