U.S. Suspends Enforcement of the FCPA

On February 10, 2025, President Trump signed an Executive Order titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security” (the FCPA EO). The FCPA EO signals a major shift in US enforcement of laws against international bribery and corruption, and sets in motion a six-month review of the U.S. Justice Department’s (DOJ) overall approach to enforcing the FCPA as well as of each currently pending DOJ FCPA case or investigation.

What the FCPA EO does

For a period of 180 days following February 10, 2025, the Attorney General (AG) is directed to review guidelines and policies governing investigations and enforcement actions under the FCPA. The review is to focus on whether and how FCPA enforcement “adequately promote the President’s Article II authority to conduct foreign affairs and prioritize American interests, American economic competitiveness with respect to other nations, and the efficient use of Federal law enforcement resources.”  Individual investigations are to be reviewed to determine how “to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives.”  The AG can extend this review period, and suspension of enforcement action, for an additional 180 days.  While the suspension is in effect:

There shall be no new FCPA investigations or enforcement actions, unless the AG determines that an individual exception should be made.

The AG shall review “all existing FCPA investigations and enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives.”

The AG shall “issue updated guidelines or policies, as appropriate, to adequately promote the President’s Article II authority to conduct foreign affairs and prioritize American interests, American economic competitiveness with respect to other nations, and the efficient use of Federal law enforcement resources.”

The FCPA EO envisions that the review period will lead to “updated guidelines” which will then govern any future FCPA enforcement action of the DOJ.

Although the EO does not explicitly address FCPA investigations or cases brought by the U.S. Securities and Exchange Commission (SEC), the same concerns that FCPA enforcement impedes the United States foreign policy objectives would also apply to SEC matters involving United States securities issuers. Accordingly, it is likely that once the SEC has a new Chair, a similar pause and review will take place relating to SEC matters.

The FCPA EO further provides that, after the revised guidelines or policies are issued, the AG may commence additional actions, including remedial measures with respect to past FCPA investigations and enforcement actions. At this time, it is not clear what such “actions” would entail.  While President Trump’s criticism of the FCPA dates back to 2012, calling it a “horrible law” before he held elected office, it was regularly enforced during his first term, and an indefinite, total suspension of enforcement should not be presumed.

What the FCPA EO does not do

At the outset, it is important to emphasize that the FCPA remains the law. Its statute of limitations is five years for a criminal violation of its anti-bribery provisions and six years for a criminal violation of its accounting provisions. This means that violations that occurred recently or may occur during the pause could still trigger enforcement actions in the future.

Bribery is still illegal. Moreover, the many other state, federal, and foreign laws prohibiting bribery are still in effect and acts of bribery can still result in civil litigation by private parties. Further, auditors and shareholders expect that companies will comply with all applicable anti-corruption laws and rules. Companies should therefore maintain their anti-bribery and corruption compliance policies and processes.

The SEC retains civil authority to enforce the FCPA against companies with publicly traded securities in the United States.  At the time of writing, the SEC has not indicated that it will pause its FCPA enforcement program. However, given the breadth of the EO and the fact that its rationale would also cover civil enforcement actions, it is likely that the SEC will also pause its docket and conduct a similar review, perhaps in conjunction with the DOJ.

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We will continue to monitor developments in this area, notably any guidance or press release from the SEC or the AG, and encourage you to subscribe to be kept informed of latest developments. Please contact the authors or your usual Herbert Smith Freehills contacts for more information.