A Deferred Prosecution Agreement (DPA) is a procedure or mechanism through which the government resolves criminal cases against corporations by suspending prosecution or deciding not to proceed with the criminal prosecution of a corporation on terms and conditions set by the government and acceptable to the corporation. The decision to suspend the criminal prosecution of the Corporation and its affiliates is premised on the conditions that the corporation or that alter egos will abide by the terms of the DPA. Where the corporations fully comply with the terms of the DPA, the suspended charges will be dropped, and the corporation will not be viewed as ever committing any crime concerning the dropped charges.
It is important to note that the nature of the crime, the criminal history of the corporation and the willingness to comply with the terms of the DPA are key determinants of whether the prosecutor will exercise the discretion of offering DPA to the corporation. Some of the conditions or terms in the DPA may include payment of penalty, compensation for victims, disgorgement of profit, and implementation of corporate compliance programme or remedial measures in areas of identified gaps in compliance programme under the supervision of a monitor.
People often use DPA interchangeably with a plea bargain or even share the wrong notion that they both mean the same thing. The DPA sharply differs from the plea bargain. Unlike plea bargains, the DPA does not require a conviction or criminal records. The entire process of negotiating and agreeing to the terms of the DPA is done outside the court system in the United States. It is worth mentioning that the United Securities and Exchange Commission adopted DPA as part of its enforcement mechanism for cases of infraction of the SEC Act and FCPA violations.
The practice of DPA has faced severe criticism from persons who feel that the only way to deter or discourage unlawful behaviour is to prosecute the offender and ensure that the punishment imposed by the law is served. Proponents of this school of thought believe that high night-worth criminals may get away with crimes through the DPA procedure. Some expressed that the DPA will ultimately lead to state capture by private enterprises. Worst still, corporations incorporate the cost of fines and sanctions into the financial records as the cost of doing business. To prevent this wrong classification in financial records, expenses or fees associated with DPA should not be tax deductible and must be expressly excluded from deductible allowances in tax legislation.
Whilst the views against DPA may be correct, it should be noted that DPA guarantees compensation for victims of corporate crimes and saves the government the resources required to prosecute corporate crime, which may be expended on public infrastructure. The DPA procedures of countries vary according to national laws. For instance, the practice of DPA in the United States differs from that of the UK. In the UK, before the DPA is finalized, the court must approve the entire arrangement even before it is made public. The United States has no court involvement in the DPA process. The DPA procedures do not need the court’s approval for it to take effect or become binding on the parties. Unlike the United States, the primary concern of the UK court is to ensure that the DPA is in the interest of justice and that the proposed terms are fair, reasonable and proportionate.
