FCPA Enforcement Back on at DOJ — With a New Look

Just four months into its six-month pause, the Department of Justice announced in early June that it had restarted enforcement of the FCPA, with the Trump Administration making several changes in tone and approach from previous presidential administrations, including Donald Trump’s first term.

Notably, the department says FCPA investigations and prosecutions will focus not merely on cases of bribery or corruption but on conduct it says harms US national interests, whether by depriving American companies of fair competition, threatening national security infrastructure or facilitating the operations of cartels and transnational criminal organizations.

A June 9 memo from Deputy Attorney General Todd Blanche, formerly one of Trump’s personal lawyers, instructs prosecutors to focus on individual misconduct rather than attributing blame to corporate structures, to expedite investigations and to consider the impact on companies and employees throughout the process.

The announced renewal of FCPA enforcement by the Justice Department, one of several corporate criminal enforcement shifts the administration has made in the early days of Trump’s second term, signals a sea change in how the US government will approach the global fight against corruption, said author and FCPA historian Severin Wirz, who said the changes mark a major turning point for the FCPA. 

“There is a lot of ink that is going to be spilled over the next several months trying to read the tea leaves to figure out exactly what the Blanche Memo means for future enforcement, but whatever it means, this much is obvious: We should expect a significant drop-off in FCPA actions over the next four years,” Wirz said. “The days of only a decade or so ago when the DOJ proudly proclaimed the FCPA its Number Two priority behind combating terrorism are long behind us.”

As for how corporate compliance programs could or should change in light of the DOJ’s new approach, most observers and experts recommend staying the course — that is, if companies already have good compliance programs.

“Companies in high-risk sectors should continue doing what they had been doing before the administration put a temporary pause on FCPA enforcement last February, with the caveat that the new announced priorities should be factored in and addressed if they are relevant to particular organizations,” said Daniel R. Alonso of Vedder Price.

In some organizations, an FCPA primer could be warranted, said Jerrob Duffy, a partner at Hogan Lovells and former chief of the DOJ Fraud Section’s litigation unit.

“Based on the recent DOJ pronouncements, compliance officers should remind their stakeholders that the FCPA is alive and well and consider new or refreshed training on the FCPA and related statutes that apply to the business,” Duffy said.

“[Compliance] programs should be built like well-engineered bridges — designed to flex with changing political winds but never collapse. That means modular policies, periodic reassessments and strong institutional memory. If the pendulum swings back in two years (and it might), the companies that held the line won’t be scrambling.”

— Sean O’Connell, Baker Donelson

Don’t overreact to policy changes

As was the case after the pause was announced, the FCPA is still law, Alonso said, and enforcement changes don’t necessarily have to bring changes to companies’ compliance programs.

“In terms of FCPA risk specifically, the best advice I and others have been giving is that this is no time to alter anti-bribery and [anti]-corruption compliance programs that work well,” said Alonso, who pointed out that changes in government enforcement policy don’t overlap perfectly with corporate compliance programs. 

And just as it was during the pause itself, the FCPA remains a criminal statute in the US, and Alonso predicts the DOJ will pursue serious cases of high-level procurement bribery in sensitive industries. 

“I wouldn’t change anything in a well-functioning compliance program, though it remains a best practice to periodically test such a program to confirm that it is working as designed and make changes as necessary,” Alonso said.

Indeed, a well-designed program today looks very much like a well-designed program a year ago, said Sean O’Connell of Baker Donelson.

“Biggest mistake: Thinking ‘reduced enforcement’ means ‘reduced investment,’ O’Connell said. “It doesn’t. It means more focused enforcement. And you better hope the focus isn’t on you. Programs should be built like well-engineered bridges — designed to flex with changing political winds but never collapse. That means modular policies, periodic reassessments and strong institutional memory. If the pendulum swings back in two years (and it might), the companies that held the line won’t be scrambling.”

Still, the new-look FCPA represents a huge shift from application of the law in previous presidential administrations, including under both Democratic and Republican regimes, Wirz said.

“At the center of [past] initiatives has been the presumption that tackling corruption in other parts of the world helps safeguard democracy abroad, which in turn promotes the interests of the United States at home,” he said. “In this way, the most telling thing about the new FCPA guidelines is not what is said but what is omitted. For the first time in decades — indeed, perhaps since the FCPA’s very inception — a major US policy document has conspicuously neglected to mention the promotion of democracy overseas in describing America’s FCPA enforcement aims.”

Recalibrating risk assessments

While compliance officers shouldn’t spend time restructuring a program that works, they also shouldn’t do nothing at all, experts said. Regardless of sector, the changes could mean new risk assessments, Alonso said, but by no means should it be taken as a signal that corruption is OK now.

