Please also see our analysis on the Executive Order’s effects for Latin American interests in English and Spanish.
Please click here for the Italian translation.
On February 10th, U.S. President Donald Trump signed an executive order directing the Department of Justice not to initiate new investigations and enforcement actions under the Foreign Corrupt Practices Act (“FCPA”) until it completes a review and issues revised enforcement guidelines. The administration’s rationale is that enforcement of the FCPA has been unpredictable, thereby putting American individuals and companies at a disadvantage when operating in other jurisdictions and adversely affecting foreign policy priorities and the President’s authority over foreign affairs.
The FCPA attempts to combat international corruption and corporate bribery in two main ways: by (1) making it illegal to offer to foreign officials anything of value to retain business; and (2) requiring U.S. issuers to maintain proper records and internal accounting controls. The administration’s new focus, as announced by the Attorney General’s recent memorandum, prioritizes use of the FCPA to go after Cartels and Transnational Criminal Organizations (“TCOs”).
Pursuant to the executive order, the Attorney General has 180 days to complete her review. In the meantime, the Attorney General has also been instructed/empowered to:
- Cease initiation of any new FCPA investigation or enforcement action, unless the Attorney General determines that individual exceptions should be made;
- Take appropriate actions, considering the policy considerations set out in the executive order, with respect to existing FCPA investigations or enforcement actions;
- Issue new FCPA guidelines and policies that are consistent with the policy considerations set out in the executive order; and
- Determine if additional actions with respect to past FCPA investigations and enforcement actions are to be taken to remediate the concerns expressed in the executive order.
How does this impact non-U.S. companies?
As noted above, on February 5th, Attorney General Bondi issued a memorandum outlining a shift of priorities towards fighting and eradicating TCOs. The Attorney General also rescinded a requirement in the Department of Justice’s Manual – a standard operating procedures manual for the Department – that FCPA investigations and prosecutions be conducted by trial attorneys in the Fraud Section of the Department of Justice for all matters involving TCOs. Under the new guidance, Assistant US Attorneys seeking to bring such charges need only provide the FCPA unit with 24 hours’ advance notice of an intention to seek charges (and make available any existing memoranda related to contemplated charges).
It remains to be seen what this recent guidance means for foreign companies, including but not limited to companies operating in the Canadian, UK, European and LatAm markets. Many countries have robust anti-corruption laws and have been increasing their own anti-corruption enforcement. In addition, the statute of limitations under the FCPA will outlast the current administration in the United States, therefore any bribery or corrupt activity could still be prosecuted under the next administration.
Non-U.S. companies operating in the United States territory, should be aware that the US Securities and Exchange Commission (“SEC”) retains civil authority to enforce the FCPA anti-bribery and accounting provisions against companies with publicly traded securities in the United States. The SEC has yet to announce any modifications to its FCPA enforcement program.
Companies should continue to enforce anti-corruption compliance programs and would be well advised to maintain a careful focus on FCPA compliance.
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