In a landmark move under its revised Corporate Enforcement Policy (CEP), the U.S. Department of Justice (DOJ) recently issued its first-ever M&A-related declination. The DOJ’s decision to decline prosecution of White Deer Management LLC, a private equity firm that self-disclosed export control and sanctions violations discovered following the acquisition of Unicat Catalyst Technologies LLC, a portfolio company, sends a clear message: timely self-disclosure and robust compliance can materially reduce enforcement risk — even in national security-sensitive transactions.

Here, the DOJ bent its own rules to reward proactive disclosure, full cooperation and remediation, marking a pivotal moment for companies navigating post-closing compliance risks and reinforcing the growing value of proactive disclosure and cooperation. For government contractors, acquirers of government-facing businesses, or companies navigating export and sanctions exposure, this case offers a blueprint for minimizing risk through disciplined diligence and disclosure.

Here are 5 things you need to know:

  1. First-of-Its-Kind Action: This decision was the DOJ’s first declination under its M&A policy announced in March 2024, setting a precedent for future enforcement decisions.
  2. Compliance Drove Favorable Outcome: The DOJ emphasized self-disclosure, cooperation, and remediation – even amid aggravating facts like senior executive involvement.
  3. Late Disclosure Still Rewarded: White Deer Management disclosed misconduct 10 months post-acquisition – beyond the CEP’s 6-month window – yet still received a declination. DOJ credited COVID-related integration delays, among other factors. This decision supports the DOJ’s May 2025 revisions to the Corporate Enforcement Policy, which signaled concrete benefits for companies that self-report.
  4. Post-Close Compliance Integration Efforts Are Critical: The DOJ showed willingness to consider integration delays in its leniency calculus. That means acquirers should document integration efforts, particularly where compliance reviews are slowed by staffing, systems, or external factors like COVID-era disruptions.
  5. Shift Toward Predictability: The case may lead more companies to voluntarily disclose misconduct, thanks to increased clarity and potential finality in DOJ resolutions. For acquirers, this demonstrates that proactive, good-faith disclosures can still yield significant benefits.

Government enforcement risk doesn’t end at closing – especially in M&A involving government contracts, defense, or international operations. Knowing when and how to disclose misconduct can make the difference between a declination and prosecution. This case underscores the need for government-savvy due diligence teams that can spot red flags, assess risk under sanctions, export control, and False Claims Act regimes to guide remediation and disclosure strategies.

Fluet’s government contracts, government enforcement, compliance and M&A attorneys routinely support deal teams in identifying legacy liability, advising on voluntary disclosures, and managing regulatory exposure. In national security and government contract transactions, that insight is critical – and increasingly, it pays dividends.

Need help evaluating risk in a government-facing acquisition? Contact Fluet to uncover compliance risks, mitigate enforcement exposure, and build regulatory confidence into your M&A deal from day one.