U.S. DOJ Hits the Brakes on FCPA Enforcement and Announces Other Key Policies at the Beginning of Attorney General Bondi’s Tenure

Through a series of presidential executive orders (EOs) and Attorney General (AG) memos, the new Trump administration has signaled dramatic changes in how the Department of Justice (DOJ) will enforce white collar crime and specifically the Foreign Corrupt Practices Act (FCPA). This alert analyzes the significant takeaways for corporations that operate in the United States and across borders.

• First, via an EO earlier this week, President Donald Trump has ordered a pause on all new FCPA investigations for 180 days (six months) while AG Pamela Bondi reviews FCPA policies and guidelines. The rationale behind the pause is to improve American competitiveness abroad, particularly in areas that implicate national security. All existing FCPA investigations and enforcement actions will also be reviewed by the AG, and the AG is empowered to review and take remedial measures with respect to past FCPA enforcement actions. Outside the FCPA, the AG has refocused the Money Laundering and Asset Recovery Section (MLARS) to target cartels and transnational criminal operations (TCOs). At least for now, other key DOJ programs like the Corporate Enforcement and Voluntary Self-Disclosure Policy and Corporate Whistleblower Awards Pilot Program seemingly remain in place.
• Second, DOJ appears to have started to decentralize decision-making from its main headquarters to U.S. Attorney’s Offices (USAOs) across the country. It appears that DOJ’s goal is less bureaucracy and more aggressive prosecutions, at least focused on cartels and TCOs.
• And third, a sector-by-sector investigation of corporate diversity, equity, and inclusion (DEI) programs has started and could lead to criminal and civil enforcement actions as soon as next month, according to the recent DOJ memos.

Pause on FCPA Enforcement and its Potential Implications

On February 10, President Trump issued a fact sheet and an EO that criticize “overexpansive and unpredictable” FCPA enforcement against American companies “for routine business practices in other nations.” With the goals of improving American competitiveness abroad and bolstering national security through strategic business advantages, the EO directs the AG to initiate a 180-day review of the guidelines and policies governing FCPA investigations and enforcement. The AG has the option to extend the review period for an additional 180 days.

During this period, DOJ will cease initiation of any FCPA investigations or enforcement actions unless the AG makes an individual exception. All existing FCPA investigations and enforcement actions will be reviewed in detail by the AG to “restore proper bounds on FCPA enforcement.” And the AG will issue updated guidelines and policies to promote American economic competitiveness. Notably, all FCPA investigations and enforcement actions initiated or continued after the AG’s revised guidelines are issued must be specifically authorized by the AG. In addition, the AG is empowered to review and take remedial measures with respect to “inappropriate past FCPA investigations and enforcement actions.”

This EO comes quickly on the heels of a memo issued by AG Bondi last week that directed DOJ’s FCPA Unit to prioritize cases of foreign bribery that facilitate cartel operations and TCOs. DOJ has also shifted priorities for MLARS, which leads DOJ’s asset forfeiture and anti-money laundering enforcement efforts. In a memo to her staff, AG Bondi has ordered MLARS to prioritize actions that target cartels and TCOs. MLARS has a track record of prosecuting financial institutions and money services businesses for narcotics-related laundering offenses, so some investigations may already be underway on this front.

Alongside money-laundering charges, we expect aggressive use of criminal sanctions prosecutions, terrorism charges, and International Emergency Economic Powers Act (IEEPA) charges against cartels. That means businesses with significant operations in Latin America are likely to face more scrutiny. So too will businesses that are more susceptible to accusations of facilitating human smuggling and the trafficking of narcotics and firearms.

The recent EOs and AG memos do not rescind the Corporate Enforcement and Voluntary Self-Disclosure Policy (which provides corporations with incentives to self-disclose misconduct and which we previously analyzed here) or the Corporate Whistleblower Awards Pilot Program (which provides individuals with the potential for monetary incentives to report corporate misconduct and which we previously analyzed here). Nonetheless, with DOJ’s pause on FCPA enforcement, corporations will need to understand how the cost-benefit calculus for self-disclosure has shifted. Similarly, the perception that FCPA compliance is less important now may lead to greater whistleblower risk (which could still prompt investigations under either the current administration despite DOJ’s change in focus or a future administration given the minimum five-year statute of limitations applicable to FCPA cases).

DOJ’s change in priorities may also affect how other regulators within the U.S. and overseas operate. The EO pausing DOJ’s FCPA enforcement did not address the Securities and Exchange Commission’s (SEC) role in civil enforcement of the FCPA. It is possible that the SEC will continue to bring FCPA cases involving issuers, the absence of internal controls, or accounting issues. Laws criminalizing commercial bribery also remain in effect. Meanwhile, foreign regulators such as the UK’s Serious Fraud Office and France’s Parquet National Financier may become more aggressive in their enforcement activity, particularly against U.S. companies. Time will tell.

While FCPA activity will pause, or at least slow, for now, many attorneys with compliance and white collar backgrounds likely recall that during the first Trump administration, FCPA enforcement reached all-times highs in terms of corporate penalties. And given that the majority of FCPA cases in recent years have been against foreign companies, it is possible that the present administration will continue that focus under the rationale of trying to balance the competitive playing field for American businesses. Interestingly, the EO was also silent on the new and as-yet-uncharged Foreign Extortion Prevention Act, which criminalizes solicitation and receipt of bribes by foreign officials.

U.S. Attorneys May Be in the Driver’s Seat Now

In a memo issued by AG Bondi, the AG called for the removal of “bureaucratic impediments to aggressive prosecutions” and sought to empower individual USAOs to bring prosecutions without running into red tape at DOJ. For example, approval requirements from DOJ headquarters have been suspended for most terrorism and IEEPA charges by USAOs against cartels and TCOs designated as foreign terrorist organizations or specially designated global terrorists. Approval requirements for racketeering charges filed by USAOs against cartels and TCOs have also been suspended.

It remains to be seen just how much latitude USAOs will have, but it is quite possible businesses will be dealing with faster and more nimble prosecutors in USAOs. The decentralized enforcement approach may also change where cases are brought. Larger USAOs are more equipped to investigate the most complex corporate cases and may focus on such cases. Finally, staffing is a critical variable to watch, as resourcing of agents and prosecutors has as much to do with enforcement levels as do the administration’s stated priorities.

DOJ Signaled That Enforcement Actions on DEI May Be Around the Corner

DOJ’s Civil Rights Division has been tasked with investigating, eliminating, and penalizing DEI illegal policies in the private sector. AG Bondi has asked for a report by March 1, 2025, that identifies “the most egregious and discriminatory DEI and DEIA practitioners in each sector of concern” and “proposals for criminal investigations and for up to nine potential civil compliance investigations of entities”. A prior EO issued by President Trump (which forms the springboard for AG Bondi’s memo) had identified the following entities for investigation: “publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, state and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.” Expect DOJ’s DEI sweep to cover these entities, possibly trying to use the conspiracy against rights statute — 18 U.S.C. 241 — as a basis for investigation, although it is unclear what civil or criminal matters DOJ may bring. Further, certain state AGs have signaled a desire to probe corporate DEI efforts.

This Is Just the Start

The President’s EOs and the AG initial memos have signaled dramatic changes in the way DOJ will tackle white collar crime. But how these policies will turn into actions remains unclear. Given the uncertainty, it is critical for corporations to stay attuned to how these policies are being implemented in practice and, when necessary, consult with knowledgeable outside counsel about any key decisions potentially affected by DOJ’s change in focus.