WASHINGTON — In a significant shift in U.S. policy, President Donald Trump this week issued an executive order to temporarily halt enforcement of the Foreign Corrupt Practices Act (FCPA), a law that has been instrumental in fighting corruption globally by prohibiting American firms and their foreign affiliates from bribing foreign officials to gain business advantages.
Critics of the FCPA, including Trump, have argued that the law impedes U.S. businesses by putting them at a disadvantage in international markets where bribery is often seen as a customary practice. During the signing at the Oval Office, Trump stated, “It sounds good on paper, but in practicality, it’s a disaster,” referring to the challenges U.S. companies face under the law, from heavy scrutiny to potential indictments for engaging in overseas businesses.
The FCPA, established in 1977 following revelations of widespread bribery by U.S. multinationals, aims to promote ethical business practices abroad. The law not only covers direct payments but also prohibits indirect bribes made through intermediaries. Over the years, enhanced enforcement by the U.S. Department of Justice and the Securities and Exchange Commission has led to significant outcomes, including substantial financial penalties and the imprisonment of individuals involved in corrupt practices.
Notably, enforcement activities have accelerated since the early 2000s, highlighted by several high-profile cases: in 2016, two Brazilian companies paid $3.5 billion in fines after admitting to bribery in international contracts; in 2020, Airbus SE settled nearly $4 billion in penalties across multiple countries for similar charges; and as recently as January 2024, German conglomerate SAP SE agreed to a $220 million settlement over bribery allegations in South Africa and Indonesia.
The FCPA’s extensive reach and its role as a model for the 1997 Organization for Economic Cooperation and Development’s Anti-Bribery Convention illustrate its global influence. Despite this, Trump’s recent move aligns with his long-standing criticism dating back to 2012, when he decried the act as a hindrance to American commercial interests abroad.
According to the White House, the executive order is part of a broader agenda to “advance American economic and national security by eliminating excessive barriers to American commerce abroad.” The order described the FCPA’s application as “stretched beyond proper bounds” and detrimental to U.S. interests, triggering a six-month suspension of its enforcement, which may be extended by another six months at the discretion of Attorney General Pam Bondi.
While Bondi has been directed to prioritize cases involving criminal organizations and cartels, the broader freeze on FCPA enforcement cases has stirred a vehement response from transparency advocates. Organizations like Transparency International have expressed concerns that pausing FCPA enforcement could erode global anti-corruption efforts and embolden corrupt business practices.
Despite the executive order’s barring of new investigations, legal experts from Arnold & Porter law firm caution that bribery remains illegal and that U.S. state and federal laws, along with international statutes, continue to prohibit such practices. Thus, companies are advised to maintain compliance programs despite the temporary enforcement freeze.
This shift in policy represents a pivotal moment in both the fight against international corruption and the Trump administration’s foreign and economic strategy, setting the stage for potentially significant impacts on global markets and international relations.
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