In February, the Trump administration paused enforcement of the Foreign Corrupt Practices Act and has since shifted to an ‘America First’ approach. Global Insight assesses the impact on international anti-corruption efforts.

‘It sounds good on paper but practically it’s a disaster,’ US President Donald Trump told reporters of the country’s nearly half a century old foreign bribery law. ‘It has made it very very hard from a practical standpoint to make deals.’

Trump made the comments in the Oval Office moments before he signed an executive order to halt enforcement of the Foreign Corrupt Practices Act (FCPA). The pause, which lasted from February to June, was unprecedented and sent shockwaves through the international community. To end the pause the Department of Justice (DOJ) published new enforcement guidelines promising investigations and prosecutions which prioritise US national security and economic interests alongside investigations into cartels.

‘For a president to pause enforcement of any statute, whether it’s the FCPA or otherwise, is remarkable and a sea change in approach to law enforcement,’ says Lisa Miller, who resigned from her role as Deputy Assistant Attorney General of the DOJ’s Criminal Division in January. Miller, now a white-collar investigations partner at Sidley Austin, oversaw prosecutions in the Appellate and Fraud Sections and was responsible for some of the highest profile anti-corruption prosecutions brought against companies and individuals.

In the executive order, issued in February, the Trump administration said that ‘overexpansive and unpredictable’ enforcement of the FCPA against US companies and citizens has harmed US economic competitiveness and national security. Introduced in 1977, the FCPA prohibits the bribery of foreign officials by any individuals and companies with a US nexus for business advantages. The legislation was the first of its kind and established the country’s leadership role in anti-bribery enforcement, which influenced the adoption of anti-corruption laws globally and became a powerful deterrent for US and foreign companies. The pause prohibited the opening of new FCPA investigations or enforcement actions while the Attorney General Pam Bondi reviewed all existing cases to restore ‘proper bounds’ on enforcement.

The enforcement pause came on the heels of a memo released by Bondi five days earlier that signalled a reprioritisation of resources in the FCPA unit to investigations of foreign bribery that facilitates the criminal operations of cartels and transnational criminal organisations.

Nicola Bonucci is a Member of the IBA Anti-Corruption Committee Advisory Board and former Director of Legal Affairs at the OECD. He oversaw the drafting and implementation of the 1997 OECD Anti-Bribery Convention, an international agreement, of which the US was fundamental to its creation, which requires its 46 signatory states to criminalise the bribery of foreign officials. ‘At this stage it is a signal,’ he said at the time of the pause, ‘which is certainly not a welcome signal for all those who believe that enforcement so far has not been overenforcement, as it is suggested, but a good and important level of enforcement.’

In response to the enforcement freeze, Bonucci – with former chairs of the OECD Working Group on Bribery, Drago Kos and Mark Pieth, and others – co-wrote a letter sent to Bondi. They argued weakened FCPA enforcement long-term would not restore American competitiveness and security but be likely to put US companies operating abroad at greater risk of bribe solicitation by foreign officials and investigation by overseas enforcement authorities. They also pointed out that the FCPA does not appear to have been disproportionately or overly enforced against US companies because, over the past decade, most defendants in enforcement actions under the Act have not been US businesses but foreign companies and individuals. The US has earned billions of dollars in penalties from FCPA enforcement actions, including over $1.28bn in 2024 alone.

‘The FCPA was fundamental to the anti-foreign bribery drive because of its extraterritorial reach,’ says Pieth, who founded the anti-corruption organisation Basel Institute on Governance. He says that Trump’s claim that FCPA enforcement is bad for business is ironic considering the US, when undertaking a huge diplomatic effort to encourage countries to adopt FCPA-style legislation during the 1990s, had argued the opposite. ‘We said it’s good for competition if we all have the same rules and a level playing field. It was all about commerce in the beginning,’ he says.

Alexander Kramer, a partner at Crowell & Moring and Assistant Chief in the DOJ’s FCPA Unit until February, says the pause was unexpected, especially considering the robust enforcement of the law during Trump’s first term. ‘I would note the turmoil it put companies in in terms of complying with the FCPA because a pause in the law did not mean the law itself was no longer a valid law,’ he says. In 2019, two years into Trump’s first term, the DOJ brought a record-breaking 37 enforcement actions under the FCPA which generated around $1.62bn in corporate penalties, despite Trump’s public criticism of the law.

It is difficult to know what happened during the pause because of the limited public data on investigations and prosecutions. No enforcement actions were announced by the DOJ and at least four of the cases on its books were dismissed. Prosecutors greenlit three FCPA trials to proceed and dropped one, and two corporate monitorships agreed as part of cross-border foreign bribery resolutions were terminated early.