“The most important thing I would do is ensure that the message has gotten out, from the top of the organization and throughout, that the US is still enforcing the FCPA and that companies and individuals continue to expose themselves to serious risk if they violate it.”

The Trump Administration’s focus on cartels and TCOs, reinforced in the Blanche Memo, means companies may not be looking in the right direction when it comes to risk, O’Connell said.

“The risk map has changed. The most dangerous geography is no longer ‘where corruption is common’ — it’s where your foreign counterpart has leverage over something the US government values,” O’Connell said. “If you’re bidding against a US company abroad, DOJ is watching. If your supplier is linked to a cartel or TCO, DOJ is interested. If your deal touches defense, tech infrastructure or energy logistics, the national security flag is up.”

And what is in the national interest may depend on the beholder.

“Risk assessment must now blend traditional corruption indices with insights into supply chain visibility, geopolitical alignment and (state-owned enterprise) interactions,” O’Connell said. “It’s no longer just about location — it’s about narrative. Can this conduct be framed as harming US interests? If so, it’s a live wire.”

Additionally, Blanche’s memo specifies that all new FCPA investigations must be personally approved by the assistant attorney general, a move that O’Connell warns may further complicate companies’ risk exposure.

“There’s lower volume risk — but higher strategic risk,” O’Connell said. “Fewer cases may be opened, yes. But those that survive the new gatekeeping structure will be more serious, faster-moving and politically salient. You won’t be dealing with an overworked line prosecutor — you’ll be answering to Main Justice. So, if your case hits the DOJ’s national interest radar, expect sharper scrutiny, fewer off-ramps and more public visibility. This is not a softening. It’s a sorting.”

Other recent DOJ updates, including a revised corporate enforcement policy that purports to offer a guaranteed path to declination and suggests a major reduction in corporate monitorships, should factor in, but experts suggest treading lightly for now, since no precedent is yet available on, for example, exactly what the benefit will be of self-reporting.

“As of now, there has been little publicly disclosed about the decision process for declinations and no precedent that can be relied on to assist in the decision process,” Duffy said. “Potential consequences of a federal criminal investigation, even one where a company has voluntarily self-reported, can be severe and unpredictable,” potentially including disgorgement, forfeiture, restitution, collateral litigation and substantial investigation costs.

“Compliance officers would do well to communicate within their organizations and try to instill a culture that understands the intrinsic importance of prevention via compliance, rather than a culture that, inadvisably, might suggest that if enforcement is slowing down it’s OK to be less vigilant.”

— Daniel R. Alonso, Vedder Price 

Risk is global

A likely reduction in the number of FCPA enforcement actions and settlements doesn’t mean the risk to companies is zero. Indeed, as referenced in the Blanche Memo, foreign enforcement bodies are paying attention, too.

“DOJ may deprioritize certain cases, but foreign regulators — especially the [UK’s Serious Fraud Office] — are expanding aggressively,” O’Connell said. “We’re now in a compliance landscape where books-and-records issues that wouldn’t interest DOJ could bring prosecution in the UK under [the Economic Crime and Corporate Transparency Act]. Don’t let the DOJ’s restraint blind you to risk elsewhere. The same facts could be non-material in Washington and career-ending in London. In short: Build a compliance program that’s not just legally defensible — but globally coherent. The world is watching, even when DOJ isn’t.”

FCPA enforcement at the DOJ is back, which is reason enough to have robust compliance programs, but also fully intact are whistleblower incentives at both the DOJ and SEC, said Cadwalader’s Martin Weinstein, Laura Perkins and Gina Castellano in a written Q&A with CCI. 

“The biggest mistake compliance officers could make during this transition is assuming that enforcement is easing in light of the DOJ’s updated priorities and taking their foot off the gas in ensuring their compliance programs are operating effectively,” they wrote.”The revised focus suggests a more selective but no less aggressive enforcement posture.”

Compliance leaders have also been tasked with fighting any internal misconceptions that corruption laws no longer exist in the US, said Alonso, who flagged the dangerous (and incorrect) notion that the FCPA is a thing of the past.

“Compliance officers would do well to communicate within their organizations and try to instill a culture that understands the intrinsic importance of prevention via compliance, rather than a culture that, inadvisably, might suggest that if enforcement is slowing down it’s OK to be less vigilant,” he said. 

While change of any kind is often destabilizing, at least in the short term, corporate compliance officers could take this as an opportunity not to hyper-fixate every little move the DOJ makes, and that may serve them well in the long run, Wirz said.

“The reprieve in aggressive enforcement may give compliance officers some breathing room to think about their programs less in terms of fulfilling a checklist of DOJ expectations and focus instead on what areas of their programs they think require the most attention,” Wirz said. “So long as that’s balanced by the allocation of necessary resources, that’s a good thing for the overall health of corporate compliance.”