The FCPA is Back Online

As discussed in President Puts FCPA Enforcement on Hold, February 2025 Update, on February 10, President Trump issued an Executive Order directing Attorney General Bondi to pause enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days and to draft new FCPA enforcement guidelines. On June 9, the Department of Justice issued Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (FCPA) (Guidelines), outlining the policies that will govern current and future FCPA investigations and enforcement actions.  

The purpose of the Guidelines is to limit “undue burdens on American companies that operate abroad” and to target “conduct that directly undermines U.S. national interests.”  Prosecutors are instructed to “focus on cases in which individuals have engaged in criminal misconduct and not attribute nonspecific malfeasance to corporate structures” and to “consider collateral consequences, such as the potential disruption to lawful business and the impact on a company's employees, throughout an investigation, not only at the resolution phase.”

In evaluating whether to pursue an FCPA matter, prosecutors must consider four factors:

• Total Elimination of Cartels and Transnational Criminal Organizations (TCOs). The Guidelines state that the “benefits of eliminating Cartels and TCOs will redound to American enterprise and the Nation as a whole.”  In deciding whether to pursue an FCPA  investigation or enforcement action, a primary consideration will be “whether the alleged misconduct (1) is associated with the criminal operations of a Cartel or TCO; (2) utilizes money launderers or shell companies that engage in money laundering for Cartels or TCOs; or (3) is linked to employees of state-owned entities or other foreign officials who have received bribes from Cartels or TCOs.”

• Safeguarding Fair Opportunities for U.S. Companies. The Guidelines state that companies that bribe foreign officials to obtain business disadvantage law-abiding U.S. companies. Therefore, a key factor prosecutors will consider is “whether the alleged misconduct deprived specific and identifiable U.S. entities of fair access to compete and/or resulted in economic injury to specific and identifiable American companies or individuals.”

• Advancing U.S. National Security. President Trump’s February 10 Executive Order stated that "American national security depends in substantial part on the United States and its companies gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets."  Accordingly, FCPA enforcement will focus on threats to U.S. national security resulting from the bribery of foreign officials involving key infrastructure or assets.

• Prioritizing Investigations of Serious Misconduct.  FCPA investigations and enforcement actions will also focus on alleged misconduct that “bears strong indicia of corrupt intent tied to particular individuals, such as substantial bribe payments, proven and sophisticated efforts to conceal bribe payments, fraudulent conduct in furtherance of the bribery scheme, and efforts to obstruct justice.”  In contrast, the enforcement will not address “routine business practices or the type of corporate conduct that involves de minimis or low-dollar, generally accepted business courtesies.” Prosecutors will also consider whether a foreign law enforcement authority is willing and able to investigate and prosecute alleged misconduct.

Like the February 10 Executive Order, the Guidelines deal with criminal enforcement of the FCPA by the Department of Justice and do not mention the SEC’s authority to bring civil actions under the Act against public companies for bribery of foreign officials.  However, the SEC will likely apply these guidelines to its FCPA anti-bribery enforcement efforts. In addition to outlawing bribery of foreign officials, the FCPA requires public companies to keep accurate books and records and to maintain internal accounting controls.  The Guidelines do not refer to the accounting provisions.

For public companies and their audit committees, the Guidelines should not be taken as a signal to change their practices with respect to FCPA compliance.  The Guidelines are broadly worded and non-exhaustive.  Depending on how they are interpreted, they afford the Department latitude to bring a wide range of FCPA cases.  Even if the Department does not elect to pursue a particular matter under the FCPA, improper payments to foreign officials may violate other laws to which a company is subject, including the laws of the country in which the payment is made.  Payments made to obtain or retain material amounts of business may also raise difficult disclosure issues.