On Deferred Prosecution Agreement and Non-Prosecution Agreement for Corporate Crimes: Lessons from the United States.

In recent years, U.S. federal prosecutors have shifted their stance from prosecuting and convicting large corporations to dropping charges in exchange for promises to reform corporate governance structures. In the field of corporate crime, prosecutorial goals are sometimes grander, with prosecutors seeking to reform the way companies do business going forward. This paper examines the Deferred Prosecution Agreement (after this referred to as DPA) and Non-Prosecution Agreement (after this referred to as NPA) for corporate crime in the United States. The grand jury (U.S. District Court for the Southern District of Texas) indicted an accounting firm, Arthur Andersen LLP, in federal court for obstruction of justice. It badly damaged Andersen’s reputation, causing many clients to abandon the firm, and its eventual conviction led to the loss of its auditing license. Although unanimous Supreme Court Justices later overturned the conviction, the original indictment and conviction had already crippled Andersen beyond recovery and resulted in the loss of 75,000 jobs. Many firms have taken away the lesson of avoiding criminal charges and the disastrous collateral consequence in response to this result. Prosecutors would also prefer to avoid the hard choice of either letting companies off the hook or indicting them when it could mean another Andersen-like collapse and substantial harm to innocent shareholders and employees. Thus, we have entered an era in which prosecutors and corporations are choosing the third option. Some countries have introduced this system. Japan is no exception. Indeed, Japan does not currently have a DPA/NPA, but it uses plea bargaining against corporations. The Japanese criminal justice system began a new leaf according to an amendment to Japan’s Criminal Procedure Code in May 2016. In marked contrast to the plea bargaining system in the U.S., the Japanese system is only available to individuals/companies who provide evidence or testimony with the charges against or crimes of other individuals or corporate entities. Finally, the author discusses whether the Japanese version of plea bargaining works correctly, referring to the discussion in the United States