On February 10, US President Donald Trump signed an executive order titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security” that suspended all new investigations and enforcement actions under the Foreign Corrupt Practices Act (FCPA) for 180 days.
Matthew Walker
This act has, since 1977, criminalized US individuals and entities engaging in bribery of officials to obtain or retain business, while also mandating transparent accounting provisions on publicly traded companies to prevent the concealment of such payments. Referred to by a prominent NGO as the “crown jewel in the US’s fight against global corruption”, the executive order offers a contrasting account of the FCPA, describing it as barring citizens and businesses from engaging in “routine business practices in other nations”. This forms part of his broader agenda to prioritize American economic interests, in this case by reducing regulatory constraints on US businesses operating globally.
During the 180-day suspension, US Attorney General Pam Bondi will review existing FCPA investigations and the act itself. Her directive is to issue updated guidelines or policies “to adequately promote the President’s […] authority to conduct foreign affairs and prioritize American interests, American economic competitiveness […], and the efficient use of Federal law enforcement resources.” Indeed, the executive order includes provisions allowing Bondi to extend the review period for an additional 180 days if she deems it appropriate.
Future FCPA investigations and enforcement actions are also to be governed by the guidelines or policies she eventually issues.
Despite some media sources interpreting the executive order as the President “green-lighting bribery” or raising the spectre of a “wild west” of corrupt deal making, our assessment, in the short- to medium-term at least, is that there will be little to no change in corporate practices. However, KYC responsibilities could be affected in the long-term should the FCPA ultimately undergo significant alterations or even repeal.
Near-Term: Why US Corporate Practices Are Unlikely to Change
There are several reasons why our clients should not expect to see any radical changes by US companies during this initial review period.
Firstly, the FCPA is suspended but not repealed, while also featuring a five-year statute of limitations. Indeed, Congressional legislation like the FCPA can only be repealed by another act of Congress; an executive order cannot repeal such a law. While Trump’s Republican Party does have a small majority in both branches that comprise thet legislature — the US House of Representatives and Senate — at the time of writing there are no indications that the Trump administration is pursuing a total repeal.
Moreover, the FCPA’s anti-bribery provisions have a five-year statute of limitations, along with a six year requirement for its Books-and-Records provisions, which “require publicly traded companies to maintain accurate and transparent records that fairly reflect their transactions”. Consequentially, even if Bondi’s updated enforcement guidelines and policy significantly changes how the Department of Justice (DoJ) pursues infractions, that would relate only to Trump’s DoJ.
In other words, violations committed during this period could theoretically be prosecuted by a new administration after the next elections in four years’ time. Guidelines issued by the current Attorney General do not constitute law and can be easily overridden or revoked by the next president.
Secondly, anti-bribery legislation in other countries will still impact companies with international operations. Regardless of the FCPA’s suspension, US companies with international operations must continue to comply with the relevant laws of the foreign jurisdictions in which they operate — where they exist, at least — or they can still face fines and prosecutions. While there is no EU equivalent to the FCPA, it did adopt several related regulations and directives in May 2024, including AMLD 6 and AMLR, which require EU member states to treat bribery as a predicate crime to money laundering, which is then prosecuted in accordance with the Member States’ domestic criminal code.
France, for example, passed its Sapin II Law in December 2016, which was designed to bring France in line with international anti-bribery standards such as those included in the FCPA or the UK Bribery Act 2010. Bribery is also criminalized under the Swiss Criminal Code, covering, since 2016, private commercial bribery in addition to that of public officials.
Finally, the executive order does not mention the Security and Exchange Commission (SEC). Jurisdiction over FCPA violations is divided between the DoJ, responsible for criminal enforcement, and the SEC, responsible for civil enforcement. The latter includes the accounting provisions and civil anti-bribery violations for all publicly traded companies on US stock exchanges and those required to file periodic reports with the SEC. While Trump’s executive order addressed the DoJ, it says nothing about the SEC and, as such, even during this period of suspension and review, remains able, at least statutorily, to pursue civil enforcement of FCPA violations.
Long-Term: How Changes to the FCPA May Impact KYC Duties
Should American companies and interests sense that their enforcement climate has permanently changed, whether through repeal of the FCPA or cross-party consensus around a significantly weakened version, where would we likely see changed business practices emerge? And, importantly, how would such developments impact their know-your-client (KYC) duties vis-à-vis American clientele?
Across the EU, US corporate entities and individuals who operate there or do business with EU entities would still be limited by the relatively strict anti-bribery legislation across the union’s more developed economies. Thus, any changed business practices would more likely be seen in jurisdictions with inconsistent application of laws, lax enforcement, and political interference.
Key examples include India, the UAE, and Saudi Arabia, as well as certain southern and southeastern European nations that are regularly flagged by prominent corruption-focused NGOs as lacking both consistent enforcement in cases of foreign bribery, as well as transparency and accountability in their public sector contracting practices. Under such a scenario, US companies would face fewer restrictions when competing for contracts or establishing business relations and may feel more comfortable resorting to measures previously been out-of-bounds.
At the same time, while such practices would likely pose a legal risk to the American entity in question, the suspicion or allegations of foreign bribery would impact EU-based clients already engaging in or seeking to do business with such entities. At the very least, this would legally necessitate enhanced KYC measures.
In Switzerland, for example, those dealing with entities that faced or were convicted of engaging in foreign bribery would be required to follow enhanced due diligence procedures, including ongoing transaction monitoring and reporting to the Money Laundering Reporting Office Switzerland (MROS) if their client’s assets are suspected to be linked to bribery or corruption. Similarly, in France, articles contained with Sapin II require companies to carry out risk-mapping and integrity assessments of third parties, with companies failing to conduct proper due diligence when engaging with high-risk entities facing the possibility of being held liable for failing to meet their anti-corruption obligations.
What to Look Out for in the Months Ahead
The 180-day suspension of FCPA enforcement, which could be prolonged by the Attorney General, will be accompanied by a review whose findings will offer the first clear indication as to how far the Trump administration intends to push its deregulation of US companies’ international practices. As discussed, we do not expect even significant changes to FCPA enforcement guidance to immediately impact American corporate practices in the short to medium term.
However, if the current administration begins signaling that full repeal of the act may be pursued during this period in which the Republican Party maintains control of the bicameral legislation and the presidency—which, as of writing, it has not—a lasting shift in US American corporate practices on the global stage could be possible, assuming, of course, that such a repeal would have sufficient votes to pass.