President Donald Trump will sign an executive order directing the Department of Justice (DOJ) to pause the enforcement of the Foreign Corrupt Practices Act (FCPA). This decision aims to review current and past actions related to the law and develop new guidelines for its enforcement. The pause is intended to prevent U.S. businesses from facing economic disadvantages compared to foreign competitors.
The FCPA, enacted in 1977, prohibits American companies and certain foreign issuers of securities from bribing foreign officials to obtain or retain business. In 1998, the law expanded its scope to include foreign firms and individuals who facilitate bribes within U.S. borders. Violators of the FCPA can face severe penalties, including up to 15 years in prison and a fine of $250,000 or three times the monetary equivalent of the bribe.
In recent years, enforcement of the FCPA has intensified. In 2023 alone, there were 17 enforcement actions announced related to violations of the FCPA. The following year, the DOJ announced enforcement actions in 24 cases. The upcoming pause in criminal prosecutions will allow for a comprehensive review of these cases and provide an opportunity to streamline the FCPA.
"A pause in enforcement to better understand how to streamline the FCPA to make sure it's in line with economic interests and national security." – A White House official
The executive order will examine how the FCPA aligns with both economic interests and national security objectives. The initiative seeks to ensure that the nearly half-century-old law adapts to contemporary business practices without undermining the competitive edge of U.S. companies on a global scale.
While some critics might view the pause as a potential rollback of anti-corruption measures, proponents argue that it is a necessary step to balance legal enforcement with economic realities. This measured approach aims to maintain stringent anti-bribery standards while safeguarding American businesses from undue burdens.