DOJ's pause on FCPA is a compliance shake up for businesses

This article was originally published by Bloomberg Law on April 10, 2025, and is republished here with permission. Read the original article here: DOJ’s Pause on FCPA Is a Compliance Shake-Up for Businesses – Bloomberg Law

The DOJ was instructed to develop new enforcement guidelines that prioritize US national security and the competitiveness of US companies abroad, and Attorney General Pam Bondi had previously issued a memorandum directing DOJ prosecutors to prioritize foreign corruption cases linked to transnational criminal organizations and narcotics trafficking cartels, or TCOs, rather than conventional foreign corruption cases.

Despite the Trump administration shifting enforcement priorities, anti-corruption compliance isn’t on its way to meet the same fate as fax machines, BlackBerrys, and floppy disks. Trump’s order speaks to prosecutorial discretion, not legal compliance, meaning companies should double down on anti-corruption compliance, bolster their values-based ethical culture, and adjust risk management to the new reality.

The statute of limitations for foreign corruption violations extends beyond the Trump administration’s term, meaning the next administration’s DOJ can reopen cases the Trump administration doesn’t pursue.

Only Congress can amend criminal foreign corruption statutes, including the FCPA. And once DOJ adopts the forthcoming enforcement guidelines, foreign corruption enforcement will resume, even if it isn’t a top priority.

Trump’s order and Bondi’s memo also don’t directly affect the Securities and Exchange Commission’s civil enforcement authority under the FCPA against publicly traded companies.

Internationally, foreign and multilateral regulators can fill in FCPA enforcement gaps with powerful anti-corruption tools. These include the UK Bribery Act, the French Law Sapin II, the Brazilian Anti-corruption Law, and even sanctions by multilateral development banks such as the World Bank. Multinational companies’ anti-corruption compliance should remain tailored to the requirements of such laws.

Corruption risk mitigation remains an essential component of sound financial management. The hallmarks of anti-corruption compliance protect the financial integrity of companies, generate operational efficiencies, reduce fraud and waste, widen profit margins, bolster employee morale, and shield employees from requests for improper payments.

Anti-corruption compliance provides other benefits for publicly traded companies, such as enhancing compliance with Sarbanes-Oxley and reducing commercial litigation risk from anti-corruption clauses in commercial contracts. For government contractors, anti-corruption compliance reduces debarment risks and that corruption is used as defense or counterclaim in dispute resolution.

Ethical reputation, reinforced by a robust anti-corruption compliance program, continues to be a premium in valuation and leads to business opportunities. It also ensures that employees report concerns internally, instead of blowing the whistle to a regulator or the media, reducing the risk of shareholder lawsuits.

In the short term, the Trump administration’s early moves provide clues about its enforcement priorities and signal how businesses should respond.

The executive order links US national security with strategic business advantages in key infrastructure or assets, potentially including critical minerals, deep-water ports, semiconductor manufacturing, digital and electrical grid infrastructure, nuclear, critical transportation infrastructure, space security, and communications assets. We expect the DOJ to factor national security interests when initiating an investigation, in the form of resolution, and in imposing a monitor.

Multinational company groups that aren’t “predominately American” should be vigilant, as they may be more likely to become targets of FCPA enforcement under the guise of national security—especially companies that pursue opportunities in key national security infrastructure and assets.

Companies operating in areas of TCO activity may be exposed to increased FCPA enforcement risk and even counterterrorism charges. The Trump administration separately designated eight TCOs as Foreign Terrorist Organizations, or FTOs, on Feb. 20, with a standing executive order to designate more.

Seemingly legitimate business partners may have been surreptitiously infiltrated and controlled by TCOs/FTOs. Or companies may face a Hobson’s choice of making protection payments where employees or infrastructure are threatened. DOJ has brought counterterrorism charges in some widely publicized cases for payments to FTOs. Those cases may now include FCPA and Foreign Extortion Prevention Act charges.

Preparation and prevention

With the Trump administration’s pivot in mind, companies should act now to strengthen elements of their programs, including bolstering risk assessment protocols, enhancing due diligence practices, tapping into AI, improving communication and training, and supporting investigation and remediation.

Risk assessments should identify a company’s highest risk relationships and geographies and determine whether areas where it operates are known for TCO/FTO activity. The assessments should include an analysis of cash-intensive activities and whether their industry is vulnerable to criminal infiltration or takeover.

Enhanced due diligence for the highest risk relationships includes undertaking reviews beyond typical due diligence and periodically refreshing it by mapping the corporate structure and identification of ultimate beneficial ownership, using open-source intelligence research, conducting on-site audits and verification of operations, and discrete on-the-ground inquiries.

Other methods could include adverse media research in the local language; social media, geospatial, and dark web research; or coordination with independent journalistic and law enforcement agencies.

AI-powered tools help accelerate pattern and outlier identification when assessing the reasonableness of a transaction or linking information from disparate databases.

Communication and training establish a company’s commitment to integrity and ethics, despite the government’s priority shift. Employees should be trained in risk-sensitive and front-line roles on the new TCO/FTO and national security aspects of foreign corruption enforcement.

Investigation and remediation of improper behavior and the root causes of any violations will insulate companies and might require updating triage protocols to account for the TCO and national security aspects.

Despite the Trump administration’s shift, companies should remain proactive in their anti-corruption efforts focusing on assessing risks and enhancing their due diligence efforts. A robust anti-corruption framework not only safeguards against legal repercussions but also strengthens a company’s ethical reputation and operational integrity.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Authored by Peter Spivack, and Nikolaos Doukellis