President Trump Pauses FCPA Enforcement and Directs for New Enforcement Guideline

On February 10, Republican President Donald Trump signed an Executive Order to suspend the enforcement of the Foreign Corrupt Practices Act (FCPA), which prosecutes American businesses accused of bribing foreign officials.

Trump’s executive order; which claims that corporate anti-corruption laws harm the US’ competitive edge, will stop investigations and prosecutions of corporate misconduct abroad.

When he signed the executive order, Trump confidently declared: “It’s going to mean a lot more business for America”.

The President has directed the Justice Department to halt all prosecutions under the 1977 FCPA. He instructed that no new prosecution should be opened during that time.

According to the White House statement, the FCPA unfairly disadvantages overseas US corporations compared to global competitors by prohibiting them from engaging in practices common among international competitors, which results in an unequal playing field for U.S. corporations.

Foreign Corrupt Practices Act (FCPA) is an anti-bribery regulation enacted to refrain  American firms from bribing when conducting business overseas.

The law, enacted in 1977, has been in force for approx. 5 decades and prevents US corporations from trying to keep or acquire new business with other countries by bribing government officials.

According to Trump, this law “sounds good on paper but in practicality, it’s a disaster.”

The president has previously discussed repealing the Foreign Corrupt Practices Act (FCPA) during his first term in office, calling it a “horrible law” and claiming that “the world is laughing at us” for implementing it.

Pam Bondi, the US attorney general, has been directed to suspend charges under the Foreign Corrupt Practices Act of 1977 until she issues modified enforcement guidance that benefits American competitiveness overseas.

The executive order states, “The new guidance will govern future FCPA investigations and enforcement actions and must be approved by the attorney general.”

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Almost 26 FCPA-related enforcement actions were filed by the Securities and Exchange Commission and the Justice Department in 2024, and by the end of the year, at least 31 companies were being investigated as per the White House Fact Sheet.

Current and former investigators and prosecutors were taken aback by the department’s actions on Monday, which they said were based on political or economic convenience rather than the department’s longstanding practice of holding public officials, business leaders, and others accountable for misconduct.

But halting this enforcement is merely a temporary fix. Within the first 180 days following the pause, the Attorney General will review the FCPA and develop new enforcement recommendations.

It is best to wait until the new regulations are published before deciding how, if at all, to change business procedures and compliance processes.

So, even if the current administration does not take any action against the U.S. businesses accused of bribing foreign officials, the next administration will still be able to take action against the bribery cases that happened during the previous administrations.

Since it is too soon to tell whether the executive order will lead to a long-term change in the enforcement setting experts have urged U.S. businesses to continue operating under rules and procedures designed to ensure compliance with the FCPA and other national and international anti-corruption laws.

This executive order is exclusively for the Department of Justice (DOJ) to follow, not the Securities and Exchange Commission (SEC). But the SEC commissioners might follow as well, it remains unclear what effect the executive order is going to have on civil enforcement.