President Trump Pauses New FCPA Enforcement, Initiates Enforcement Review, and Directs Preparation of New Guidance
Client Alert | February 11, 2025
The executive order is among the most significant political developments related to the FCPA in years. Gibson Dunn will continue monitoring these developments and reporting to our trusted friends and clients in the days, weeks, and months ahead.
Yesterday evening, President Trump signed an executive order titled Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security (Feb. 10, 2025), directing the Department of Justice (DOJ) to pause new investigations and enforcement actions under the Foreign Corrupt Practices Act of 1977 (FCPA), conduct a review, and issue revised enforcement guidelines for the statute. In its opening lines, the order asserts that the FCPA has been “systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused” such that its “overexpansive and unpredictable” enforcement “against American citizens and businesses . . . for routine practices in other nations” now impedes U.S. foreign policy objectives. The order requires that the newly appointed Attorney General Pamela Bondi, during a 180-day period that may be extended another 180 days at her discretion, cease initiation of new FCPA investigations or enforcement actions, unless she grants an individual exception.
The order mandates that any FCPA investigations or enforcement actions initiated or allowed to continue afterward must be governed by the revised guidelines and be “specifically authorized by the Attorney General.” Finally, the order directs the Attorney General to “determine whether additional actions, including remedial measures with respect to inappropriate past FCPA investigations and enforcement actions” should be taken by DOJ or, if Presidential action is required, recommended to the President.
This development comes on the heels of last week’s memorandum by Attorney General Bondi—discussed further in our recent analysis—instructing DOJ’s FCPA Unit to prioritize cases that relate to cartels and transnational criminal organizations (TCOs) and shift focus away from cases that lack such a connection, to facilitate aggressive prosecutions in service of the total elimination of cartels and TCOs. In keeping with President Trump’s stated priority of “keeping America safe,” that memorandum and others reflected a clear shift in the Administration’s enforcement priorities to human trafficking and smuggling; TCOs, cartels, and gangs; and protecting law enforcement.
Impetus and Context
The executive order and an accompanying “fact sheet” state that “FCPA overenforcement” has “harmed” U.S. companies doing business in international markets by prohibiting them from engaging in practices that are “common among international competitors,” putting them at a disadvantage against their international peers. The order cites “excessive, unpredictable FCPA enforcement” as impeding the President’s constitutional authority to conduct foreign affairs, which is “inextricably linked with the global economic competitiveness of American companies.” By stopping “overenforcement,” President Trump seeks to “level [the] playing field” and provide U.S. companies with “the tools to succeed globally.” This line of rhetoric resonates with comments President Trump made in a 2012 interview with CNBC, wherein he called the FCPA a “horrible law and it should be changed” because it puts U.S. businesses at a “huge disadvantage.”
Yet, as discussed in our 2020 Year-End FCPA Update, despite predictions to the contrary, sweeping changes did not come to pass during President Trump’s first term. Rather, FCPA enforcement actions increased, with 164 total enforcement actions (including non-prosecution agreements and “declinations with disgorgement”) announced by the DOJ or Securities and Exchange Commission (SEC) during President Trump’s first term (2017-2020)—compared to only 126 during President Obama’s second term (2012-2016) and 96 under President Biden (2021-2024). The current Trump administration’s pronouncements resurrect earlier predictions of the FCPA’s demise—and questions around what an appropriate level of FCPA enforcement should be.
Prior administrations used similar rhetoric around ensuring a level playing field and promoting the rule of law in the fight against TCOs and terrorism as rationales for continued or increased FCPA enforcement. Indeed, corruption has been a continuous focal point in national security strategies of administrations since the 1998 amendments to the statute, if not earlier. The George W. Bush administration pronounced in 2002 that “corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders.” In 2010, the Obama administration similarly recognized corruption as a “severe impediment to development and global security” and as one of the primary vehicles through which TCOs and terrorist organizations had been able to accumulate wealth and power. The first Trump administration’s national security strategy noted in 2017 that “[t]errorists and criminals thrive where governments are weak, corruption is rampant, and faith in government institutions is low” and established a priority action to counter foreign corruption by “[u]sing our economic and diplomatic tools . . . to target corrupt foreign officials and work with countries to improve their ability to fight corruption so U.S. companies can compete fairly in transparent business climates.” And in 2022, the Biden administration referred to the fight against corruption as a “core national security interest.”
