WHAT:
“Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security.”
Not my words, folks; it’s an Executive Order!
Per February 5 AG Memo, the Administration’s clear, express focus is now on prosecuting “Cartels” and “Transnational Criminal Organizations.” Outside of these parameters, the Executive Order mandates an extendable 180-day (a) pause in initiating new Foreign Corrupt Practices Act (“FCPA”) investigations or enforcement actions and (b) review of existing investigations and enforcement actions to ensure “proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives.”
WHY:
The Executive Order claims “overexpansive and unpredictable” enforcement of “routine business practices in other nations”. While massive bribes are likely not going to be considered “routine business practices,” one clear intent is to eliminate the chilling effect FCPA prosecutions have on conducting business abroad. (By implication, it also appears to (a) reduce the likelihood of a prosecution for lavish business courtesies and gratuities, and (b) ensure that the DOJ weights FCPA enforcement against foreign policy objectives, i.e., political considerations re the countries and people involved.)
ISN’T IT IRONIC (with apologies to A. Morissette):
- President Trump has said that US businesses suffer when non-US businesses are able to freely engage in practices prohibited by the FCPA. But only ONE of the Top Ten Largest US Monetary Sanctions from FCPA enforcement actions involves a US-headquartered business.
- The President claims that this will level the playing field…which, according to 1970s legislative history, was precisely the justification for promulgating the FCPA and then encouraging other nations to do so.
- The Executive Order will be implemented “consistent with applicable law,” which presumably includes the FCPA itself. And the FCPA still prohibits bribery of foreign officials.
WHAT’S CHANGED?
IT’S NOT YET TIME TO STUFF YOUR BLACK BAG WITH UNMARKED BILLS.
- The FCPA is still the law and is not likely to be repealed. Just because President Trump puts the brakes on enforcement today doesn’t mean a new administration wouldn’t prosecute violations committed now…or at some point in the future.
- Bribery is per se illegal almost everywhere. There are a multitude of FCPA-type laws in other countries and some of them are very actively enforced (UK, Brazil, etc.).
- Trump is only asking DOJ to “study” the impact of the law – they may persuade him it is an effective fundraiser for the US Treasury.
