Donald Trump pauses US foreign bribery law FCPA
President Donald Trump has paused the enforcement of the Foreign Corrupt Practices Act (FCPA), a law that has been in place for 48 years and criminalizes the bribery of foreign officials by U.S. companies to gain or retain business. Trump’s executive order directs Attorney General Pam Bondi to pause FCPA actions until revised enforcement guidelines are issued, with the aim of promoting American competitiveness and efficient use of federal law enforcement resources. The order stipulates that past and existing FCPA actions will be reviewed and future actions must be approved by the attorney general.
Reasons for the Enforcement Suspension
Competitive Disadvantage Trump and the White House argue that the FCPA puts American companies at a disadvantage by preventing them from engaging in practices common among international competitors, thus creating an uneven playing field.
Economic Growth The administration aims to further American economic growth by eliminating excessive barriers to American commerce abroad. They believe that over-enforcement of the FCPA harms American economic competitiveness and national security.
Misuse of Resources The White House stated that “over-expansive and unpredictable FCPA enforcement against American citizens and businesses… not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms but actively harms American economic competitiveness and, therefore, national security”.
Impact of the Pause
Potential Relief for Adani Group The move could potentially bring relief to the Adani Group, which was indicted by the Department of Justice (DoJ) and US Securities & Exchange Commission (SEC) last year. The Adani Group faced allegations of a $265 million bribery case to secure solar power supply contracts in India, leading to a significant drop in the group’s company shares.
Concerns about Corruption Critics, such as Transparency International, argue that Trump’s directive diminishes efforts against global corruption and could lead to a rise in corrupt activity.
Review of Enforcement The executive order suspends new investigations and enforcement measures for 180 days and plans to reassess ongoing investigations to “reestablish appropriate limits” on the statute.
Market Reaction Following the announcement, Adani stocks experienced a rally.
The FCPA, enacted in 1977, makes it unlawful for companies operating within the United States to offer payments to foreign government representatives in exchange for business advantages. Violations can result in substantial fines and prison sentences for individuals involved.
