New guidelines governing Foreign Corrupt Practices Act (FCPA) investigations and enforcement effectively signal the official end of the proclaimed FCPA enforcement pause announced by President Trump earlier in the year, while marking the start of many new priority areas of FCPA enforcement.
The guidelines, issued June 9 by Deputy Attorney General (DAG) Todd Blanche, follow the direction of the Trump administration’s laser sharp focus on the “total elimination” of cartels and Transnational Criminal Organizations (TCOs) and build upon the priorities spelled out in Attorney General Pamela Bondi’s memorandum issued in February. That memo, in part, directed FCPA Unit prosecutors in the DOJ’s Criminal Division to prioritize investigations relating to foreign bribery connected to the criminal operations of cartels and TCOs and to shift focus away from cases that don’t have such a connection.
Separately, Executive Order 14209 directed the DOJ to cease initiation of any new FCPA investigations or enforcement actions, unless specifically authorized by the AG; and to conduct a 180-day review of all guidelines and policies governing the FCPA and issue updated guidelines, as appropriate.
“We are shifting prosecutorial resources toward cases that clearly implicate U.S. national security and economic competitiveness, rather than penalizing legitimate business operations abroad,” DAG Blanche said in a prepared statement. Following a “comprehensive review” of ongoing and prior FCPA cases, the DOJ has closed “approximately half of the open investigations initiated under the previous administration,” he added.
In a recent FCPA webinar hosted by the C5 Group, a panel of former senior DOJ officials unpacked the new guidelines, and what they mean for the legal and compliance community.
Non-exhaustive factors
The new Criminal Division guidelines formally put into writing the following list of “non-exhaustive” factors prosecutors will consider when evaluating whether to pursue an FCPA investigation or enforcement action under the current administration:
- Total elimination of cartels and TCOs: Consistent with the Bondi Memo, the guidelines reiterate that a “primary consideration” in deciding whether to pursue an FCPA investigation or enforcement action is whether the alleged misconduct “is associated with the criminal operations of a cartel or TCO; utilizes money launderers or shell companies that engage in money laundering for cartels or TCOs; or is linked to employees of state-owned entities or other foreign officials who have received bribes from cartels or TCOs.”
- Safeguarding fair opportunities for U.S. companies: The sentiment of this factor is that FCPA enforcement should ensure U.S. companies can fairly compete on the global economic stage. The guidelines advise prosecutors to consider whether the alleged misconduct deprived U.S. companies of “fair access to compete and/or resulted in economic injury” to law-abiding U.S. companies or individuals.
- Advancing U.S. national security: This factor draws attention to sectors in which corruption by competitors poses the “most urgent threats” to U.S. national security, including “critical minerals, deep-water ports, or other key infrastructure or assets.”
- Prioritizing investigations of serious misconduct: The guidelines stress that FCPA enforcement should not punish U.S. companies for “routine” business practices, but rather focus on serious misconduct “tied to particular individuals.” Examples of aggravating factors consistent with serious misconduct cited in the guidance include “substantial bribe payments, proven and sophisticated efforts to conceal bribe payments, fraudulent conduct in furtherance of the bribery scheme, and efforts to obstruct justice.”
Even in cases where alleged serious misconduct has occurred, the guidelines direct prosectors to consider whether foreign law enforcement authorities are “willing and able to investigate and prosecute.” Here, the guidelines suggest that parallel investigations by the DOJ may not be pursued in some FCPA cases.
Lastly, the guidelines state that prosecutors must receive authorization from the Criminal Division’s assistant attorney general or “a more senior Department official” to initiate any new FCPA investigation or enforcement action.
“It’s not unusual for the assistant attorney general to be aware of investigations that are going on in the FCPA Unit,” said Daniel Khan, a partner at Davis Polk and former Chief of the Fraud Section and the FCPA Unit. Incorporating this into the guidelines is likely “an enforcement mechanism to ensure DOJ is sticking to these guidelines,” Khan added.
Practical implications
The overarching theme, consistent with the Trump administration’s priority areas, is that FCPA investigations and enforcement actions must protect US national interests. “It’s clear that this administration has a bit of a different view on what US economic and national security interests are compared to prior administrations,” said Paul Weiss partner Mark Mendelsohn, former deputy chief of the Fraud Section.
