Despite FCPA Enforcement Pause, Anti-Corruption Should Remain a Compliance Priority

PDF

On February 10, 2025, President Donald J. Trump issued an Executive Order instructing the Department of Justice (DOJ) to temporarily pause Foreign Corrupt Practices Act (FCPA) enforcement and reconsider its enforcement practices moving forward.

Below are some considerations for businesses in light of this Order.

What is the FCPA?

The FCPA is the major federal anti-corruption law in the United States; it broadly prohibits payment of money or “anything of value” to a foreign government official to obtain a business advantage. It also requires publicly traded companies to maintain accurate books and records and to maintain a system of effective internal accounting controls.

FCPA violations can result in large fines, administrative and criminal penalties, extensive investigation and litigation costs, and damage to a company’s reputation. The DOJ and the Securities and Exchange Commission (SEC) share enforcement authority, and both investigate companies for potential violations.

What does the Executive Order do?

The Order states that FCPA enforcement has been “overexpansive” and “unpredictable,” making American companies less competitive in global commerce by punishing them for what would be “routine business practices in other nations.”

The Order points to “critical minerals, deep-water ports, and other key infrastructure or assets” as areas in which the United States needs to gain a competitive advantage but does not provide specific examples of the types of enforcement that it seeks to prohibit. However, the Order builds off a February 5, 2025 memorandum that instructed the Criminal Division’s FCPA unit to prioritize violations that facilitate the operations of Cartels and transnational criminal organizations.

Specifically, the Order requires:

• A pause in new FCPA investigations and enforcement matters for 180 days (which can be extended for another 180 days), with an allowance for individual exceptions;
• A review of current FCPA guidelines and policies during the 180-day period;
• A review of ongoing FCPA investigations and enforcement actions in light of the Order’s foreign policy objectives;
• Issuance of updated guidelines or policies that will govern any future or continued investigations and enforcement actions; and
• A determination of whether remedial actions are required for “inappropriate” past FCPA investigations and enforcement actions.

How should companies respond?

Reliance on DOJ guidance when crafting a corporate compliance program is typically a best practice; thus, extreme changes in a company’s posture prior to the issuance of the new guidance may be premature. While companies should not treat this Order as a hall pass to bribe foreign officials, the Order and resulting guidance may ultimately allow businesses to rethink how they approach foreign official gifts, meals, entertainment, and travel (GMET) and how much of their limited compliance resources they dedicate toward anti-corruption.

Based on what we know now, we recommend that companies continue to maintain and follow their anti-bribery and anti-corruption procedures for the following reasons:

• First, it is not clear what the eventual FCPA policies or guidance will look like or what the Executive Order’s impact will be, but it is unlikely that enforcement will go to zero. Under the first Trump Administration, FCPA enforcement increased from what it was under the second Obama Administration, and it was higher than under the Biden Administration.
• Second, the Order addresses the DOJ only and not the SEC. The SEC may continue to enforce the FCPA civilly against publicly traded companies.
• Third, the FCPA remains law, and the statute of limitations will extend beyond the current administration. The next administration could very well swing the pendulum in the opposite way. Further, federal prosecutors might pursue corruption cases under other legal theories, such as money laundering and mail or wire fraud.
• Fourth, companies will still answer to auditors who consider their exposure to bribery and corruption important and to shareholders and consumers to whom anti-bribery and anti-corruption efforts matter.
• Fifth, the Order focuses on the benefit to American companies, yet many of the largest FCPA enforcement matters in recent years have come against foreign businesses; it is thus possible that foreign companies could still find themselves subject to more robust FCPA enforcement.
• Finally, multinational companies may still be subject to the anti-bribery laws and regulations of other countries, and of the states should they choose to pick up the slack in U.S. anti-bribery enforcement.

Maynard Nexsen will monitor these developments and provide an update after the review period has concluded.