Non-Prosecution Agreement
A non-prosecution agreement (NPA) is a resolution between the U.S. Department of Justice and a corporation or individual in which the government agrees not to file criminal charges at all — rather than merely deferring them as in a deferred prosecution agreement — in exchange for the subject's cooperation with the investigation, payment of monetary penalties, and acceptance of compliance obligations.
The non-prosecution agreement represents the most favorable outcome available to a corporate or individual subject in a DOJ criminal investigation short of a declination (where no charges or agreement are sought). Unlike a deferred prosecution agreement, which involves filing a criminal information in court, an NPA is an entirely out-of-court resolution. No charges are filed, no criminal record is created, and no court supervision is imposed. The agreement is purely contractual, binding through its terms rather than through court enforcement.
NPAs are typically reserved for subjects who have demonstrated substantial cooperation with the government, who have relatively limited culpability compared to primary wrongdoers, or who are individuals rather than corporate entities — particularly where prosecution would create severe collateral consequences disproportionate to the misconduct. In the securities context, cooperating witnesses in insider trading investigations may receive NPAs in exchange for testimony and document production that advances prosecution of the primary targets.
For corporations, the DOJ's Principles of Federal Prosecution of Business Organizations identify factors that favor an NPA over a DPA: the nature, seriousness, and pervasiveness of the misconduct; the corporation's prior history; the corporation's timely and voluntary disclosure; the degree of cooperation and remediation; and the adequacy of the corporation's compliance program. A company that self-reports, fully cooperates, and proactively remediates before the DOJ has initiated an investigation may be positioned to obtain an NPA rather than the more burdensome DPA structure.
NPAs typically require the subject to pay a monetary penalty, cooperate with ongoing investigations, implement specified compliance reforms, and agree that the government may use the factual admissions in the agreement as evidence if the agreement is breached. The government's obligation — not to prosecute — is conditioned on the subject's continued compliance. If the subject breaches the NPA during its term, the DOJ may immediately file criminal charges.
In practice, the line between NPAs and DPAs reflects prosecutorial judgment about the severity of the misconduct and the degree of cooperation. In large securities fraud and FCPA investigations, the DOJ frequently resolves corporate liability through a combination of a DPA with the parent entity and NPAs with cooperating subsidiaries, reflecting the different roles played by different entities in the underlying scheme.
For individual subjects of securities investigations, an NPA — sometimes called a cooperation agreement — represents a negotiated outcome that preserves the person's ability to avoid a criminal conviction in exchange for full cooperation with the government's investigation and testimony against other defendants. The terms of individual NPAs are frequently sealed to protect the cooperating witness.