While the guidelines reflect a different direction toward FCPA enforcement, they do not represent an end to FCPA enforcement. “Reports of the complete death of the FCPA may have been greatly exaggerated or, perhaps, premature,” said Kimberly Parker, partner and co-leader of the FCPA and Anti-Corruption Practice at WilmerHale.
The practical implications of the guidelines leave a lot open for interpretation, however, as many terms in the guidelines – such as “national security interests” are ambiguous – leaving DOJ prosecutors a lot of wiggle room in deciding which FCPA cases to pursue.
In remarks at the American Conference Institute’s (ACI) “Global Anti-Corruption, Ethics & Compliance” event, held June 3 in New York, Matthew Galeotti, head of the Criminal Division, provided some clarity. “In plain terms, conduct that genuinely impacts the United States or the American people is subject to potential prosecution by U.S. law enforcement,” Galeotti said. “Conduct that does not implicate U.S. interests should be left to our foreign counterparts or appropriate regulators.”
“Business and compliance leaders, and the counsel who advise them, have a critical role to play,” Galeotti continued. “You can do the right thing, report potential crimes, root out misconduct, cooperate with the Department, and help the company remediate. And when you do, significant benefits are available to your clients.”
Speaking on the C5 webinar, Mara Senn, executive global compliance lead at GE Healthcare, noted that the guidelines likely will not affect the internal operations of compliance programs for numerous reasons. “Most companies want to do the right thing. They’re committed to fair competition,” she said. Also, from an ethics and compliance standpoint, companies generally don’t distinguish between small bribes and big bribes, Senn added. A bribe is still a bribe.
Neither do the guidelines change the importance of conducting internal investigations and engaging in remedial measures where misconduct is discovered. It may change the direction of investigations, however. A memorandum issued by Galeotti in May highlighted “priority areas of focus” for the Criminal Division’s Corporate Whistleblower Awards Pilot Program, where those tips lead to forfeiture. Such priority areas include:
- Violations related to cartels or TCOs, including money laundering, narcotics, and Controlled Substances Act violations.
- Federal immigration law violations.
- Violations involving material support of terrorism.
- Corporate sanctions offenses.
- Trade, tariff, and customs fraud; and
- Procurement fraud.
In the days following announcement of the expanded whistleblower awards program, the DOJ began receiving whistleblower tips in many of these new areas. “[W]e received tips related to drug trafficking and corruption, procurement fraud, healthcare fraud, and more,” Galeotti shared.
Other key takeaways
In his remarks at the ACI event, Galeotti highlighted three other areas of importance to legal and compliance professionals. Firstly, companies that “voluntarily self-report, cooperate, and remediate … will receive a declination,” he said.
Any voluntary self-disclosure that is not recommended for a declination will be closely scrutinized. “The circumstances would have to be truly aggravating and sufficient to outweigh the fact that the company voluntarily came forward,” he said.
Galeotti also shared insights about the Criminal Division’s revised policy on corporate monitors. “Monitors are meant to be a temporary bridge and accountability measure to move a company quickly and efficiently to full compliance,” he said. Recently, the Criminal Division terminated monitorships “where circumstances permitted companies to achieve compliance with our agreements on their own, including by self-reporting, compliance certifications, and other requirements,” Galeotti said.
A third area Galeotti highlighted is the important role legal and compliance professionals play in moving cases quickly. “Producing documents swiftly in response to requests, promptly identifying key evidence, quickly making witnesses available, and effectively navigating complex global legal regimes are just part of what we expect cooperating companies to do,” he said.
The major takeaway for the legal and compliance community Galeotti stressed is the value of self-reporting, cooperation, and remediation. In the absence of these measures, the Criminal Division “will move swiftly and aggressively to bring cases against individuals and companies,” he warned. “We will use all our tools and seek strong sentences. We will hold culpable companies and individuals to account for misconduct.”
As global anti-corruption and FCPA leaders digest the DOJ’s updated guidance, now is the time to connect with top compliance, risk, ethics, and legal experts across industries. Gain actionable insights into what’s working, emerging risks, and how others are adapting their programs to align with today’s global enforcement priorities.
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