Metrics relating to FCPA enforcement do not suggest that U.S. companies are being disproportionately punished, although “overenforcement” is a subjective concept. The “fact sheet” cites only limited statistics in support of its premise that U.S. companies are disadvantaged, including that DOJ and SEC filed “26 FCPA-related enforcement actions” last year with 31 companies under investigation and that an average of 36 FCPA-related enforcement actions per year over the last decade “drain[ed] resources from both American businesses and law enforcement.” Although the totals of FCPA-related enforcement actions, as we have tracked them, are actually greater (40 announced in calendar year 2024 and 46 annually on average over the last decade, as discussed in our 2024 Year-End FCPA Update), focusing on those discrepancies misses the forest for the trees.
Beyond the policy point discussed above, it is important to note that the majority of defendants in FCPA enforcement actions over the past decade have been non-U.S. companies and individuals. Specifically, between 2015 and 2024, according to our data, 50% of all corporate defendants and 62% of all individual defendants in FCPA enforcement actions by DOJ or SEC were foreign. And of the top ten largest monetary recoveries by U.S. authorities resulting from corporate FCPA enforcement actions, foreign companies account for eight, with monetary recoveries amounting to $6.1 billion of the $8.3 billion aggregate total from the “FCPA Top 10” enforcement actions.
Finally, in terms of tying up law enforcement resources, DOJ’s 24 corporate FCPA enforcement actions over the past three years (2022-2024) represented less than 10% of DOJ’s at least 244 negotiated corporate criminal resolutions (i.e., guilty pleas, deferred prosecution agreements, non-prosecution agreements, and declinations with disgorgement) during that period. (And that small fraction has not appeared to require a disproportionate outlay of DOJ resources, insofar as FCPA cases have historically—by design—involved a greater degree of cooperation, voluntary disclosure, and non-trial resolutions than other types of criminal prosecution.) FCPA enforcement actions compose an even smaller fraction of overall enforcement when considering the full range of DOJ criminal investigations and prosecutions against individuals. Although the data do not correspond neatly to our other statistics, to provide a sense of magnitude, during President Trump’s first administration between government fiscal years 2017 and 2020, U.S. Attorneys’ Offices investigated a total of 678,949 suspects, and DOJ charged 326,726 defendants in federal courts according to DOJ’s Bureau of Justice Statistics.
The “fact sheet” and the executive order’s call to enhance national security (citing specifically the need for strategic advantages in critical minerals, deepwater ports, and other key infrastructure or assets around the world) is also not novel. We note that the FCPA provides a limited statutory exemption for matters implicating national security. Specifically, the FCPA exempts issuers from liability under the accounting provisions in matters related to national security when acting under the directive of the “the head of any Federal department or agency . . . pursuant to Presidential authority,” who must report such matters on an annual basis to the Permanent Select Committee on Intelligence of the House of Representatives and the Select Committee on Intelligence of the Senate. 15 U.S.C. § 78m(b)(3). The executive order does not address this exemption; whether the omission was intentional, perhaps signaling a desire to circumvent or reduce congressional oversight of such executive directives, or an effort to expand the exemption in practice to the antibribery provisions, remains an open question.
Open Questions
While the executive order gives a clear statement of President Trump’s priorities with respect to the FCPA, its impact remains to be seen. It is possible that the executive order could herald only a brief pause in new FCPA actions while DOJ brings its enforcement efforts in line with the Administration’s priorities and the directives Attorney General Bondi has already issued. For example, the Attorney General’s February 5, 2025 memorandum authorizing U.S. Attorneys’ Offices to initiate FCPA cases connected to cartels or TCOs without approval by DOJ’s Criminal Division requires some reconciliation with the executive order’s mandate that FCPA actions henceforth be specifically authorized by the Attorney General. Alternatively, the order could mark a material shift in FCPA enforcement, significantly impacting the United States’s historical global leadership in anti-corruption efforts.
Operationally, some immediate questions include the following:
- How, if at all, does the executive order apply to the FCPA’s other enforcer, the SEC? The SEC shares joint authority with DOJ for enforcing the FCPA against issuers, and while the fact sheet references combined DOJ and SEC statistics, the executive order is addressed solely to the Attorney General and gives no direction to the SEC regarding FCPA enforcement. (Nor does the order address the CFTC, which issued an advisory during the first Trump administration announcing its own foreign corruption-related enforcement program.) It is possible that the FCPA may continue to be enforced civilly by the SEC, even as criminal enforcement declines, though this would seem to be at odds with the executive order’s premise that FCPA enforcement interferes with U.S. companies’ ability to do business abroad.
