The Department of Justice (DOJ) announced on October 27, 2026 the first ever “near miss” Non-Prosecution Agreement (NPA) under the 2026 DOJ Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP). Under the NPA, Extreme Networks, Inc. agreed to pay criminal penalties of $975,721.84 to resolve DOJ’s investigation into unlawful sales by the company to a Russian weapons manufacturer owned by a sanctioned entity.[1] The investigation and NPA underscore DOJ’s focus on corporate enforcement in national security matters, the potential benefits of cooperation with the National Security Division (NSD) and DOJ writ large, and the importance of preparing to make prompt, informed decisions after uncovering conduct that potentially warrants self-disclosure.
The CEP: A New Unified Incentive Structure
Historically, DOJ operated under a decentralized, component-specific patchwork of enforcement policies rather than a single, unified standard. As Bracewell has previously discussed, on March 10, 2026 DOJ released a department-wide CEP, which, among other things, seeks to incentivize companies to voluntarily self-disclose discovered misconduct, cooperate with DOJ investigations, and timely remediate identified wrongdoing. In exchange, the CEP outlines potential benefits, including declinations of prosecution. In particular, the CEP provides that a declination will be appropriate when four factors are met: (1) the company voluntarily self-disclosed the misconduct to an appropriate DOJ component (a voluntary self-disclosure or VSD); (2) the company fully cooperated with DOJ’s investigation; (3) the company timely and appropriately remediated the misconduct; and (4) none of the outlined aggravating circumstances are present.[2]
In Appendix B, the CEP also details when a disclosure qualifies as a sufficient VSD: (1) the company makes a “good faith disclosure” of misconduct to the appropriate DOJ component; (2) the misconduct is not previously known to DOJ; (3) the company had no preexisting obligation to disclose the misconduct to DOJ; (4) the disclosure occurs “prior to an imminent threat of disclosure or government investigation,” as also detailed in US Sentencing Guidelines (USSG) Section 8C2.5(g)(1); and (5) the company discloses the conduct to DOJ within a reasonably prompt time after becoming aware of the misconduct, with the burden on the company to demonstrate timeliness.
Short of a full declination, the CEP also sets forth when a company’s disclosure may qualify as a “near miss” VSD. A company that fully cooperates and timely and appropriately remediates may qualify for a “near miss” resolution even if it is ineligible for a declination because its report did not qualify as a sufficient VSD under Appendix B to the CEP, so long as it acted in good faith in self-reporting.[3] In such instances, the CEP establishes that DOJ will (1) provide an NPA, absent particularly egregious or multiple aggravating factors; (2) allow an NPA term length of fewer than three years; (3) not require an independent compliance monitor; and (4) provide a reduction of at least 50 percent but not more than 75 percent off the low end of the applicable USSG fine range.
The Extreme Networks NPA
According to DOJ, between approximately March 2018 and March 2022, Extreme Networks — an AI-powered cloud networking platform — through its then-Russia-based subsidiary, processed and fulfilled 11 purchase orders for networking equipment and services to Moscow Machinery Building Plant Avangard (MMZA). MMZA was a Russian weapons manufacturer owned by JSC Concern Almaz-Antey, which OFAC had added to its Specially Designated Nationals and Blocked Persons List in July 2014, and the Extreme Network sales occurred without the required OFAC license or authorization. To facilitate these unlawful sales, certain Russia-based employees concealed MMZA’s identity as the true end user from the company’s global trade compliance group, causing false export filings and unlawful exports from the United States. In the NPA, the company admitted that the stipulated facts established violations of federal law, including willful export-control and sanctions violations under the Export Control Reform Act, 50 U.S.C. § 4819, and the International Emergency Economic Powers Act, 50 U.S.C. § 1705(a) and (c); knowingly filing false export information under 13 U.S.C. § 305; and smuggling under 18 U.S.C. § 554.
As detailed in the NPA, the company learned of allegations of certain potential misconduct through a whistleblower report in April 2022 and then began a “good faith in-house investigation of those allegations, in consultation with outside counsel.” Several months later, after learning of additional allegations, the company reopened and expanded the internal investigation, which was underway when, in October 2022, the company was contacted by an investigative journalist who requested comment and cited facts previously unknown to the company’s counsel about the misconduct. The company then “quickly retained external counsel” and disclosed the potential violation to NSD in a written VSD days ahead of the publication of the news article. Thus, the self-disclosure did “not meet the CEP’s standard for timeliness and voluntariness because it was submitted in anticipation of imminent public disclosure[.]”
Despite not qualifying for a declination for this reason, in considering the appropriate disposition of the matter, DOJ still gave “significant weight” to the company’s efforts to learn of and disclose the misconduct, including the company’s “good faith efforts to investigate earlier, incomplete allegations of misconduct,” and ultimately determined that the company “received full credit for its cooperation” with DOJ. The NPA describes this cooperation as including timely, rolling responses to subpoenas yielding nearly 400,000 documents and making current and former employees available for interviews. The NPA also identifies remediation measures, including hiring additional compliance personnel, improving screening procedures, and implementing M&A diligence procedures. DOJ’s conclusion that this warranted a “near miss” NPA thus reflected the company’s good-faith efforts to investigate and disclose the misconduct, full cooperation, timely and appropriate remediation, and the absence of aggravating circumstances.[4]
The Takeaway
This first-ever example of a “near miss” resolution under the CEP is instructive for three reasons. First, it emphasizes that, even if DOJ determines that a disclosure does not qualify for a full declination, there may still be meaningful benefits from disclosure, almost as significant as a declination. Second, it underscores, as DOJ officials have maintained in multiple public statements and through the publication of the CEP, that the Department continues to emphasize the value of cooperation with ongoing investigations and the potential benefit to companies which decide to cooperate. And, finally, it highlights the need to prepare to move quickly and decisively when confronted with potential internal misconduct. The Extreme Networks NPA notes that the company “quickly retained external counsel” and disclosed the potential violation to NSD, and gives significant weight to the circumstances surrounding this investigation and disclosure. In sum, companies should establish and refine internal investigation, escalation and disclosure protocols well before allegations arise, and should calibrate these protocols to the CEP, so they can assess potential misconduct promptly and consider disclosure when appropriate. Bracewell’s government enforcement & investigations team is ready to guide companies through this preparation and, should the need arise, engagement with DOJ.
[1] Extreme Networks also entered into a parallel $1,529,685 settlement with the Department of the Treasury’s Office of Foreign Assets Control (OFAC). Under that settlement, $487,861 is deemed satisfied through payments under the NPA, leaving $1,041,824 payable to Treasury.
[2] The presence of aggravating circumstances does not categorically foreclose a declination; instead, the CEP makes clear that prosecutors retain discretion to recommend one based on the circumstances and the company’s disclosure, cooperation, and remediation efforts.
[3] A similar result attaches to companies which adequately self-disclose but are ineligible for a declination owing to aggravating factors that the CEP defines as warranting a criminal resolution.
[4] Although Part II of the CEP provides that DOJ shall allow an NPA term of fewer than three years in such circumstances, the company’s NPA specifies a three-year term, subject to possible early termination.