Two recent actions combine to signal an overhaul of the executive branch’s long-standing policy toward the enforcement of the Foreign Corrupt Practices Act (FCPA): (1) The issuance of the new Attorney General’s Memorandum entitled Total Elimination of Cartels and Transnational Criminal Organizations Cartels (February 5, 2025); and President Donald Trump’s Executive Order entitled Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security (February 10, 2025).
In general, the FCPA (15. U.S.C. 78dd-1 et seq) prohibits U.S. companies, issuers of securities trading on a U.S. exchange, U.S. persons, and persons acting within the territory of the U.S. from making or promising to make corrupt payments to foreign government officials to obtain or retain business. The statute, enacted in 1977, followed the disclosure of certain U.S companies’ foreign business improprieties during the 1970s Watergate investigations and prosecutions.
In addressing the FCPA, the Bondi February 5 Memo effects changes regarding the prioritization of FCPA investigations and prosecutions. Substantively, it designates international cartels as terrorist organizations and declares a national emergency in response to the threats they pose to US interests. It directs the Department’s FCPA Unit and the Money Laundering and Asset Recovery Section to prioritize investigations of cartels and transnational criminal organizations (TCOs), and describes bribery intended to “facilitate human smuggling and the trafficking of narcotics and firearms” as examples of cases that should be prioritized. This substantive change in the Department’s view of prosecutorial focus is markedly different from the approach to the enforcement of the FCPA during the President’s first administration.
The Bondi Jan. 5 Memo also effects changes to internal DOJ processes and procedures regarding the handling of FCPA investigations and prosecutions. In the Memo, Attorney General Bondi announced that the Department was suspending the internal approval requirements for multiple drug trafficking-related charges and eliminating the traditional requirement that US Attorneys offices obtain authorization from the Department before conducting FCPA investigations and that all such prosecutions would be handled by DOJ’s Criminal Fraud Unit. Now, any US Attorney’s office may initiate a FCPA investigation without any notice to the FCPA unit and the only requirement is that the US Attorney’s office provide the Fraud Unit 24-hour notice before seeking an indictment on FCPA charges.
The Trump Feb. 10 Order goes even farther in articulating this Administration’s change in focus of enforcement of the FCPA. In fact, it implicitly argues against the enforcement of the statute against traditional US businesses at all by asserting that
. . . overexpansive and unpredictable FCPA enforcement against American
citizens and businesses — by our own Government —for routine business
practices in other nations … actively harms American economic competitiveness
and, therefore, national security. FCPA enforcement harms the interests of the
United States, defined generally as “global economic competitiveness of
American companies…
As a result of the view of the new administration, the Trump Feb. 10 Order pauses the initiation of new FCPA enforcement actions for a renewable period of 180 days and orders a “review” of all current FCPA investigations or enforcement actions. It also directs the Attorney General to issue guidelines or policies that promote the President’s authority to regulate foreign affairs that include issues related to the regulation of American companies’ foreign business activity.
The Bondi Jan. 5 Memo and Trump Feb. 10 Order demonstrate that this Administration has effected a dramatic change in the Department’s handling of FCPA investigations and prosecutions. Previously, DOJ targeted corruption across a broad range of companies and industries that fell within the ambit of the statute, regardless of the otherwise non-criminal nature of the business operations related to the alleged bribe. Now, the Department has changed the focus of its enforcement effort away from such traditional U.S. companies and their engagement with officials or representatives of foreign governments and will now focus upon the activities of cartels and criminal enterprises.
The change in DOJ’s focus of FCPA enforcement should not lull US companies during business in foreign countries; companies must continue to remain vigilant in efforts to assure that the company is not engaging in foreign bribery. DOJ is not the only US governmental body engaged in enforcing an international standard of business conduct. Moreover, several European countries have similar or even more restrictive standards than the FCPA and may determine, in light of the change in DOJs focus, to become even more aggressive in their enforcement efforts.
