Trump Suspends Enforcement of Foreign Bribery Law
Executive Order Cites Global Competitiveness Concerns
Washington, D.C. – President Donald Trump signed an executive order on Monday evening, suspending the enforcement of the Foreign Corrupt Practices Act (FCPA) for American businesses. The law prohibits U.S. companies from bribing foreign officials.
Trump stated that the law puts U.S. businesses at a disadvantage on the global stage, arguing that it makes American companies less competitive. He believes that the FCPA has led to excessive investigations and indictments, discouraging American companies from doing business overseas.
Revised Enforcement Guidelines to Follow
The new executive order directs newly confirmed Attorney General Pam Bondi to immediately cease actions taken under the FCPA, including prosecutions of American individuals and companies. Bondi will also draw up revised, reasonable enforcement guidelines for the act.
Review of Past and Future Cases
All current and past FCPA cases will be reviewed. Once the new guidelines are issued, all future investigations and enforcement actions will be governed by the new guidance and must be approved by the Attorney General.
Arguments for Changes
The White House fact sheet accompanying the executive order states that the FCPA has been over-enforced, draining resources from American businesses and law enforcement. It argues that excessive enforcement has made it difficult for U.S. companies to compete internationally, as they are prohibited from engaging in practices that are common among international competitors.
The executive order also notes that the FCPA’s interpretation and enforcement have expanded over time, imposing a growing cost on the U.S. economy.
Criticisms of the Executive Order
Gary Kalman, executive director of Transparency International U.S., expressed concern about the executive order, stating that it diminishes the fight against global corruption. He highlighted that the FCPA has not only enabled prosecutions of individuals and companies involved in bribery, but also forced firms to establish strict accounting requirements and controls to prevent such crimes. This, in turn, has strengthened American companies and the "Made in America" brand.
Ripple Effects in Legal Circles
The executive order will have significant implications within international legal circles, the Justice Department, and the FBI, which often investigate and prosecute FCPA cases. Trump’s former deputy Attorney General, Rod Rosenstein, believes that the order significantly strengthens the position of companies with ongoing FCPA investigations.
Department of Justice Directive
In line with the executive order, Attorney General Bondi issued a directive de-emphasizing FCPA investigations and prosecutions of U.S. companies. This directive is expected to shift the focus of FCPA prosecutions away from traditional corporate subjects and towards cases involving cartels and transnational criminal organizations.
Controversial Case Prior to Executive Order
Just three weeks before his election victory in 2016, the Justice Department announced a major victory in a FCPA case against Raytheon Company, a mega-defense contractor. Raytheon agreed to pay over $950 million to settle foreign bribery charges related to the sale of missile systems and radar equipment.
Conclusion
The executive order suspending FCPA enforcement has sparked concerns about the potential consequences for global anti-corruption efforts. The revised enforcement guidelines and review of past and future cases are likely to have a significant impact on the Justice Department’s approach to FCPA investigations and prosecutions.
