ASK MAT – Following US President Trump’s suspension of the FCPA, what you see as the immediate consequences

Thank you for the following ASK MAT question–

• MAT, following US President Trump’s suspension of the FCPA, what you see as the immediate consequences

MAT SAYS:-

1. On February 10, 2025, President Donald Trump signed an Executive Order (EO)
   1. https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-to-further-american-economic-and-national-security/
2. The EO directs the Attorney General (AG) PAM BONDI:-
   1. To pause enforcement of the Foreign Corrupt Practices Act (FCPA) until new enforcement guidelines and policies addressing FCPA enforcement are published,
   2. To restore American competitiveness and security (FCPA EO).
3. The EO and its related fact sheet follow a series of X14 memoranda outlining new enforcement priorities for the US Department of Justice (DOJ) that AG Bondi issued to the Department on February 5, 2025 -
   1. FACTSHEET = https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-restores-american-competitiveness-and-security-in-fcpa-enforcement/
   2. X14 MEMORANDA =   https://www.justice.gov/ag/select-publications
4. Only one of the 14 memoranda items –
   1. Explicitly touches on the FCPA and may serve as a blueprint for developing the upcoming FCPA enforcement guidelines.
   2. This being the TOTAL ELIMINATION OF CARTELS AND TRANSNATIONAL CRIMINAL ORGANIZATIONS
      • Total Elimination Memo = https://www.justice.gov/ag/media/1388546/dl?inline

5. And finally, it must be pointed out
1. The suspension of the FCPA enforcement does not directly impact the UK Bribery Act.
2. The UK Bribery Act remains in full force and continues to be one of the strictest anti-corruption laws globally

MY KEY TAKEAWAYS ON THE CURRENT SITUATION ARE AS FOLLOWS:-

1. President Trump’s recent executive order to suspend enforcement of the Foreign Corrupt Practices Act (FCPA) has led to several immediate consequences:
   1. Pause on Investigations:
      • All new investigations and enforcement actions under the FCPA have been paused for 180 days. This includes a review of ongoing cases.

1. 2. Shift in DOJ Priorities:
      • The Department of Justice (DOJ) is now prioritising investigations related to CARTELS AND TRANSNATIONAL CRIMINAL ORGANISATIONS over FCPA cases.

1. 3. Corporate Compliance Uncertainty:
      • Companies face uncertainty regarding compliance as the FCPA remains law, but its enforcement is currently on hold.

2. These changes
   1. Aim to give U.S. companies a competitive edge internationally and
   2. Have raised concerns about potential increases in corruption and a negative impact on America’s business reputation.
3. It is expected that legal challenges will follow the suspension of the FCPA enforcement, and Several experts and organisations have already voiced concerns:
   1. Potential Lawsuits:
      • Legal experts anticipate that lawsuits will challenge the executive order, arguing that it undermines the rule of law and encourages corruption.

1. 2. International Reactions:
      • Other countries may respond by weakening their anti-bribery laws, leading to a “race to the bottom” in global anti-corruption standards.

1. 3. Corporate Pushback:
      • Some companies that have invested heavily in compliance programs may oppose the suspension, fearing it could create an uneven playing field and damage their reputations.

4. These challenges could create a complex legal landscape in the coming months.
5. One worry for international business is that suspending FCPA enforcement will likely affect global corruption levels. Here are some potential impacts:
   1. Increase in Corruption:
      • With the FCPA enforcement on hold, companies might feel less pressure to comply with anti-bribery laws, potentially leading to increased corrupt practices.

1. 2. Global Standards:
      • Other countries might follow suit and relax their own anti-corruption laws, decreasing global anti-corruption standards.

1. 3. Business Practices:
      • Companies that have invested in robust compliance programs may face unfair competition from those that engage in bribery.

6. Taking all the above, we must not forget the joined-up world on international trade and other international and domestic laws. for example,
   1. The US TRUMP suspension of the FCPA enforcement does not directly impact the UK Bribery Act.
   2. The UK Bribery Act remains in full force and continues to be one of the strictest anti-corruption laws globally.
7. Concerning international and domestic laws, Here are a few key points:
   1. Continued Enforcement:
      • The UK authorities will enforce the Bribery Act rigorously, regardless of changes in the U.S. enforcement landscape.

1. 2. Global Compliance:
      • Companies operating internationally will still need to comply with the UK Bribery Act and other anti-corruption laws, such as France’s Sapin II.

1. 3. Potential for Increased Scrutiny:
      • With FCPA enforcement on hold, UK regulators might increase scrutiny to ensure that companies do not exploit the gap in U.S. enforcement.

Summary

1. Ultimately, the FCPA EO and Total Elimination Memo signal changes to the FCPA enforcement landscape, but the full extent of these changes is unknown.
2. Once Attorney General Bondi issues further guidance, companies may begin assessing these changes' nature.
3. Until then, companies are encouraged to continue operating under their current global anti-bribery policies and procedures to ensure compliance with the FCPA and other international and domestic laws.
4. Businesses must remain vigilant and maintain robust compliance programs to comply with the UK Bribery Act and other international anti-corruption laws.  

Source:  

1. Trump freezes U.S. law banning bribery of foreign officials. https://www.cbsnews.com/news/trump-fcpa-anti-bribery-law-executive-order/.
2. Trump Pauses FCPA Enforcement: Implications for Corporate Compliance .... https://www.troutman.com/insights/trump-pauses-fcpa-enforcement-implications-for-corporate-compliance-strategies.html.
3. Trump’s FCPA Enforcement ‘Pause’: Considerations and Potential .... https://www.gtlaw.com/en/insights/2025/2/trumps-fcpa-enforcement-pause-considerations-and-potential-implications.
4. Trump freezes U.S. law banning bribery of foreign officials. https://www.cbsnews.com/news/trump-fcpa-anti-bribery-law-executive-order/.
5. President Trump’s Executive Order pauses FCPA enforcement pending .... https://www.dlapiper.com/en/insights/publications/2025/02/trump-executive-order-pauses-fcpa.
6. Business Impacts of Trump’s Executive Order Pausing FCPA Enforcement. https://www.foley.com/insights/publications/2025/02/business-impacts-of-trumps-executive-order-pausing-fcpa-enforcement/.
7. Abandoning FCPA Would Endanger Ethical Shield for US Companies. https://news.bloomberglaw.com/us-law-week/abandoning-fcpa-would-endanger-ethical-shield-for-us-companies.
8. President Trump’s Executive Order pauses FCPA enforcement pending .... https://www.dlapiper.com/en/insights/publications/2025/02/trump-executive-order-pauses-fcpa.