U.S. pausing of foreign bribery enforcement will harm economies and governance worldwide
Yesterday, President Trump issued an executive order directing Attorney General Pam Bondi to pause all enforcement of the Foreign Corrupt Practices Act (FCPA) until she issues new guidelines.
Clipping the wings of the Department of Justice's (DOJ) enforcement of the FCPA delivers a major blow to the fight against foreign bribery worldwide. It risks undermining decades of progress in tackling cross-border corruption and puts international stability at risk. This pause will work to the advantage of unscrupulous business actors around the world who until now feared U.S. criminal pursuits.
The FCPA was passed in 1977 to address widespread foreign bribery by multinationals that were discovered in the wake of the Watergate scandal. It was the first law of its kind in the world, and prohibits U.S. companies, individuals, and foreign entities with a U.S. connection from bribing foreign public officials.
The FCPA was internationalised in 1997 with the adoption of the OECD Anti-Bribery Convention which now has 46 parties. By halting enforcement, the U.S. administration is jeopardising the country’s commitments under the Convention, as well as under the UN Convention against Corruption.
The U.S. has long been respected as a global leader in foreign bribery enforcement. For close to two decades, enforcement by the DOJ has established a deterrent for domestic and foreign companies alike, resulting in billions of dollars in fines. Putting the brakes on its enforcement efforts will reverse years of progress in promoting fair competition among the private sector in their relations with public institutions globally.
The FCPA plays a critical role in holding companies to account, ensuring that they face consequences for their corrupt acts and a sense of justice for victims. In a recent FCPA case, a multinational mining company was found to have paid bribes to officials in countries such as the Democratic Republic of Congo and Nigeria to secure lucrative business deals. As the company was U.S.-listed, authorities were able to take action for violating the FCPA. The case underscored the profound human cost of corruption, as the company's actions not only undermined fair competition but also led to environmental harm and exploitation of local workers in some of the world’s poorest regions.
In the absence of U.S. leadership, other major exporting countries party to the OECD Anti-Bribery Convention must step up to the plate and increase their enforcement.
François Valérian, Chair of Transparency International, said:
“U.S. enforcement of the FCPA has long been a gold standard in the fight against corruption. Weakening it will empower wrongdoers and send a dangerous signal that bribery is back on the table. Foreign bribery is by no means, as suggested by last night’s decision, a routine business practice. This is a betrayal of U.S. leadership in global anti-corruption efforts and a gift to those who profit from bribery and illicit financial flows. This dangerous course needs to be immediately reversed.”
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