Matthew Galeotti’s recent memorandum as head of the Department of Justice’s (DOJ’s) Criminal Division echoes the Trump administration’s “America First” priorities. It directs the Criminal Division to “strike an appropriate balance” in investigating and prosecuting criminal wrongdoing “while minimizing unnecessary burdens on American enterprise.”
This objective would be achieved through, among other means:
- A refined and more transparent Corporate Enforcement and Voluntary Self-Disclosure Policy.
- A de-emphasis on corporate monitorships.
- A focus on “efficiency” in enforcement decision-making.
- Avoidance of prolonged investigations.
At the same time, however, the memo emphasizes the need to be “laser-focused on the most urgent criminal threats to the country,” including those posed by non-U.S. companies.
Indeed, the memo identifies 10 “high-impact” areas that DOJ will prioritize in investigating and prosecuting white collar crime, drawing particular attention to “threats” or “harms” relating to Chinese companies, organizations or actors, and non-U.S. companies listed on U.S. exchanges.
Key Considerations for Chinese Companies
- U.S.-listed Chinese companies are likely to face continued scrutiny and should remain vigilant against fraudulent practices and potential violations of the U.S. securities laws. Notably, the memo criticizes U.S.-listed Chinese companies that operate under the variable interest entity (VIE) structure, which DOJ claims “provide[s] few protections to investors, facilitate[s] the flow of U.S. investor funds into strategic industries in China, and can be used to facilitate fraud in the U.S. markets.”
- The memo emphasizes the need to prioritize the investigation and prosecution of direct or indirect efforts to evade U.S. tariffs or sanctions. It also directs the Criminal Division to amend DOJ’s Corporate Whistleblower Awards Pilot Program to add corporate sanctions offenses and trade, tariff and customs fraud by corporations to the list of tips leading to forfeiture or seizure of assets.
- Companies operating in or affiliated with China should maintain robust anti-money laundering and anti-terrorist financing policies. The memo identifies complex money laundering schemes and threats to national security as “high-impact” areas and repeatedly warns of what it terms “Chinese Money Laundering Organizations” and the dangers such actors pose to U.S. national security, financial systems and the facilitation of drug trafficking.
- Non-U.S. companies, including those based in China, should continue to be vigilant about anti-bribery enforcement risks. Notwithstanding the February 10, 2025, executive order pausing Foreign Corrupt Practices Act enforcement, one of the 10 “high-impact” areas identified in the memo includes “[b]ribery and associated money laundering that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, and enrich foreign corrupt officials.” Non-U.S. companies are still advised to maintain robust compliance programs to align with U.S. law.
- In cross-border matters, it is critical, if and when cooperating with DOJ, to make every effort to act promptly and efficiently. Although the memo reinforces the importance of self-disclosure, cooperation and remediation to DOJ’s enforcement decisions, the memo also emphasizes the need to “move expeditiously to investigate cases and make charging decisions” so that matters are “swiftly concluded,” including in the cross-border context. (See also “DOJ Unveils White Collar Enforcement Overhaul: New Incentives, Streamlined Policies and Expanded Whistleblower Rewards.”)
Final Thoughts
This latest memo reflects the current administration’s targeted use of DOJ investigative and prosecutorial resources to promote American economic and national security interests. At the same time, non-U.S. companies, especially those in China, face increased enforcement risks, suggesting that robust compliance programs and proactive approaches to addressing potential corporate misconduct will remain extremely important.
(See also “Core False Claims Act Theories Top the List of DOJ Criminal Enforcement Priorities.”)
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.