Overview
On February 10, 2025, President Trump signed an executive order, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security, directing the Attorney General, Pam Bondi, to pause FCPA actions until she issues revised FCPA enforcement guidance that promotes American competitiveness and efficient use of federal law enforcement resources. Despite the shift in DOJ’s FCPA enforcement policy, companies should still maintain robust anti-bribery/anti-compliance practices, as other legal risks – such as related US domestic laws and laws in international business environments, as well as the potential for SEC FCPA enforcement - remain.
What is the FCPA?
In brief, the FCPA, enacted in 1977, makes it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Amendments to the FCPA made in 1998 also require companies whose securities are listed in the United States to meet its accounting provisions. These accounting provisions require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls. Violations of the FCPA carry significant criminal and civil penalties. In recent years, stepped-up enforcement of FCPA violations has resulted in large fines for major multinational corporations.
Basis for New EO
The EO reflects the President’s determination that “current FCPA enforcement impedes the United States’ foreign policy objectives and therefore implicates the President’s Article II authority over foreign affairs”. The EO further states that “overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security”.
President Trump has long argued that overeager FCPA enforcement harms the competitiveness of American businesses abroad, saying in 2012 that “the world is laughing at us” over the overly-strict statute. According to some reporting, President Trump initially had intended to repeal the law during his first term. Proponents of the law, on the other hand, consider it an important tool in combatting corruption.
The EO was issued shortly after the Attorney General directed the Department of Justice’s FCPA Unit to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and Transnational Criminal Organizations, and shift focus away from investigations and cases that do not involve such connections”. This direction was conveyed via a February 5thmemorandum in which the Attorney General described prior Presidential direction to “revise existing national security and counter-narcotics strategies to pursue total elimination of Cartels and TCOs”.
DOJ Implementation of New EO
The EO directs the Attorney General to review guidelines and policies governing investigations and enforcement actions under the FCPA for a period of 180 days from the date of the EO’s issuance. (The Attorney General may extend the review period for another 180 days at her discretion.). During the review period:
- No new FCPA investigations or enforcement actions will be initiated unless the Attorney General determines that an individual exception should be made.
- All existing FCPA investigations or enforcement actions will be reviewed in detail and appropriate action taken to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives; and
- Updated guidelines or policies will be issued to adequately promote the President’s Article II authority to conduct foreign affairs and prioritize American interests, American economic competitiveness with respect to other nations, and the efficient use of Federal law enforcement resources.
All new or continued FCPA investigations and enforcement actions shall be governed by the new guidelines and must be specifically authorized by the Attorney General. Subsequent to completion of the review, the Attorney General is required to determine whether additional actions, including remedial measures with respect to inappropriate past FCPA investigations and enforcement actions, are warranted and shall take any such appropriate actions or, if Presidential action is required, recommend such actions to the President.
Considerations for Business Entities and Individuals
- Although it seems highly probable that updated guidance and policies issued subsequent to the Attorney General’s review will continue to reflect the Trump administration’s shifting enforcement priorities towards Cartels and TCOs, absent Congressional repeal or revision the FCPA remains a federal statute with serious criminal and civil penalties for violations.
- The statute of limitations for anti-bribery violations of the FCPA is five years; the statute of limitations for accounting violations is six years. Enforcement actions therefore may be taken beyond the term of the current administration.
- In addition to DOJ enforcement actions, the Securities and Exchange Commission has FCPA enforcement authority for civil violations against companies with publicly traded securities in the US. There have as yet been no changes announced with regard to SEC’s enforcement focus, although this may change with the confirmation of a new SEC Chair.
- Conduct that could give rise to an FCPA violation may also violate other federal laws such as those prohibiting extortion affecting interstate or foreign commerce, as well as state laws. Further, anti-bribery and anti-corruption laws, such as the UK Bribery Act, may be found in various jurisdictions throughout the world.
Given the above, companies should continue to maintain robust anti-bribery/anti-corruption compliance programs. Strong compliance programs remain invaluable mechanisms for both minimizing legal risk and positively influencing corporate reputation.
