A deferred prosecution agreement, or DPA, is a deal in which a prosecutor agrees to hold criminal charges in abeyance if a company meets strict conditions. Those usually include a large penalty, remediation, and a monitor, over a set period.
Key takeaways
- A deferred prosecution agreement holds criminal charges in abeyance.
- The company avoids prosecution by meeting strict conditions.
- Conditions usually include a penalty, remediation, and often a monitor.
- It differs from a guilty plea, where the company is convicted.
- It is used in major AML, sanctions, and corruption cases.
- HSBC resolved its 2012 AML case through a DPA.
On this page
What it isHow it worksWhat it containsVs a guilty pleaVs a consent orderIn AMLThe criticismHow firms respondFAQsRead more
What is a deferred prosecution agreement?
A deferred prosecution agreement is a way of resolving a criminal case without a conviction. A prosecutor charges a company but agrees to hold, or defer, the prosecution, on condition the company does what the agreement requires.
If the company meets the conditions over the set period, the charges are dropped. If it does not, the prosecution can go ahead. In effect, the company is on probation, with prosecution hanging over it as the consequence of failure.
It is a common outcome in large corporate cases. Read more: the failures behind them often trace to a weak AML compliance program.
How a DPA works
A DPA follows a clear structure, built around conditions and time. The company is charged but given a path to avoid conviction.
- Charges are filed. The prosecutor brings criminal charges against the company.
- An agreement is reached. Prosecution is deferred in exchange for conditions.
- The company complies. It pays penalties, remediates, and accepts oversight.
- Charges are dropped. If the company meets the terms, the case ends without conviction.
The set period is often several years, giving the prosecutor time to see whether the company truly reforms.
What a DPA contains
A DPA sets out both the punishment and the conditions for avoiding conviction. Several elements are standard.
- A financial penalty. Often a very large fine or forfeiture.
- Remediation. A requirement to fix the failures that led to the case.
- A monitor. In many cases, an independent monitor to oversee progress.
- An admission. Usually an acknowledgment of the underlying facts.
The monitor is often the sharpest part. An outsider inside the company, checking its progress, is a powerful and uncomfortable form of oversight.
DPA vs a guilty plea
A DPA and a guilty plea are two ways a corporate criminal case can end, and the difference is conviction. One avoids it; the other does not.
Under a DPA, charges are deferred and, if conditions are met, dropped, so there is no conviction. Under a guilty plea, the company admits guilt and is convicted. A conviction can carry heavier consequences, such as losing licenses or being barred from certain business, which is part of why prosecutors sometimes prefer a DPA for a company whose collapse would harm others.
| Deferred prosecution agreement | Guilty plea | |
|---|---|---|
| Conviction | No, if conditions are met | Yes |
| Outcome | Charges dropped after the term | A criminal conviction |
| Example | HSBC (2012) | BNP Paribas (2014) |
Both bring large penalties and remediation; the key difference is whether a conviction is recorded.
DPA vs a consent order
A DPA also differs from a consent order, though both resolve matters by agreement. The line is criminal versus regulatory.
A DPA is a criminal tool, agreed with a prosecutor to defer criminal charges. A consent order is usually a civil or regulatory tool, agreed with a regulator to settle an enforcement action. A major case can feature both, a DPA with prosecutors and consent orders with regulators, each resolving a different kind of exposure.
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DPAs in AML
Deferred prosecution agreements have played a central role in the largest AML cases. They are how several major banks resolved serious failings.
The classic example is HSBC, which in 2012 entered a five-year DPA and paid about $1.9 billion after admitting weak AML controls that let drug-cartel money flow through the bank. The case, with its large penalty and independent monitor, became a template for how AML failures at big institutions are resolved. Not every case ends this way; BNP Paribas instead pleaded guilty in 2014 over sanctions breaches, showing prosecutors will sometimes require a conviction.
The criticism of DPAs
DPAs are not without controversy, and the criticism is worth understanding. It centers on whether they let big companies off lightly.
Critics argue that DPAs allow large firms to avoid the full consequences of serious wrongdoing, paying a fine instead of facing conviction, a concern sometimes summed up as too big to jail. Supporters counter that a conviction could destroy a company and harm innocent employees and customers, and that a DPA with a heavy penalty and forced reform can be more effective. The debate reflects a real tension between accountability and collateral damage.
How firms respond to a DPA
A company under a DPA has one overriding job: meet every condition and reform for real. A few priorities shape the response.
- Deliver on the terms. Pay penalties and complete required remediation.
