US Presidency Halts FCPA Enforcement, Signaling Setback in Global Anti-Bribery Efforts.

The US presidency recently made a controversial move by pausing the enforcement of the Foreign Corrupt Practices Act (FCPA). This decision, signed into effect by President Donald Trump, has sparked concerns among experts in the field of anti-corruption. Nicola Bonucci, a former Director of Legal Affairs at the OECD, expressed his unease with this decision, stating that it sends a signal that is unwelcome to those who value the current level of FCPA enforcement.

The FCPA, established in 1977, serves as a crucial piece of legislation that prohibits the bribery of foreign officials by individuals and companies for their own gain. Its influence has been felt worldwide, shaping anti-corruption laws globally and promoting a coordinated effort to combat bribery and corruption. Enforcement of the FCPA is split between the US Department of Justice for criminal cases and the Securities and Exchange Commission for civil actions.

In 2024, FCPA enforcement actions resulted in over $1.28 billion in fines and penalties, signaling a strong commitment to combatting corruption. However, the Trump administration believes that FCPA enforcement has been excessive and unpredictable, leading to the executive order pausing new investigations and enforcement actions. This pause is said to be a strategic move to review existing guidelines and policies related to the FCPA.

Experts like Bonucci, along with former chairs of the OECD Working Group on Bribery, Drago Kos and Mark Pieth, have raised concerns about the implications of this pause. They warn that it could potentially expose US companies operating abroad to increased scrutiny by foreign enforcement authorities, ultimately leading to more solicitation and higher costs for doing business internationally. Additionally, they point out that most defendants in FCPA enforcement actions over the past decade have not been US businesses but foreign entities.

Benjamin Borsodi, an officer of the IBA Anti-Corruption Committee, emphasizes the importance of companies continuing to fight against corruption and maintain robust compliance programs. He cautions against taking a step back in the face of the FCPA pause, suggesting that companies should stay vigilant in their efforts to combat corruption.

Despite the concerns raised by experts, other international agencies, such as the Office of the Attorney General of Switzerland, the UK’s Serious Fraud Office, and France’s Parquet National Financier, are strengthening collaboration to combat corruption. This collaboration aims to enhance cooperation among agencies to address cross-border corruption effectively, regardless of the pause in FCPA enforcement.

Overall, the pause in FCPA enforcement has raised significant concerns among experts in anti-corruption. The potential impact on US companies operating abroad, the risk of increased anti-corruption investigations by other authorities, and the implications for multijurisdictional settlements all point to the complex and interconnected nature of global efforts to combat bribery and corruption. It remains to be seen how this strategic pause will affect the broader landscape of anti-corruption efforts in the international community.