FCPA Freeze and Refocus: Is Enforcement Becoming a Tool to Promote U.S. Economic, Foreign Policy and National Security Interests?
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On February 10, 2025, President Trump signed an executive order instructing the Attorney General of the United States to pause enforcement of the Foreign Corrupt Practices Act ("FCPA") and to issue updated guidelines for enforcing the statute that "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."1 The executive order came only days after Attorney General Pamela Bondi had issued a memorandum instructing prosecutors to prioritize drug cartels and transnational criminal organizations in FCPA enforcement.
Notwithstanding the administration's dramatic shift in approach to FCPA enforcement, companies should remain focused on anti-bribery and corruption compliance and, as warranted, internal investigations, given the five-year statute of limitations for FCPA offenses and the ability to toll that period for up to an additional three years, the U.S. Securities and Exchange Commission's parallel enforcement authority with respect to issuers (at least for now), and enforcement regimes in foreign countries and at multilateral development banks. We will continue to monitor these developments and analyze how they may affect corporate and individual clients.
Significant Changes in Foreign Corrupt Practices Act Enforcement
The executive order adds that the FCPA "has been systematically"—and to a "steadily increasing degree"—"stretched beyond proper bounds and abused in a manner that harms the interests of the United States" by impeding foreign-policy and national-security objectives, including "the United States and its companies gaining strategic business advantages whether in critical minerals, deep water ports, or other key infrastructure or assets." The executive order further states that U.S. interests have been harmed by the "overexpansive and unpredictable FCPA enforcement against American citizens and businesses—by our own Government—for routine business practices in other nations."
The executive order instructs the Attorney General, during a 180-day period that she may extend for an additional 180 days, to:
- review existing guidelines and policies governing FCPA enforcement,
- not initiate any new FCPA investigations or enforcement actions unless she authorizes an exception,
- review existing FCPA investigations and enforcement actions and take appropriate action consistent with the objections of the executive order, and
- issue updated guidelines or policies regarding FCPA enforcement consistent with the objectives of the executive order, with the provisos that, thereafter, (i) any FCPA investigation or enforcement action must be specifically authorized by the Attorney General and (ii) the Attorney General "can determine whether additional actions, including remedial measures with respect to inappropriate past FCPA investigations and enforcement actions, are warranted."
The executive order follows over a dozen memoranda issued by Attorney General Bondi, one of which provides new guidance related to Department enforcement of the FCPA.2 Although this memorandum appears to be subject to the enforcement pause and review required by the executive order (and it remains to be seen whether and to what extent this memorandum will continue to govern FCPA enforcement), it directs the Criminal Division's FCPA Unit to "prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and transnational criminal organizations," consistent with another executive order directing "total elimination" of drug cartels and transnational criminal organizations ("TCOs"). Further, it instructs prosecutors that the FCPA Unit should "shift focus away from investigations and cases that do not involve such a connection." The memorandum also suspends, for all matters relating to foreign bribery associated with cartels and TCOs, two requirements that appear in section 9-47.110 of the Justice Manual: (1) that the Criminal Division authorize any investigations or prosecutions under the FCPA or the Foreign Extortion Prevention Act ("FEPA"), and (2) that trial attorneys in the Fraud Section conduct FCPA or FEPA investigations and prosecutions. The memorandum provides that United States Attorney's Offices can pursue such investigations on their own and bring charges with 24 hours' advance notice to the FCPA Unit. The Attorney General similarly instructed the Money Laundering and Asset Recovery Section ("MLARS"), including a team of prosecutors that focuses on using criminal prosecution and civil asset forfeiture to combat foreign corruption, to prioritize investigations, prosecutions and asset-forfeiture actions targeting cartels and TCOs.
Implications for Anti-Bribery and Corruption Compliance
For several reasons, companies should not take the administration's changed approach to FCPA enforcement as a reason to let down their guard when it comes to anti-bribery and corruption compliance and internal investigations. First, regardless of DOJ's approach to FCPA enforcement during this administration, the FCPA remains binding law, and any misconduct that occurs during the next four years would still be within the statute of limitations during the next administration, when DOJ's priorities may be different. The limitations period could then be tolled for up to three years under 18 U.S.C. § 3292, as often occurs in FCPA cases where the government seeks to obtain evidence from foreign jurisdictions. Second, the executive order does not directly address the Securities and Exchange Commission's ("SEC") enforcement of the FCPA with respect to issuers, although the concerns that animate the executive order would appear to apply with equal force to both the SEC and the DOJ. Notably, SEC enforcement lawyers reportedly will need to seek approval from the Commission for all formal orders of investigation, including those involving potential FCPA violations. Third, foreign jurisdictions and multilateral development banks have their own anti-bribery and corruption enforcement regimes, notably including the UK Bribery Act and the World Bank's sanctions system, and many corporations subject to the FCPA also are subject to these laws and regimes. The pause in FCPA enforcement may result in other jurisdictions increasing enforcement of their respective anti-bribery and anti-corruption laws.
Moreover, although we await the forthcoming guidance from the DOJ, it would be reasonable to assume that this guidance will resemble, at least in part, the Attorney General's memorandum (summarized above). That memorandum shows that the DOJ intends to enlist resources traditionally dedicated to the investigation of white-collar and corporate crime in the fight against drug cartels and other TCOs, including, potentially, by focusing FCPA enforcement on investigations of foreign bribery that facilitate the criminal activities of cartels and TCOs. Although the memorandum authorizes U.S. Attorney's Offices to investigate and prosecute such cases, many U.S. Attorney's Offices and other Criminal Division sections already lead complex investigations of cartels and TCOs. Because these offices will have access to cooperating witnesses and other evidence relating to these organizations' criminal activities, they will be in the best position to pursue FCPA investigations involving cartels and TCOs. If the directive in the Attorney General's memorandum remains in effect, the FCPA Unit would undoubtedly pursue its own cartel and TCO investigations, in partnership with U.S. Attorney's Offices. But, given the many other DOJ offices that potentially could bring these cases on their own, and the likelihood that there will be a relatively limited number of such investigations with conduct that satisfies the FCPA's jurisdictional prerequisites, let alone the elements of the statute, the FCPA Unit likely will retain significant bandwidth to pursue other investigations.
It remains to be seen how the Department will deploy those resources, but one possibility—given the executive order's concern with the impact of FCPA enforcement on U.S. companies and U.S. national interests—would be to prioritize investigations and prosecutions of non-U.S. companies. Consistent with the executive order's emphasis on pursuing FCPA enforcement that prioritizes the competitiveness of U.S. companies, the focus of FCPA investigation and enforcement could even shift more overtly to companies and individuals operating in countries considered adverse to political or economic goals endorsed by the administration. There is precedent for this approach: during the prior Trump administration, the then-Attorney General announced that one of the goals of DOJ's China Initiative was to identify FCPA cases involving Chinese companies that competed with U.S. businesses. The FCPA Unit may continue to receive information about misconduct at such companies through a variety of sources, including information provided by cooperating witnesses, referrals from foreign authorities, tips submitted through the Corporate Whistleblower Awards Pilot Program, news reports, data analytics, and voluntary self-disclosures by companies themselves. It also remains to be seen how the administration's actions regarding FCPA enforcement will affect reports by individuals or companies pursuant to the Department's whistleblower and voluntary self-disclosure programs.
1 Executive Order, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security (Feb. 10, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-to-further-american-economic-and-national-security/.
2 Dep't of Justice, Total Elimination of Cartels and Transnational Criminal Organizations (Feb. 5, 2025) available at https://www.justice.gov/ag/media/1388546/dl?inline.
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