- Work with the monitor. Cooperate fully with any independent oversight.
- Reform genuinely. Fix the culture and controls, not just the paperwork.
- Sustain it. Keep the improvements in place beyond the DPA term.
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Frequently asked questions
What is a deferred prosecution agreement?
A deferred prosecution agreement, or DPA, is a deal in which a prosecutor agrees to hold criminal charges in abeyance if a company meets strict conditions. Those usually include a large penalty, remediation, and a monitor, over a set period. If the company meets the conditions, the charges are dropped; if it does not, the prosecution can proceed.
How does a deferred prosecution agreement work?
A DPA follows a clear structure: the prosecutor files criminal charges, prosecution is deferred in exchange for conditions, the company complies by paying penalties, remediating, and accepting oversight, and the charges are dropped if the company meets the terms. The set period is often several years, giving the prosecutor time to see whether the company truly reforms before the case ends.
What is the difference between a DPA and a guilty plea?
Under a DPA, charges are deferred and, if conditions are met, dropped, so there is no conviction. Under a guilty plea, the company admits guilt and is convicted. A conviction can carry heavier consequences, such as losing licenses, which is part of why prosecutors sometimes prefer a DPA for a company whose collapse would harm innocent employees and customers.
What is the difference between a DPA and a consent order?
A DPA is a criminal tool, agreed with a prosecutor to defer criminal charges. A consent order is usually a civil or regulatory tool, agreed with a regulator to settle an enforcement action. A major case can feature both, a DPA with prosecutors and consent orders with regulators, each resolving a different kind of exposure the company faces.
What does a DPA contain?
A DPA typically contains a financial penalty, often a very large fine or forfeiture; a requirement to remediate the failures that led to the case; in many cases an independent monitor to oversee progress; and usually an admission acknowledging the underlying facts. The monitor is often the sharpest part, placing an outsider inside the company to check its progress.
What was the HSBC deferred prosecution agreement?
In 2012, HSBC entered a five-year deferred prosecution agreement and paid about $1.9 billion after admitting weak anti-money laundering controls that let drug-cartel money flow through the bank. With its large penalty and independent monitor, the case became a template for how AML failures at big institutions are resolved, and the DPA expired in 2017 without prosecution.
Why are DPAs criticized?
DPAs are criticized because some argue they let large firms avoid the full consequences of serious wrongdoing, paying a fine instead of facing conviction, a concern summed up as too big to jail. Supporters counter that a conviction could destroy a company and harm innocent employees and customers, and that a heavy penalty with forced reform can be more effective.
Are DPAs used in money laundering cases?
Yes. Deferred prosecution agreements have played a central role in the largest AML cases and are how several major banks resolved serious failings. The classic example is HSBC in 2012. Not every case ends this way, though; some, such as BNP Paribas in 2014, involve a guilty plea instead, showing prosecutors will sometimes require a conviction rather than a DPA.
What is a monitor in a DPA?
A monitor is an independent person or firm appointed under many DPAs to oversee the company’s progress in meeting its conditions and reforming its controls. The monitor reports on whether the company is genuinely fixing the failures that led to the case. It is a powerful and uncomfortable form of oversight, placing an outsider inside the company for the duration of the agreement.
What happens if a company breaches a DPA?
If a company breaches a DPA by failing to meet its conditions, the prosecutor can proceed with the criminal charges that were deferred. The live threat of prosecution is what gives the DPA its force and gives the company every incentive to comply and reform. Breaching the agreement can therefore lead to the very prosecution the DPA was meant to avoid.
Does a DPA require admitting guilt?
A DPA usually requires the company to acknowledge the underlying facts, often through an agreed statement of facts, but it is not the same as a guilty plea or a conviction. The company accepts responsibility for the conduct without being convicted. The exact form of admission varies by case, but a factual acknowledgment is a standard feature of most corporate DPAs.
Why do prosecutors offer DPAs?
Prosecutors offer DPAs partly for the continuing hold they keep: because the threat of prosecution remains live throughout the term, the company has every incentive to reform, cooperate, and meet its conditions. A DPA can also avoid the collateral damage a conviction might cause to innocent employees and customers, while still imposing a heavy penalty and forcing genuine reform of the company’s controls.
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Last reviewed July 12, 2026 · 11 min read · Written for compliance and risk professionals · By the WhoWiki editorial team
Key takeaway: a deferred prosecution agreement lets a company avoid prosecution by meeting strict conditions, so criminal charges are held in abeyance rather than pursued.