In 2017, when President Trump first took office, big changes were expected in FCPA enforcement. Much of this reflected President Trump’s expressed misgivings on the substance of the FCPA. He was not a big fan of the law and made his opinion known.
The Trump Administration, however, did not dismantle FCPA enforcement and in fact, DOJ and the SEC increased FCPA enforcement. DOJ and the SEC continued to earn significant revenues for the United States Treasury.
With the return of the Trump Administration, and even with its planned focus on immigration, trade and sanctions, and deregulation initiatives, FCPA enforcement is likely to continue steadily with only minor tweaks to enforcement policies. FCPA enforcement has become “institutionalized,” meaning that U.S. FCPA enforcement resources are now part of a global framework that includes law enforcement and prosecutor networks that stretch internationally. These relationships are important to international law enforcement operations that address a number of global risks, including terrorism, cybersecurity, data privacy, fraud, sanctions, and a number of important substantive areas for sharing of intelligence, financial data and other critical global detection and enforcement processes. At the same time, the global battle against corruption has become normalized as a proper means to stabilize foreign governments, prevent the growth of terrorist elements and build positive trading relationships.
Further, global companies have accepted the importance of fighting corruption. Companies seek to avoid corruption as a means of ensuring a fair competitive landscape. Companies know that corruption distorts and prevents fair competition. Tears ago, companies sought to derail aggressive FCPA enforcement under the mistaken belief that they were being unfairly targeted. Instead, what U.S. companies discovered was that FCPA enforcement often involved prosecution of foreign companies that relied on corrupt techniques to prevent US companies from winning valuable contracts from foreign governments.
U.S. companies have implemented robust anti-corruption compliance policies and procedures. They are used to the issues, understand how to ensure compliance and continue to compete in global markets.
DOJ Tinkering
That is not to say that everything will continue as is — instead, the new Department of Justice leadership is likely to make certain changes to focus enforcement and continue to resolve cases and increase individual accountability.
To this end, DOJ will continue to reward voluntary disclosures and cooperation. Companies may earn non-prosecution agreements, deferred prosecution agreements, and avoid the imposition of any corporate monitors.
Eventually, however, DOJ is moving towards increasing even more the benefits from voluntary disclosure and cooperation. The final step will be a free pass– immunity for any company that voluntarily discloses and cooperates in an FCPA investigation. DOJ has been unwilling to waive disgorgement penalties requiring companies to disgorge any ill-gotten profits. This requirement, while logical and intellectually honest, may be questioned later as a means to increase corporate incentives to report and cooperate in FCPA cases.
DOJ’s focus on individual prosecutions will continue without any significant changes. DOJ’s clawback program will remain untouched — no one can quarrel with punishing wrongdoers by withholding financial benefits.
However, DOJ’s related ethics and compliance program guidance may be adjusted. The Evaluation of Corporate Compliance Programs (ECCP) has grown over the years, with additions on new technology, data and artificial intelligence, along with preservation of messaging records. Under a new Trump Administration focus on reducing corporate regulatory burdens, DOJ may look to simplify some of the ECCP and scale it back to a more generalized set of principles rather than a laundry list of ethics and compliance program requirements. As it stands today, few corporate compliance programs can honestly claim they have satisfied all of the ECCP “standards” or “requirements.”
