Foreign Corrupt Practices Act enforcement faces major shift

Paul Manafort, President Trump's first-term campaign chairman, convicted and sentenced for federal offenses related to foreign political consulting work, including bank fraud, tax evasion and failing to disclose an offshore bank account, was pardoned in December 2020, along with others federally convicted of offenses related to or involving foreign countries and foreign operatives.

These pardons were a foreshadowing of the federal approach to foreign corrupt activities in Trump's second term. Less than a month in, on Feb. 10, 2025, Trump issued Executive Order 14209 (EO 14209), ordering a temporary halt to federal investigations and prosecutions arising from or involving foreign corrupt activities. EO 14209 states that American citizens and businesses should not be penalized for "business practices" that are routine in other nations.

The Foreign Corrupt Practices Act (FCPA) was passed by a bipartisan Congress in 1977 in response to defense contractors and oil companies keeping two sets of books and using slush funds to pay bribes to foreign government officials to gain business advantages. The FCPA prohibits U.S. businesses in or operating from the United States--including foreign public companies listed on U.S. stock exchanges--from engaging in corrupt business practices, including bribery. It also contains accounting, record keeping and internal control requirements.

Executive Order 14209 alleges that the FCPA, as enforced by prior administrations, was usurping presidential authority in foreign affairs. As a result, the president directed the attorney general (AG) to create new FCPA guidelines "governing investigations and enforcement actions under the FCPA," to "restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives" and would "prioritize American interests, American economic competitiveness with respect to other nations, and the efficient use of Federal law enforcement resources."

Four months later, on June 9, 2025, Deputy Attorney General Todd Blanche, currently the acting attorney general, authored new "Guidelines for Investigations and Enforcement for the Foreign Corrupt Practices Act."

No longer would there be "burdensome investigations" that disrupt lawful American businesses. FCPA prosecutions could re-commence but under a new initiation structure: The Department of Justice's Fraud Section, which previously had independent authority to initiate such cases, would no longer serve as the starting point for investigations. Instead, only the highest levels of the Department of Justice--the assistant attorney general of the Criminal Division or a more senior official--could initiate such cases. Also, federal prosecutors would need to identify misconduct before starting an investigation that "causes identifiable harm to U.S. interests" involving specific individuals. Prosecutors are to consider the "collateral consequences" ("the economic harm") to the company and its shareholders with bringing such an investigation. Additionally, bringing cases that attribute to the company the actions of a few employees of the company, are discouraged. The guidelines "revised" focus would be on cartels and transnational criminal organizations and threats to national security. There is also a new provision advising that where the foreign government is or should be investigating the conduct themselves, then the United States should not engage in parallel proceedings in the U.S.

The new guidelines are replete with language concerning "the burdens on American companies that operate globally." Previously, under the FCPA, 15 USC 78dd-1, the "facilitation of payments exemption" to bribery applied only to routine government actions that a minor foreign functionary was required to perform. In the past, the exemption has not applied when bribery charges were brought when a company's payment was used to influence a foreign government's decision. See, U.S.v.Kay, F.3d 738, 751 (5th Cir. 2004)("routine governmental action" is a very narrow and largely for "non-discretionary, ministerial activities" by foreign functionaries).

However, now actions "involving routine business practices or the type of corporate conduct that involve[] the minimis or low-dollar, generally accepted business courtesies" are no longer fair game for federal FCPA prosecution.

Nearly one year after the new DOJ FCPA guidelines, the results are in

The DOJ in 2025 closed roughly half of its FCPA investigations initiated or investigated during the Biden administration. President Biden had linked the promotion of good governance and transparency in global financial systems as a core national interest for preserving democracies and promoting "economic equity, global anti-poverty and development efforts ... "

In the first half of 2025, according to Stanford Law's FCPA Clearinghouse, "at least 31 companies appeared to be the subject of ongoing FCPA-related investigations," and the DOJ closed half of those since EO 14209.

Plus, according to a DOJ 2025 report, in the same period, only $122.8 million in settlements had resulted. Compare that with the final year of the Obama presidency, with "record-breaking" FCPA enforcement and total settlements approximating $1.34 billion.

This administration's tailoring of FCPA enforcement on substantial and sophisticated conduct implicating national security by cartels and gangs, or direct economic harm to U.S. interests, creates a new climate for conduct that previous administrations would have considered indictment-worthy.

These DOJ enforcement priority revisions echo the laissez-faire approach taken by the U.S. Treasury with the Treasury's March 2025 suspension of enforcement of Corporate Transparency Act (CTA) against U.S. businesses. No longer will businesses need to report beneficial ownership information under CTA.

The hands-off business interests is also evidenced by the April 2025 disbandment of the DOJ's National Cryptocurrency Enforcement Team, as well as the order to cease investigating the "cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement frauds sector." The Securities and Exchange Commission (SEC) has also abandoned (in the crypto realm) civil consumer-centric actions against cryptocurrency entities including Coinbase, Binance and Kraken.

States are filling the federal FCPA enforcement void

While the feds have switched focus from good governance best business practices, some states are filling the gap. Conduct that would have met federal FCPA statutory language can be violative of state statutes. California, the fourth largest world economy, in response to the feds hands-off approach, issued a legal advisory stating that it will take up the mantle of FCPA and that FCPA violations are actionable under California's Unfair Competition Law (CA-UCL). California's law outlaws fraudulent, illegal and unfair business practices and permits the California attorney general to bring enforcement actions predicated on FCPA violations. CA-UCL also provides for civil penalties, restitution, disgorgement and injunctive relief. Other states, like New York, are well positioned to fill gaps left by the DOJ, as well as Oregon, which too announced that "the states must fill the enforcement vacuum being left by federal regulators."

International businesses must also abide by international laws

The European Union aggressively investigates and prosecutes certain foreign corrupt practices, including bribery, under the Organization for Economic Cooperation and Development's 1997 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention). Currently, 46 nations participate in the OECD Convention, including the U.S. Member nations are required to adopt laws to criminalize bribery in international business transactions. Other countries, like Great Britain, investigate corrupt business practices to include "facilitation payments" per the British Bribery Act, as does France through their French Anti-Corruption Agency, which allows for extraterritorial reach.

The take aways for clients with international interests

Federal criminal exposure can exceed presidential administrations. Typically, an FCPA offense is prosecutable within five years from the criminal act. This five-year window for the FCPA caused some federal senators to introduce the FCPA Reinforcement Act in March, which would extend the statute of limitations as to FCPA bribery violations from five to 10 years.

Companies and their management teams and employees here and abroad always face a patchwork of criminal laws (federal, state, local and international). All can be in play at any one time. Companies should remain hyper-diligent on record keeping, internal investigations, voluntary disclosures and document compliance.

If you have clients who operate overseas or who have foreign interests or subsidiaries, no matter where they are headquartered, urge them to adopt best practices for the long game. That kind of planning can serve to inoculate your clients from changes in the political winds.