On February 10, 2025, President Trump signed Executive Order 14209 requiring the Attorney General to pause any “new” Foreign Corrupt Practices Act (FCPA) investigations and prosecutions, over the next 180 days, unless the Attorney General determines that an individual exception should be made. The Executive Order also directs the Attorney General to review all existing FCPA investigations and prosecutions and take “appropriate action” to “restore proper bounds on FCPA enforcement.” The Attorney General also must issue revised FCPA guidelines and policies, including direction that all newly initiated or continuing FCPA investigations or prosecutions “must be specifically authorized by the Attorney General.” Once the guidance is issued, the Attorney General is to further determine whether “remedial measures with respect to inappropriate past FCPA investigations and enforcement actions” are warranted.

The Executive Order follows years of commentary concerning the outsized discretion and power of the U.S. Justice Department in enforcement of a law containing numerous uncertainties, as well as FCPA enforcement’s business impact on the private sector and international commerce. Several courts and commentators also have weighed in on the difficult international jurisdictional issues presented by the FCPA. The Executive Order provides an opportunity to consider and review these issues, and the ways that the FCPA can best be used to the benefit of American foreign policy and national security.

The Executive Order further follows a February 5, 2025 policy announcement by Attorney General Bondi, decentralizing FCPA enforcement and directing that the Criminal Division’s Foreign Corrupt Practices Act Unit “shall prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and [transnational criminal organizations], and shift focus away from investigations and cases that do not involve such a connection.” These types of re-prioritizations of finite resources across the U.S. Justice Department are fairly routine and take place under each Presidential Administration.

Given the central role in the development of the FCPA played by Stanley Sporkin, a founding partner of the law firm of Freeh Sporkin & Sullivan, LLP (FSS), we are qualified and well positioned to provide expert guidance to our Clients and others concerning these important developments directed by Executive Order 14209. In particular, FSS notes the central role that FCPA enforcement has played over the past two decades in revolutionizing the importance of corporate compliance and governance to a well-functioning company. We expect that responsible and sensible companies will continue undertaking these important corporate governance efforts, which have done so much to reduce their overall liability and risk, allowed them to scale internationally and strengthened international business markets.

While shifts in policies, priorities and resources are a routine and foreseeable part of Presidential Administration changes, the FCPA itself remains effective and unchanged U.S. Federal Law, as do anti-bribery laws in other countries. FSS believes that Companies should:

• continue efforts to abide by all applicable anti-corruption legislation,
• maintain on-going compliance efforts; and
• maintain accurate books and records and appropriate internal controls.

Companies should remain committed to well-designed compliance programs that set company policy and expectations for conduct by all officers, employees, and agents, as such programs are required by U.S. federal law, regardless of temporary pauses in enforcement actions, as well as other country’s laws. These compliance programs and governance practices are an important part of building an organizational culture that encourages ethical conduct and a commitment to compliance with the law. A robust compliance culture provides a foundation that supports ethical business practices and decision making. Such a culture cannot easily be re-established once abandoned. The lack of this compliance culture breeds malfeasance and incentivizes the wrong types of employee behavior, which can create additional criminal and civil liability for the company, its executives and fiduciary board of directors.

Continued attention to anti-corruption compliance is particularly important given the relevance of risk-based compliance to satisfying the duties of loyalty and care under Delaware corporate governance law, as well as the reality that anti-corruption enforcement can come from several foreign regulators, which enforce their own anti-corruption laws, as well as the possibilities that U.S. authorities can attack misconduct through a host of other laws besides the FCPA (such as anti-money laundering or laws prohibiting the use interstate or foreign travel for the purpose of engaging in specified criminal acts). Past enforcement actions make clear that bribery often is not an isolated crime, and frequently is accompanied by money laundering, fraud, tax or other criminal offenses.

Moreover, compliance efforts will continue to be closely scrutinized by the U.S. Securities & Exchange Commission, banks, external auditors, customers, and other business partners. Additionally, the five-year period of limitations for FCPA actions extends to a period when future administrations may take a different approach on FCPA enforcement priorities.

When the guidance directed by the Executive Order is issued, companies can study the guidance and determine if any adjustments may be appropriate to risk assessments and elements of their ongoing compliance work. The U.S. Justice Department’s own guidance expects such periodic adjustments shall occur based upon how a company’s business changes over time, including the environments in which it operates and the laws that govern its actions.

As our founding partner Stanley Sporkin observed over 20 years ago, the FPCA offers a basis “to provide a climate which enables our corporations to compete honestly and fairly throughout the world.” Sporkin himself made suggestions over the years for ways that the FCPA could be improved so that responsible companies could develop vibrant overseas business without having to defend themselves against costly and time-consuming investigations. Time will tell if Executive Order 14209 will provide just such an opportunity.

Article derived from our affiliate company, Freeh, Sporkin & Sullivan LLP