On February 10, 2025, after assuming the presidency of the United States, Donald Trump issued an executive order (hereinafter, the “Executive Order”) temporarily suspending the enforcement of the Foreign Corrupt Practices Act (“FCPA”).
We would like to make an initial comment on the reason expressed by President Trump for suspending the enforcement of the FCPA.
According to the Executive Order, the suspension of enforcement by the authorities is “to Further American Economic and National Security”. However, based on President Trump’s statements during his previous term, when he called the FCPA a “ridiculous and horrible law”, arguing that it made it difficult for U.S. companies to compete outside the U.S., one might believe that the decision has nothing to do with national security but rather with competitiveness.
Competitiveness as a National Security issue
Nevertheless, Section 1 of the Executive Order explains how competitiveness ultimately becomes a matter of national security, stating that “The President's foreign policy authority is inextricably linked with the global economic competitiveness of American companies. American national security depends in substantial part on the United States and its companies gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets.”
Impact on sanctioned entities
There is also a very sensitive statement, in our opinion, regarding those who have been sanctioned or, by virtue of agreement, have had to pay extravagant sums for FCPA violations and as a consequence of FCPA enforcement by U.S. authorities.
We refer to Section 1 of the Executive Order, which states: “But overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security.” Therefore, it is the policy of my Administration to preserve presidential authority “by eliminating excessive barriers to American commerce abroad.”
Questions arising from the Executive Order
The above, said by the President of the United States, as a representative of the U.S., could generate several questions for those who are being investigated, have been sanctioned, or have spent large sums of money in relation to agreements with U.S. authorities.
And these questions are more concerning for non-U.S. companies.
- When the Trump Administration says that what is reprehensible is that this has occurred against U.S. citizens and companies, and says nothing in relation to non-U.S. entities, does it mean that “overexpansive and unpredictable FCPA enforcement by U.S. authorities” is reprehensible only insofar as it is against U.S. companies, but foreign companies do not matter?
- When it says that the authorities sanctioned companies for “routine business practices” in other nations, does that mean that the conduct that the DOJ and the SEC previously considered reprehensible is no longer reprehensible?
- Is it acceptable to actively harm the economic competitiveness of other countries using the FCPA?
- Are the prohibited conducts under the FCPA acceptable as long as the justification is competitiveness and “American commerce abroad”?
All the above, without considering that the same EO states:
"(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person."
The scope of Executive Order
According to Section 2 of the Executive Order, the U.S. Attorney General shall review the guidelines and policies governing investigations and enforcement actions under the FCPA for a period of 180 days, a period which may extend for an additional 180 days as the Attorney General determines appropriate.
Therefore, the main purpose of the Executive Order is to develop new guidelines and policies that should address many of the questions we have been asking ourselves over the past few months.
According to the Executive Order, during the review period, the Attorney General shall: (i) cease initiation of any new FCPA investigations or enforcement actions, unless the Attorney General determines that an individual exception should be made; (ii) review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives; and (iii) issue updated guidelines or policies, as appropriate, to adequately promote the President's Article II authority to conduct foreign affairs and prioritize American interests, American economic competitiveness with respect to other nations, and the efficient use of Federal law enforcement resources.
Note that the Executive Order has neither revoked nor suspended the FCPA, as we have read or heard some say, because only the U.S. Congress has the authority to do so. It is crucial to understand this, as otherwise, the decisions our clients make in relation to the suspension could be disastrous.
También es crucial entender que la FCPA no fue suspendida; más bien, solo la aplicación fue suspendida temporalmente por esta administración, en relación con los términos de prescripción de la FCPA:
- Generally, 5 years for anti-bribery violations;
- Generally, 6 years for violations of accounting and internal controls provisions;
- Longer statute of limitations terms for conspiracy (statute of limitations begins to run on the date of the last overt act);
- There are different possible extensions, such as the 3-year extension if the DOJ is seeking assistance/documents from a foreign government.
With the foregoing in mind, it is clear that the statute of limitations under the FCPA exceeds and may far exceed President Trump's term, so future administrations will be able to resume enforcement.
