On February 10, President Trump issued an Executive Order directing Attorney General Bondi to pause enforcement of the Foreign Corrupt Practices Act for 180 days. During the pause, the Attorney General will draft new FCPA enforcement guidelines. Specifically, the order directs the Attorney General to take the following actions during the 180-day review period–
(i) “Cease initiation of any new FCPA investigations or enforcement actions, unless the Attorney General determines that an individual exception should be made.”
(ii) Review existing FCPA investigations or enforcement actions and “take appropriate action * * * to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives.”
(iii) Issue guidelines or policies “to adequately 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.”
FCPA investigations and enforcement actions initiated or continued after the pause will be governed by the new guidelines or policies and must be specifically authorized by the Attorney General. The President also directs the Attorney General to determine whether “remedial measures” are warranted as to past FCPA enforcement matters.
The Executive Order states that the FCPA has been “systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused” and has harmed the interests of the United States. “[N]ational security depends in substantial part on the United States and its companies gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets” and “overexpansive and unpredictable FCPA enforcement against American citizens and businesses” harms American economic competitiveness.
The White House also released a Fact Sheet on the Executive Order. The Fact Sheet adds that ”U.S. companies are harmed by FCPA overenforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field.” The Fact Sheet also notes that, in 2024, the DOJ and SEC filed 26 FCPA-related enforcement actions and that, during the past decade, there has been an average of 36 FCPA-related enforcement actions per year, “draining resources from both American businesses and law enforcement.”
The brief order does not address several key questions, such as —
Does the Executive Order apply to SEC enforcement of the FCPA? By its terms, the order directs only the Attorney General to pause enforcement, although the statistics in the Fact Sheet include SEC cases. As a practical matter, it is likely that the current SEC administration will also observe the pause and will follow the new guidelines when they are issued.
Are ongoing FCPA investigations and enforcement actions paused? The Executive Order only directs the Attorney General to refrain from initiating new investigations and actions. While ongoing matters will be reviewed under the new guidelines when they are issued, it’s not clear what the status of these matters is now.
The Foreign Corrupt Practices Act of 1977 enacted both prohibitions against foreign bribery and accounting provisions that require SEC reporting companies to keep accurate books and records and maintain internal accounting controls. The Executive Order cites the antibribery prohibition applicable to public companies but does not appear to have any impact on enforcement or interpretation of the accounting provisions.
For public companies and their audit committees, the Executive Order should not be taken as a signal to change their practices with respect to FCPA compliance or to begin ignoring any suspected instances of foreign bribery. The tone of the order suggests that the new guidelines will provide companies with more flexibility in their business practices in areas of the world where corruption is common. However, there is no way of knowing at present what these guidelines will permit or how they will be implemented. Moreover, payments to foreign officials may violate other laws to which a company is subject, including the laws of the country in which the payment is made, and may raise difficult securities law disclosure issues.
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