President Donald Trump signed an executive order directing the Department of Justice (DOJ) to halt enforcement of the Foreign Corrupt Practices Act (FCPA), a move aimed at preventing U.S. businesses from falling behind their international competition. The decision, announced this week, seeks to review the existing and past actions tied to the law and develop new enforcement guidelines. This pause in criminal prosecutions is intended to align the FCPA with both economic interests and national security.
The FCPA, enacted in 1977 and amended in 1998, prohibits American companies and certain foreign firms from bribing foreign officials to secure or retain business. The 1998 amendment extended its jurisdiction to foreign companies and individuals initiating such bribery within U.S. borders. Violators of this act face severe penalties, including a maximum criminal sentence of 15 years in prison and a fine of up to $250,000. The fines can also reach three times the monetary equivalent of the bribe demanded by foreign officials.
In recent years, enforcement actions under the FCPA have been notable. In 2023, there were 17 enforcement actions announced, while 2024 saw an increase with the DOJ announcing actions in 24 cases related to alleged violations of the act. These figures highlight the act's significant role in combating corruption and maintaining fair business practices on a global scale.
A White House official stated,
"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."
The executive order has sparked discussions about the implications of pausing such a pivotal regulation. While some argue that this could weaken global anti-corruption efforts, others believe it could provide an opportunity to refine the law in a way that supports U.S. businesses without compromising ethical standards.
The DOJ will now undertake a comprehensive review of both the current and historical applications of the FCPA. This review aims to craft new guidelines that balance effective enforcement with considerations for U.S. economic interests.
Leave a Reply