The Erosion of Anti-Corruption Law: What Trump’s FCPA Pause Means for Businesses
In February 2025, a significant shift occurred in the landscape of international business ethics. US President Donald Trump paused enforcement of the Foreign Corrupt Practices Act (FCPA), a law prohibiting the bribery of foreign officials. This pause, framed as a measure to bolster American economic and national security, has effectively halted FCPA enforcement for a six-month review period, with enforcement described as “almost non-existent” since the announcement.
The Risks of a Pay-to-Play Environment
The decision to pause FCPA enforcement raises concerns about a potential slide towards a “pay-to-play” environment. While the administration argues this will benefit US businesses, decades of evidence suggest the opposite. Corruption demonstrably increases capital costs, hinders economic growth, and distorts market incentives.
Strategic Decay: The Long-Term Consequences
The long-term effects of unchecked corruption are particularly damaging. It can lead to “strategic decay,” where systemic corruption undermines a nation’s ability to compete and thrive. Businesses operating in such environments face increased risks, not just legal, but also reputational and operational.
The DOJ’s Shifting Focus: Individual Accountability
Even as FCPA enforcement has slowed, there’s a parallel trend of increased scrutiny on individual accountability. Recent legal developments, such as the guilty verdict in U.S. V. Hobson, signal a Department of Justice (DOJ) intent on pursuing individuals involved in corrupt practices, regardless of corporate enforcement actions. This means individuals within companies could face prosecution even if the company itself avoids penalties.
Navigating the New Landscape: Compliance Challenges
For businesses, this creates a complex and challenging environment. The pause in FCPA enforcement may create pressure to engage in questionable practices, but the risk of individual prosecution remains high. Robust compliance programs are more critical than ever.
Pro Tip: Review and update your company’s FCPA compliance program to ensure it addresses the risks associated with operating in a potentially less regulated environment. Focus on due diligence, training, and internal controls.
What the Future Holds: Predictions for 2026
Experts predict continued uncertainty regarding FCPA enforcement in 2026. The outcome of the six-month review initiated by President Trump will be pivotal. However, even if enforcement resumes at previous levels, the emphasis on individual accountability is likely to persist.
Did you know?
The FCPA applies not only to US companies but also to any individual or entity that takes actions within the US to further a corrupt scheme.
FAQ: FCPA Enforcement and Your Business
Q: What is the Foreign Corrupt Practices Act (FCPA)?
A: The FCPA prohibits US companies and individuals from bribing foreign officials to obtain or retain business.
Q: What does the recent pause in FCPA enforcement mean?
A: It means that, for a limited time, the US government is not actively pursuing FCPA violations, pending a review of the law.
Q: Is individual accountability still a concern?
A: Yes. The DOJ is increasingly focused on prosecuting individuals involved in corrupt practices, even if their companies are not penalized.
Q: What should my company do to prepare?
A: Review and strengthen your FCPA compliance program, focusing on due diligence, training, and internal controls.
Q: Where can I discover more information about FCPA compliance?
A: Resources are available from organizations like WilmerHale (https://www.wilmerhale.com/en/insights/client-alerts/20260128-fcpa-year-in-review-2025-developments-and-predictions-for-2026) and Hogan Lovells (https://www.hoganlovells.com/en/publications/the-doj-doubles-down-on-individual-accountability-what-the-guilty-verdict-in-us-v-hobson-means-for-the-future-of-fcpa-enforcement).
Reader Question: “How can we ensure our third-party vendors are also compliant with the FCPA?”
Conduct thorough due diligence on all third-party vendors, including background checks and risk assessments. Include FCPA compliance provisions in your contracts and provide training to vendors on their obligations.
Explore further: Read more about the weaponization of anti-corruption law on Foreign Affairs.
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