Glossary term
Deferred Prosecution Agreement (DPA)
Subject: Compliance and Regulation, Regulatory Supervision and Enforcement
Also known as: Non-trial resolution, Deferred resolution
A deferred prosecution agreement is a deal in which a prosecutor files or holds criminal charges against a company but pauses them, on condition it pays, cooperates and reforms; if it complies, the charges are dropped.
Explanation
DPAs are used mainly for corporate crime, such as bribery, fraud and sanctions breaches, in countries including the United States, the United Kingdom and France. The company admits or does not contest a statement of facts, agrees to pay a financial penalty and give up gains, to cooperate with the investigation, and to improve its compliance programme. An external monitor may be appointed. In the UK, a judge must approve the agreement as fair and in the interests of justice. If the company keeps its promises through the term, usually a few years, the case is closed; if not, the prosecution can resume. Other non-trial resolutions, such as non-prosecution agreements, are similar but may not involve filed charges. Prosecutors choose it when a conviction would cost innocent employees their jobs and the firm its public contracts, yet the conduct still needs a serious response.
Example
A construction group discovers that agents bribed officials abroad to win contracts. It reports the matter and cooperates fully. The prosecutor agrees a DPA: the company pays a penalty and surrenders profits, replaces senior managers and accepts an independent monitor for three years. After the term, the charges are dismissed.
Not to be confused with
- Data Processing Agreement (DPA)
- The same initials are used for a contract between a data controller and processor. It has nothing to do with prosecution.