White-collar defence lawyers in the US and Europe who spoke to Global Insight say that during the pause they noticed a sudden decrease in investigations and information requests coming from the Justice Department. Filippo Ferri, a partner at Cagnola & Associati in Milan and Co-Chair of the IBA Business Crime Committee, saw ‘a significant decline’ in extradition requests coming from the US, which have traditionally made up a large part of cooperation between the US and Italy. Stéphane de Navacelle, a partner at Navacelle in Paris and officer of the IBA Anti-Corruption Committee, says between March and August he was told to cease assisting US prosecutors with ‘a very active’ investigation by the Parquet National Financier (PNF), France’s white-collar crime enforcement agency, and the DOJ. The French prosecutor declined to comment. The DOJ did not respond to a request from Global Insight for comment.

De Navacelle says that while the pause had negligible impact on his clients with international business operations and a ‘long term strategy’, in general it was ‘catastrophic’ for client education and increased cynicism towards compliance. ‘I also think companies may be in a better position to fight requests from prosecutors, including in France, with the idea the Trump administration has made it clear that anti-corruption enforcement is a matter of foreign policy and not the law,’ he says.

Limiting burdens for US businesses

The Trump administration ended the enforcement pause two months early with the publication of the DOJ’s much anticipated guidance for FCPA investigations and enforcement in June. The memorandum, written by Deputy Attorney General Todd Blanche, instructs prosecutors to prioritise significant corruption tied to individuals, with a particular focus on foreign bribery schemes that undermine fair competition for US companies and in sectors critical to national security (such as defence, intelligence and critical infrastructure). The guidance also directs the FCPA unit to prioritise corruption linked to cartels and transnational organisations.

Miller, who in her previous role helped draft DOJ policies for corporate criminal enforcement, says the guidance appears to represent more of a tonal shift than substantive changes, allowing for a lot of traditional FCPA enforcement to continue. She rejects the accusation that the DOJ had previously targeted non-serious crimes by US citizens and businesses. ‘The FCPA unit has historically tried to focus on the most serious offences that meet the administration’s priorities,’ she says.

Over the last decade, FCPA enforcement has been characterised by robust enforcement action by the DOJ and the Securities and Exchange Commission – which enforces the civil accounting provisions of the law – with a strong focus on high monetary penalties for serious corporate misconduct and increasing international cooperation.

Miller says, however, while the guidance may not necessarily narrow the scope of potential prosecutions it has to be viewed in the context of the enforcement pause, case dismissals – which have continued since the pause – and resource cuts to the team tasked with prosecuting foreign bribery. Prosecutors in the FCPA unit reportedly dropped from 32 to 15 between January and July. ‘As a practical matter, we may see in the short-term fewer prosecutions brought,’ she says. Companies should still maintain strict compliance controls though, Miller says, because of factors including the five-year statute of limitations for foreign bribery violations, the threat of enforcement from overseas authorities and the possibility the Trump administration could change its direction.

In August, the DOJ announced its first enforcement actions since the pause. One relating to alleged bribery of officials at PEMEX, Mexico’s state-owned oil company, and another relating to an agreement reached with Liberty Mutual over a bribery scheme the insurance company had voluntarily disclosed at its Indian subsidiary. PEMEX did not respond to a request from Global Insight for comment. Liberty Mutual says it welcomes the resolution and has taken ‘decisive steps’ to ‘address the matter.’

White collar crime lawyers in the US say they doubt the guidance will significantly change business attitude towards risk but may provide reassurance that the DOJ is not going to prosecute low-level payments. Kramer says the tighter focus on US national interests might give companies stronger grounds to challenge enforcement actions and investigations based on the specific priorities. ‘Companies are appropriately going to do anything they can to say when an investigation or resolution is not warranted,’ he says. ‘We’re likely to see pushback to either prevent an investigation from going forward or limit the scope.’

The DOJ’s stated aim in the guidance of ‘limiting undue burdens on American companies that operate abroad’ and prioritising cases that impact US economic interests has concerned those who believe it undermines the rule of law and international anti-corruption standards. The guidance states that prosecutors shall consider ‘collateral consequences, such as the potential disruption to lawful business and the impact on company’s employees throughout an investigation.’ Bonucci says this shift in approach may contravene Article 5 of the OECD Anti-Bribery Convention which prohibits countries from considering national economic interest when investigating and prosecuting the bribery of a foreign public official.

Pieth believes the OECD should have issued a direct response against the FCPA enforcement pause and emphasis on US national interests in the guidance. He notes that in 2006 when the UK government forced the Serious Fraud Office (SFO) to drop an investigation into allegations of bribery by a British arms company in Saudi Arabia the OECD Working Group on Bribery, which was chaired by Pieth at the time, publicly criticised the controversial decision. ‘In the case of the UK, we were in the headline news every evening,’ he says. The US is the largest financial contributor to the OECD. In March, the DOJ was absent from meetings of the Working Group on Bribery but resumed attendance in June.

