Abdelrahman
On Monday, President Trump announced a temporary suspension of the enforcement of a federal statute designed to combat corruption within multinational corporations. He argued that this law creates an unequal competitive environment for American businesses.
The statute in question, known as the Foreign Corrupt Practices Act (FCPA), prohibits U.S.-based companies from making payments to foreign government officials to obtain business advantages. Although this law was established in 1977, its enforcement has intensified since 2005, with more rigorous crackdowns on bribery, particularly in nations where such practices are prevalent.
President Trump has expressed concerns regarding the implications of the FCPA, especially as it has resulted in significant penalties and charges against major corporations. For instance, in November, U.S. prosecutors leveled accusations against Indian billionaire Gautam Adani, alleging he bribed officials in India; however, his company has described these allegations as unfounded.
Prominent companies that have faced penalties under the FCPA include the multinational engineering firm Siemens and the Swedish telecom giant Ericsson. In 2020, Goldman Sachs agreed to pay over $2.9 billion to resolve accusations that its Malaysian subsidiary had engaged in bribing foreign officials, totaling approximately $1 billion.
According to President Trump’s executive order, the law has been "misused in ways that are detrimental to U.S. interests," and its enforcement has hindered foreign policy goals. This directive prohibits federal agencies from initiating any new investigations related to the FCPA for the next 180 days. The administration plans to reassess ongoing investigations under this statute to clarify its application.
Additionally, the order calls upon the attorney general to develop new guidelines for FCPA enforcement that would bolster American competitiveness and optimize the use of federal law enforcement resources.
Enforcement of the FCPA has increased significantly over the past twenty years as global business operations have expanded. In 2004, only two criminal enforcement actions were taken under the law, while approximately 30 actions occurred last year from both the Justice Department and the Securities and Exchange Commission (SEC).
President Trump has been vocal about his concerns regarding the FCPA, arguing that it places American companies at a competitive disadvantage in international markets. In a 2012 CNBC interview, he stated that "the world is laughing at us" for the stringent enforcement of this law. In 2017, he nominated Jay Clayton, an attorney known for questioning U.S. antibribery laws, to lead the SEC.
Additionally, according to the book A Very Stable Genius by Washington Post journalists Philip Rucker and Carol D. Leonnig, Trump sought to eliminate this law during his first term. The book notes that in a 2017 discussion with then-Secretary of State Rex W. Tillerson, Trump described the FCPA as "so unfair" to American businesses. He even instructed a policy adviser to prepare an executive action for its repeal, but the adviser, Stephen Miller, expressed doubts about the viability of such a move, and it ultimately did not materialize.
