Pause in FCPA Enforcement under the New Trump Administration
Question: Do we need to change our approach to compliance in light of the White House Executive Order pausing FCPA Enforcement?
Answer: On February 10, 2025 President Trump issued an Executive Order with potential significant implications for enforcement of the Foreign Corrupt Practices Act (FCPA). The Order is “pausing” FCPA enforcement in order to “further American economic and national security.” The immediate implications of the Executive Order are directions to the Attorney General to pause initiation of any new FCPA investigations and conduct an internal review of currently ongoing enforcement actions. In addition, the Attorney General is directed to issue updated guidelines and policies with respect to new FCPA enforcement that would reflect prioritizing American interests and economic competitiveness. The Attorney General’s memos emphasized the shift away from corporate enforcement and focus on areas such as immigration, human trafficking, cartels and gangs.
All of the above may have significant implications for FCPA enforcement under the current administration. However, the FCPA remains the law that has not been amended or repealed, and we would not recommend adjusting your approach to compliance or revising your current anti-bribery and corruption compliance programs, or changing your business practices in light of this Executive Oder.
While the Executive Order referred to the current FCPA enforcement as “over expansive and unpredictable” and harming “American economic competitiveness,” which will likely result in amore limited view on the FCPA jurisdiction, it does not mean that there will be no enforcement of bribery and corruption-related offenses. With respect to the civil FCPA enforcement by the Securities and Exchange Commission (SEC),it will likely “follow the lead” of the Department of Justice, but it remains to be seen what would be the enforcement priorities and whether more changes will follow.
Since the Executive Order focuses on the American economic security, we may see more FCPA enforcement actions with respect to foreign entities that are subject to FCPA jurisdiction (traded on a US stock exchanging or having another significant nexus), particularly where circumstances suggest that such foreign companies may have engaged incorruption to gain strategic business advantage over US companies.
Furthermore, other anti-bribery and corruption regimes globally remain intact, meaning there will be little change in attitudes towards anti-corruption for globally operating companies. Bribery is still illegal in the US and all other jurisdictions, and numerous countries have even increased enforcement of bribery in recent years.
Finally, the underlying law – the FCPA, passed by the US Congress in 1977, remains unchanged, providing anything of value to foreign government officials in order to obtain or retain business remains a crime and could be subject of prosecution. The statute of limitations for violations of the FCPA is five years, which can also be extended, so the next administration can re-prioritize enforcement under the FCPA and focus on the conduct and violations that took place during the current administration.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
Question: Do we need to change our approach to compliance in light of the White House Executive Order pausing FCPA Enforcement?
Answer: On February 10, 2025 President Trump issued an Executive Order with potential significant implications for enforcement of the Foreign Corrupt Practices Act (FCPA). The Order is “pausing” FCPA enforcement in order to “further American economic and national security.” The immediate implications of the Executive Order are directions to the Attorney General to pause initiation of any new FCPA investigations and conduct an internal review of currently ongoing enforcement actions. In addition, the Attorney General is directed to issue updated guidelines and policies with respect to new FCPA enforcement that would reflect prioritizing American interests and economic competitiveness. The Attorney General’s memos emphasized the shift away from corporate enforcement and focus on areas such as immigration, human trafficking, cartels and gangs.
All of the above may have significant implications for FCPA enforcement under the current administration. However, the FCPA remains the law that has not been amended or repealed, and we would not recommend adjusting your approach to compliance or revising your current anti-bribery and corruption compliance programs, or changing your business practices in light of this Executive Oder.
While the Executive Order referred to the current FCPA enforcement as “over expansive and unpredictable” and harming “American economic competitiveness,” which will likely result in amore limited view on the FCPA jurisdiction, it does not mean that there will be no enforcement of bribery and corruption-related offenses. With respect to the civil FCPA enforcement by the Securities and Exchange Commission (SEC),it will likely “follow the lead” of the Department of Justice, but it remains to be seen what would be the enforcement priorities and whether more changes will follow.
Since the Executive Order focuses on the American economic security, we may see more FCPA enforcement actions with respect to foreign entities that are subject to FCPA jurisdiction (traded on a US stock exchanging or having another significant nexus), particularly where circumstances suggest that such foreign companies may have engaged incorruption to gain strategic business advantage over US companies.
Furthermore, other anti-bribery and corruption regimes globally remain intact, meaning there will be little change in attitudes towards anti-corruption for globally operating companies. Bribery is still illegal in the US and all other jurisdictions, and numerous countries have even increased enforcement of bribery in recent years.
Finally, the underlying law – the FCPA, passed by the US Congress in 1977, remains unchanged, providing anything of value to foreign government officials in order to obtain or retain business remains a crime and could be subject of prosecution. The statute of limitations for violations of the FCPA is five years, which can also be extended, so the next administration can re-prioritize enforcement under the FCPA and focus on the conduct and violations that took place during the current administration.
*The contents of this message, current at the date of publication, are for reference and general informational purposes only and do not constitute legal advice. You should contact your attorney to obtain advice with respect to any particular legal matter. You should not act or refrain from acting on the basis of information in this publication without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