On the other hand, in some cases, companies under investigation for FCPA violations may enter into tolling agreements with the authorities to allow, for example, more time for investigation and negotiation without the pressure of an imminent statute of limitations deadline. With that in mind, it is possible that the authorities seek such agreements to preserve their ability to bring charges later, which can extend the statute of limitations period.
As previously stated, the suspension is immaterial with respect to violations of the FCPA that occur during the suspension period. This is because, if a company engages in any such violations, it will have breached the FCPA irrespective of whether the authorities choose to pursue enforcement actions.
Another reason why it is important to understand this is because violations of the FCPA are “predicate offenses” for the purposes of Money Laundering. That is to say, those who mistakenly believe that the FCPA has been “suspended”, instead of non-enforced by the authorities, do not understand that they may be exposed to Money Laundering, whose statute of limitations can be up to 10 years for cases involving foreign nationals.
Now then, understanding that what was suspended was the enforcement by the Trump administration of the FCPA, it must be taken into account that acts of corruption can still be prosecutable (and those who commit them can be pursued) under other criminal statutes, such as those prohibiting money laundering, and the Foreign Extortion Prevention Act.
Furthermore, they can be the basis for civil litigation by private parties, such as under RICO (Racketeer Influenced and Corrupt Organizations Act), which can result in liability not only for those who committed the illicit activities but also for the shareholders or managers of the organization used to carry out or facilitate the illicit activities.
What exactly does the Executive Order command?
Several directives were issued under Section 2 of the Executive Order. Firstly, it establishes that for a period of 180 days, ending on August 9, the Attorney General of the United States will review the guidelines and policies governing investigations and enforcement actions under the FCPA. This is the primary mandate.
Furthermore, while this review is taking place, the order instructs the Attorney General to cease the initiation of any new investigations or enforcement actions under the FCPA, unless the Attorney General determines that a particular exception should be made.
We would like to make a brief comment about the “Attorney General” which we have seen translated by some as “Fiscal General”.
The Attorney General is the head of the DOJ. The Attorney General, if you will, is the lawyer for the federal government. The Attorney General represents the United States in legal matters in general. This includes defending the federal government in lawsuits and prosecuting cases involving violations of federal law.
The Attorney General provides advice and opinions to the President and the heads of executive departments of the Government when requested. This includes interpreting laws, issuing legal opinions, and advising on legal matters that affect the federal government.
The Attorney General oversees the enforcement of federal laws, including civil rights laws, antitrust laws, and criminal laws. The Attorney General supervises the U.S. Attorneys and other officials of the DOJ.
The Attorney General has oversight of various federal law enforcement agencies, including the FBI, DEA, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the U.S. Marshals Service.
And we make this warning to understand the role of the Attorney General in each of the respective countries.
For example, in Colombia, the Attorney General is part of the judicial branch and not the executive branch as in the US. Additionally, the Supreme Court of Justice is responsible for appointing the Attorney General of the Nation from a shortlist submitted by the President of the Republic, for a non-renewable term of four years.
For this reason, the Colombian President could not make a decision like this, in which he gives instructions to the person who investigates and prosecutes. This varies in each country, and it is necessary to know this to understand the scope of the regulation.
Some comments regarding the Executive Order and its application in time
We have already stated that it establishes, in the first place, that the initial period is 180 days, ending on August 9.
We also note that in accordance with the Executive Order, the Attorney General, if deemed appropriate, may extend this period for an additional 180 days.
It is important to note that investigations and enforcement actions under the FCPA initiated or continued after the issuance of the new guidelines and policies shall be governed by the new guidelines and must be specifically authorized by the Attorney General. Therefore, the new guidelines are key for both ongoing and future investigations.
After the issuance of the new guidelines and policies, the Attorney General shall determine whether additional actions are warranted, including corrective measures with respect to past inappropriate FCPA investigations and enforcement actions, and shall take such appropriate actions or, if presidential action is required, recommend such actions to the President.