The focus on prosecuting bribery schemes that undermine fair competition for US companies has also raised concerns about the potential targeting of foreign businesses over US businesses. The guidance states that prosecutors will seek to safeguard fair opportunities for US businesses ‘not by focusing on particular individuals or companies on the basis of their nationality’ but by prioritising conduct that ‘most undermines these principles,’ noting that the most significant FCPA enforcement actions have historically been brought against foreign companies. ‘US companies experiencing a disadvantage due to misconduct on the part of foreign companies unquestionably will find a receptive audience in US enforcement agencies for reports of such misconduct,’ says Albert Stieglitz, the former Senior Deputy Chief of the Fraud Section within the DOJ and officer of the IBA Anti-Corruption Committee.

International response

In what many saw as a reaction to the FCPA enforcement pause, the Office of the Attorney General of Switzerland, the UK’s SFO and France’s PNF announced they had formed a new taskforce to strengthen collaboration in anti-corruption investigations in March. The SFO director, Nick Ephgrave, denied the taskforce was created in response to developments in the US but the alliance has indicated to the international community that others may be willing to step up if the US decides to step back from its leadership role in global anti-corruption enforcement.

‘It remains to be seen whether they will have the power or resources to fill any gap left by the US,’ says Simone Nadelhofer, a partner at Schellenberg Wittmer in Switzerland and an officer of the IBA Business Crime Committee. ‘I think it’s too early to tell but they have made it clear that corruption is a top priority for European regulators.’

As part of the DOJ’s prioritisation of investigations of ‘serious misconduct’ the guidance states that ‘FCPA prosecutors should also consider the likelihood (or lack thereof) that an appropriate foreign law enforcement authority is willing and able to investigate and prosecute the same alleged misconduct.’ Miller says this suggests that moving forward the DOJ may defer more matters to foreign authorities rather than pursue multijurisdictional settlements over alleged misconduct. If this is the case, she says, it could be that companies will still try to reach coordinated resolutions with the US to avoid extra penalties down the line. ‘Where potential criminal liability exists for the same facts in multiple jurisdictions, the certainty of a coordinated global resolution with the US may be better for a company from a coverage perspective than a resolution only with one foreign authority, because if the US administration changes again, the company may understandably be concerned that prosecutors will say the statute hasn’t run, you’ve only resolved with the foreign counterparts, but you still have additional US liability,’ she says.

Alex Swan, a partner at Greenberg Traurig in London and an officer of the IBA Business Crime Committee, believes the direction that prosecutors should consider foreign enforcement for cases signals the US is still committed to cooperation with overseas law enforcement agencies and maintaining longstanding international relationships. ‘Looking at whether foreign authorities are willing to carry out investigations will require those networks to be in place to make that very assessment,’ he says. In June, not long after the FCPA guidelines were published, the SFO’s Ephgrave and Matthew Galeotti, the head of the DOJ’s Criminal Division, met in London ‘as part of strengthening their important partnership in tackling financial crime.’

Scott Greytak is Deputy Executive Director at Transparency International US based in Washington. He says that, despite the likelihood of cooperation channels remaining open, cuts to resourcing will have a significant impact on the amount of intelligence that can be shared with overseas partners. ‘One of the best things that the FCPA unit does is collect and share information,’ he says. ‘If you don’t have the same amount of people sitting behind a desk who could share that with partners around the world then it is going to slow down and frustrate the ability of those countries to be able to hold public officials to account and go after corrupt actors.’

Greytak says that beyond the FCPA there is a global trend of weakening anti-corruption frameworks which is harming efforts to tackle foreign bribery. The Trump administration has issued massive cuts to the Public Integrity Section, which prosecutes corruption cases involving government officials and reportedly told the FBI to scale back on investigating white-collar crime. The administration has also removed a requirement under the Corporate Transparency Act for US companies and individuals to report beneficial ownership information.

In addition, the reduction in foreign aid by the Netherlands, the UK and the US is negatively impacting global anti-corruption efforts, with less money devoted to accountability and transparency. ‘There is an entire universal concern that we are taking our foot off the pedal on fighting foreign corruption,’ Greytak says. ‘There [are] going to be more corrupt foreign officials getting away with bribery and able to steal public resources that could have gone to healthcare, education, social services and infrastructure.’

However, the FCPA statute remains very much alive. ‘Even when the White House paused FCPA enforcement there was absolutely no interest in Congress changing or getting rid of the FCPA, from all along the political spectrum,’ Greytak says. ‘It’s not a complete rejection of foreign bribery investigations or enforcement.’

Alice Johnson is the IBA Multimedia Journalist and can be contacted at alice.johnson@int-bar.org