Pause for the prosecution of FCPA violations

On February 10, 2025, U.S. President Trump signed an Executive Order "Pausing foreign corrupt practices act enforcement to further American economic and national security", which is expected to have a significant impact on the prosecution of corruption offenses.

The U.S. Foreign Corrupt Practices Act (FCPA) contains both criminal and civil provisions to combat bribery of foreign public officials, including provisions to ensure proper accounting and financial reporting, and was the model for a large number of national and international anti-corruption regulations.

The reason for the suspension is that, in President Trump's view, the enforcement of the FCPA has become increasingly overexpansive, unpredictable and abusive, impeding the achievement of foreign policy objectives and compromising national security. These consist of the United States and its companies gaining strategic business advantages, among others in critical minerals, deep-water ports or other important infrastructure or assets.

The Executive Order suspends FCPA investigations and enforcement actions for an initial period of 180 days. During this period, the Attorney General is to review the guidelines and policies for FCPA investigations and enforcement. This means that during this period,

• (for the time being) no new investigations or enforcement actions will be initiated unless the Attorney General expressly orders them,
• all pending investigations or enforcement actions are reviewed and, if necessary, appropriate measures are taken to “restore proper bounds on FCPA enforcement”; and
• updated guidelines and policies are issued that prioritize American interests and America's economic competitiveness against other nations.

The Attorney General may extend this suspension for a further period of 180 days.

What the long-term consequences of this Executive Order will be and whether a fundamental revision of the fight against corruption can be expected cannot yet be foreseen. Regardless of the suspension of prosecution, the FCPA remains valid and in force as a federal law as long as it is not repealed by Congress. The guidelines for the application of the FCPA also remain valid for the time being. It remains to be seen whether the prosecution of FCPA violations will be resumed in whole or in part at the end of this suspension period. However, it can be assumed that geopolitical or economic policy considerations will have a greater influence on the decision as to whether investigations into FCPA violations will take place and how any violations of the law will be punished.

The suspension currently only affects criminal prosecution by the Department of Justice. The U.S. Securities and Exchange Commission, which is responsible for civil enforcement of the FCPA, has not yet announced how it will respond to the Executive Order.

Even if the pressure of prosecution by the U.S. authorities will (temporarily) ease, foreign companies are well advised to continue to ensure a high level of anti-corruption compliance and to prevent behavior that violates the provisions of the FCPA. On the one hand, violations of the provisions of the FCPA are also largely punishable by criminal penalties or regulatory fines under German law, meaning that prosecution in Germany remains possible in most cases, even in the case of acts of corruption abroad. On the other hand, the objective of the Executive Order suggests that FCPA investigations and their prosecution could be used far more often than before as a means of protecting American industry in the future and that foreign companies will therefore increasingly become the focus of prosecution.

The Executive Order and its objectives do not come as a complete surprise but are in clear contrast to international efforts to intensify the fight against bribery. It remains to be seen whether and what impact the review of the FCPA will have on planned European legal acts, in particular the proposed Directive on the fight against corruption, which is currently in discussion.