International

On February 10, 2025, President Donald Trump issued an executive order pausing enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days. This directive instructs Attorney General Pam Bondi to suspend new FCPA investigations and review existing ones to develop revised enforcement guidelines aimed at enhancing American economic competitiveness and national security. The administration contends that current FCPA enforcement hampers U.S. foreign policy objectives and places American businesses at a disadvantage by restricting practices common among international competitors.

DOJ's New Focus: Targeting Cartels and TCOs

The executive order was issued less than a week after Attorney General Bondi circulated a memorandum titled “Total Elimination of Cartels and Transnational Criminal Organizations.” This memo directed the Department of Justice to prioritize prosecuting FCPA violations linked to cartels and transnational criminal organizations (TCOs), signaling a shift from traditional corporate enforcement to a focus on organized crime.

Historical Context: A Shift in Enforcement Strategy

Since its enactment in 1977, the FCPA has been a cornerstone of U.S. anti-corruption efforts, with successive administrations expanding its enforcement. The Obama administration, for instance, intensified FCPA enforcement, resulting in record-breaking settlements. The current pause suggests a shift in focus, emphasizing the elimination of cartels and TCOs over traditional corporate corruption cases.

Implications for Businesses: Maintaining Vigilance Amid Uncertainty

The temporary suspension of FCPA enforcement presents potential opportunities and challenges for companies operating internationally. Key considerations include:

• Sustaining Compliance Programs: Despite the enforcement pause, companies should continue to uphold robust compliance programs to mitigate potential future liabilities and maintain ethical standards.
• Reevaluating Risk Exposure: Businesses must assess their exposure to corruption risks, particularly in dealings that may involve cartels or TCOs, given the DOJ's renewed focus in these areas.
• Strategic Decision-Making: Companies should exercise caution and not interpret the enforcement pause as an opportunity to engage in previously avoided high-risk activities, as future enforcement policies remain uncertain.

Practical Recommendations: Proactive Compliance Strategies

To navigate this evolving regulatory environment, businesses should:

• Stay Informed: Monitor developments in FCPA enforcement policies and be prepared to adapt compliance strategies accordingly.
• Maintain Ethical Practices: Continue to enforce strong ethical standards to prevent misconduct that could lead to future enforcement actions once the pause is lifted.
• Consult Legal Counsel: Engage with legal experts to understand the implications of the enforcement pause and ensure ongoing compliance with applicable laws.

While the executive order temporarily halts FCPA enforcement, companies must remain vigilant. Maintaining robust compliance programs and ethical business practices is essential to mitigate risks during this period and beyond.