- How will non-U.S. companies fare under the new FCPA enforcement regime? The rhetoric behind the executive order and fact sheet is uniquely protectionist as to U.S. companies. Although FCPA practitioners have long questioned the wisdom of and legal basis for pursuing foreign companies for bribing foreign officials on foreign soil, if the Trump Administration wishes to wield U.S. law as a tool to advantage U.S. companies, one way to do so could be to enhance aggressive prosecutions against foreign companies. This could then lead to serious “selective prosecution” challenges in the U.S. courts, as befell the “China Initiative” in Trump I.
- Four Years, or Forever? Even under the broadest projection of deprioritizing FCPA enforcement, Americans will choose a new leader in just under four years. White collar criminal enforcement has long been a stated priority of Democratic regimes and other Republican regimes alike, and if there is an overcorrection to “FCPA overenforcement” under Trump, there very possibly could be an overcorrection in the opposite direction in the next administration. The challenges of rebuilding a dismantled enforcement apparatus would be real and take time, but the statute of limitations for FCPA cases is five years and can be paused for up to an additional three years as DOJ seeks foreign-located evidence—among other scenarios that toll the limitations period. Whether DOJ will continue to pursue tolling orders and tolling agreements during the enforcement review period remains to be seen.
- Remedial Measures for Past FCPA Enforcement Actions? If the overall executive order is curious, more curious still is a suggestion that part of DOJ’s review will include the pursuit of “remedial measures” associated with past FCPA enforcement actions that may have crossed the FCPA’s “proper bounds” or were somehow abusive. What this will mean in practice remains to be seen, but one prime target could be ongoing compliance obligations associated with recent resolutions, including monitorships and self-reporting. For resolutions announced in coordination with foreign enforcement authorities, revisiting a U.S. resolution may have collateral effects vis-à-vis parallel resolutions announced by foreign enforcement authorities, such as if monetary penalties or forfeiture to U.S. authorities that were originally credited by foreign authorities are reduced.
- How Does this Relate to FCPA-Related Cases? As we frequently note in our enforcement updates, a significant portion of foreign anti-corruption enforcement is actually brought under a myriad of adjacent criminal laws, including money laundering, wire fraud, securities fraud, and other statutes. These actions are not literally covered by the executive order, which is limited to the FCPA, and whether the pause will extend more broadly to “FCPA-related” enforcement remains to be seen. Indeed, one possibility is that international corruption cases initially investigated by DOJ’s FCPA Unit could be redirected to U.S. Attorney’s Offices to charge materially the same conduct under different statutes.
- What About Already-Indicted Cases? DOJ has unilateral authority to “pause” ongoing FCPA investigations that have not yet been charged, but cases that already have been indicted and before the courts will involve an Article III decision-maker. Whether DOJ intends to move to dismiss or stay ongoing cases in the courts remains to be seen. We are aware of one case with an upcoming trial where a judge already has ordered DOJ to state its position in response to the executive order.
Whatever the answers to these questions, the perspective reflected in the order represents a shift from the long-held view that international anti-corruption efforts benefit U.S. businesses by creating a level playing field and strengthening the rule of law—including in countries with a strong presence of TCOs and cartels. One of the original purposes of the statute was to address bribery by U.S. companies that undermined American foreign policy in the 1970s and restore public confidence in the integrity of American businesses following evidence of substantial corruption and international bribery uncovered during investigations following the Watergate Scandal under President Nixon. President Clinton’s signing statement to the 1998 amendments to the FCPA also underscored an intent to level the playing field for U.S. companies that were losing international business opportunities to foreign competitors paying bribes and then deducting them from their taxes in their home countries.
As noted above, the order also marks a fundamental break with a longstanding bipartisan consensus on the role of the United States in combatting international corruption. That consensus was not only domestic but international, with the United States advancing multilateral efforts to bring other countries into the fold as partners in anti-corruption efforts. Indeed, in still-available public online materials, the U.S. Mission to the Organization for Economic Cooperation & Development (OECD) declared that “the United States has led the fight against international bribery” and credits the United States in creating a global “race to the top” by encouraging adoption of the 1997 OECD Anti-Bribery Convention, to which the U.S. also acceded in 1999. It is not yet clear whether the Administration’s executive order and stance on FCPA enforcement will be in line with U.S. obligations under the OECD Anti-Bribery Convention and other international treaties such as the United Nations Convention Against Corruption.
Whatever its ultimate implementation, the executive order is among the most significant political developments related to the FCPA in years. We will continue monitoring these developments and reporting to our trusted friends and clients in the days, weeks, and months ahead.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these issues. We have more than 110 attorneys with FCPA experience, including a number of former federal prosecutors and SEC officials, spread throughout the firm’s domestic and international offices. Please contact the Gibson Dunn attorney with whom you work, or any of the following leaders and members of the firm’s Anti-Corruption & FCPA practice group:
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