Foreign Corrupt Practices Act

U.S. Foreign Corrupt Practices Act (FCPA) enforcement activity may be at a temporary standstill, but that should not mean much for the day-to-day operations of global anti-corruption compliance programs. If the Department of Justice’s shift in enforcement priorities means anything for legal and compliance, it might require shifting supply chain risk management and customer due diligence efforts. This article explains more.

FCPA Enforcement Pause

On Feb. 10, 2025, President Trump issued an executive order directing the attorney general (AG) to review guidelines and policies governing FCPA investigations and enforcement actions for 180 days. The executive order further directed that no new FCPA investigations or enforcement actions should be initiated over this period, “unless the AG determines that an individual exception should be made.”

In a “Fact Sheet,” President Trump claimed that “FCPA over-enforcement” harms U.S. companies, “because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field.”

The executive order directs the AG to “review all existing FCPA investigations or enforcement actions and take appropriate action” and to “issue updated guidelines or policies, as appropriate.” The AG will also determine whether “remedial measures” concerning “inappropriate past FCPA investigations and enforcement actions are warranted.” What that means in practical terms only time will tell.

AG Bondi Memo

President Trump issued the executive order in the same week as the swearing-in of AG Pamela Bondi, who on her first day issued 14 total memoranda that collectively portend a major shift in enforcement priorities under the Trump administration.

Among those of particular relevance to the legal and compliance community is the memo titled “Total Elimination of Cartels and Transnational Criminal Organizations.” To eliminate cartels and Transnational Criminal Organizations (TCOs) – a stated priority of the Trump Administration – requires a “fundamental change in mindset and approach,” AG Bondi’s memo declared.

It further requires harnessing DoJ resources and empowering federal prosecutors “to work urgently with the Department of Homeland Security and other parts of the government,” AG Bondi’s memo continued.

AG Bondi’s memo directs the Criminal Division’s FCPA Unit to prioritize foreign-bribery-related investigations that “facilitate the criminal operations of cartels and TCOs and shift focus away from investigations and cases that do not involve such a connection.” It cited as examples bribery that facilitates human trafficking or smuggling, narcotics trafficking, or firearms trafficking.

AG Bondi has granted U.S. Attorneys’ Offices more freedom to pursue FCPA and Foreign Extortion Prevention Act (FEPA) investigations and prosecutions for “all matters relating to foreign bribery associated with cartels and TCOs.” Where the Justice Manual requires FCPA and FEPA cases to be approved by the Criminal Division and conducted by Fraud Section trial attorneys, those sections have been suspended.

Instead, U.S. Attorneys’ Offices must provide the FCPA Unit with only “24 hours’ advance notice of the intention to seek charges and make available to the Unit upon request any existing memoranda relating to the contemplated charges.” However, they will not be required to provide “new or additional paperwork.”

These changes will be implemented for 90 days, after which time they’ll be “renewed or made permanent,” as the AG and Deputy AG deem appropriate.

Anti-Corruption Measures

To understand what President Trump’s executive order and AG Bondi’s memo mean in practical terms for anti-corruption compliance programs, it’s prudent for in-house counsel and chief compliance officers to separate rhetoric from reality.

A temporary pause or political shift in direction in FCPA investigations and enforcement activity should not impact the day-to-day operations of a global anti-corruption compliance program, which should never focus on foreign bribery risk alone.

If anything, the DoJ’s shift in enforcement priorities could mean that legal and compliance teams may have to shift focus as it relates to ongoing internal corruption investigations and/or supply chain risk management or customer due diligence efforts from a proactive standpoint.

For example, in-house counsel and compliance teams may now want to focus on whether and how foreign bribery and corruption allegations could be linked to human smuggling in the global employment supply chain, or where money laundering activity could be linked to drug trafficking in the supply chain.

More specifically, supply chain risk management efforts may need to be directed toward the high-risk regions that the Trump administration has identified as having specific ties to cartels and TCOs, including Mexico, Latin America, and China.

Human smuggling risk management

In a separate memo, AG Bondi has signaled that the DoJ and Department of Homeland Security will enhance enforcement efforts against groups in Central and South America linked to human smuggling.

Thus, now may be a good time to review government-provided resources that can help mitigate narcotics trafficking, firearms trafficking, and human smuggling risks when compared against the company’s global operations. For example, annual data provided by the Labor Department’s Bureau of International Labor Affairs highlights the regions, industries, and list of goods produced by forced labor. It cites agriculture, manufacturing, and mining as the industries posing the highest risk.

In-house counsel and chief compliance officers may also want to review research conducted by Verité highlighting the correlation between FCPA risks and labor trafficking-related activities. The independent, non-profit, civil society organization provides numerous resources and reports to help educate companies about recruitment-related sourcing practices that pose a high corruption risk.

“Companies subject to the FCPA need to understand that the agents and brokers they hire may be paying bribes to an assortment of players in the foreign labor supply chain, including sub-agents and labor department officials involved in immigration, border control, and law enforcement,” Verité stated.

Financial industry risks

Because money is the main driver behind cartels and TCO activities, the financial services industry is another industry likely to face heightened investigations and enforcement activity under the Trump Administration.

Practically speaking, in-house counsel and chief compliance officers in the financial services industry may want to re-review a previously issued FinCEN advisory highlighting trends in the fentanyl supply chain, and specific red flags to watch for.

Additionally, the Federal Financial Institutions Examination Council (FFIEC) has provided this list of more than 100 red flags that the financial services industry can use to inform customer due diligence activities in spotting potential cartel-related and TCO activities.

In the end, no matter how much upheaval occurs within the DoJ at the start of any new administration, in-house counsel and chief compliance officers must march on. A pause in political FCPA enforcement activity certainly does not mean a pause in anti-corruption compliance. If anything, when a government chooses to stand down, it becomes even more important, not less important, that a global anti-corruption compliance program stands up.

As the FCPA community navigates evolving updates and enforcement priorities from the U.S. Department of Justice, compliance leaders and legal professionals must benchmark strategies, expand their networks, and exchange insights on the latest developments and best practices. Stay ahead of the curve by joining the American Conference Institute’s newest event, designed to tackle the latest U.S. DOJ enforcement updates.