DOJ Narrows FCPA Enforcement Focus

The U.S. Department of Justice has recently narrowed its approach to enforcing the Foreign Corrupt Practices Act, also referred to as the FCPA. Through a new directive issued by Attorney General Pam Bondi, the DOJ is shifting its focus to prioritize foreign bribery cases tied to cartels and transnational criminal organizations. This marks a significant development in FCPA enforcement and has stirred up conversations in legal, compliance, and executive circles.

Read the full article
DOJ Narrows FCPA Enforcement Focus

About the author
Audrey N. Karman

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.

With a focus on innovation, collaboration and client service. We are committed to delivering exceptional value to our clients and to the communities we serve. And now our latest episode.

The U.S. Department of Justice has recently narrowed its approach to enforcing the Foreign Corrupt Practices Act, also referred to as the FCPA. Through a new directive issued by Attorney General Pam Bondi, the DOJ is shifting its focus to prioritize foreign bribery cases tied to cartels and transnational criminal organizations. This marks a significant development in FCPA enforcement and has stirred up conversations in legal, compliance, and executive circles.

Attorney General Bondi has issued fourteen memos outlining the DOJ's updated priorities, with one directive explicitly targeting FCPA enforcement. Titled "Total Elimination of Cartels and Transnational Criminal Organizations," the directive introduces significant changes aimed at combating organized crime.  

The DOJ’s Criminal Division has announced key updates to its approach to FCPA enforcement. Going forward, the Division will prioritize cases where bribery is used to facilitate the illegal operations of cartels and transnational criminal organizations, while deprioritizing cases that lack such connections. Additionally, U.S. Attorney Offices now have expanded authority to pursue criminal FCPA cases involving cartels and transnational criminal organizations without needing prior approval from the Criminal Division. They are, however, required to notify the Division within 24 hours of initiating proceedings.

This realignment suggests a notable pivot away from traditional corporate corruption cases, marking a new era for FCPA enforcement strategy.  

Under the Trump administration, there has been uncertainty about the DOJ's FCPA enforcement efforts. Broader reforms within the DOJ and the Executive Branch, coupled with efforts to shrink the size of the federal workforce, have fueled speculation about reduced enforcement activity.  

However, the new directive illustrates that while some enforcement areas may shift focus, FCPA violations remain on the DOJ’s radar. The question is not whether the law will be enforced, but rather which types of cases will receive the most attention.  

Compliance officers and legal professionals must stay well-versed in the key provisions of the FCPA. The Anti-Bribery Provisions strictly prohibit offering or providing anything of value to foreign officials in exchange for unfair business advantages. Meanwhile, the Accounting Provisions mandate accurate bookkeeping and the implementation of effective internal controls to prevent corruption and ensure transparency.

The DOJ enforces the criminal violations of the FCPA, while the Securities and Exchange Commission handles civil violations for publicly traded companies. Historically, the FCPA has been instrumental in targeting corporate corruption and unfair competitive practices.  

The DOJ’s revised focus could lead to a refocus on bribery schemes tied to organized crime, rather than traditional corporate corruption. While this aligns with the goal of dismantling cartels and TCOs, it raises questions about the FCPA’s utility in targeting such entities.  

For instance, the FCPA primarily targets issuers (i.e., publicly traded companies), U.S. entities, and individuals engaged in corrupt activities within U.S. territory. Its jurisdictional and entity-focused design may limit its effectiveness against cartels and criminal organizations with less direct U.S. ties.  

Though the DOJ is prioritizing cartel-linked bribery, this does not translate into a reduced need for corporate compliance. Changes under one administration do not diminish the long-term importance of adhering to FCPA regulations.  

Historical trends indicate that FCPA enforcement transcends political changes, solidifying its position as a DOJ and SEC priority. Further, several countries have adopted similar anti-bribery laws, making international cooperation essential in combating corruption.  

A robust corporate compliance program offers significant advantages, regardless of the DOJ’s evolving priorities.  

Effective compliance programs play a crucial role in managing risk by preventing potential violations and enabling early detection for timely interventions. They also support strategic decision-making, providing businesses with a strong foundation to navigate complex regulatory landscapes with confidence. Organizations that prioritize ethical standards foster long-term integrity, building trust, enhancing their reputation, and gaining greater stakeholder confidence. 

Furthermore, as regulatory environments continue to evolve, adaptable compliance systems ensure businesses can meet new requirements and tackle challenges head-on.

Companies with robust compliance programs stand to benefit during DOJ investigations. Effective systems demonstrate proactive efforts to prevent wrongdoing, which may result in reduced penalties—or in some cases, avoid prosecution altogether.  

The DOJ's shift in enforcement priorities brings both challenges and opportunities for compliance officers, legal teams, and executives. Despite these changes, the SEC's role in enforcing FCPA violations remains unchanged, meaning publicly traded companies must continue to stay vigilant. Additionally, businesses should recognize that FCPA violations are subject to statutes of limitations that extend beyond the tenure of a single administration. This highlights the importance of viewing compliance as an ongoing responsibility rather than a short-term obligation.

Attorney General Pam Bondi’s directive should serve as a wake-up call for businesses to reevaluate their compliance efforts. While the DOJ's focus may shift, the need for proactive measures is unchanging.  

For businesses, this is a reminder that effective compliance programs are not just regulatory requirements but strategic assets that help safeguard the organization’s long-term success.  

Is your compliance program up to date? Now is the time to audit your current processes, identify areas for improvement, and ensure you remain prepared for evolving enforcement priorities.

Thank you for listening to Womble Perspectives. If you want to learn more about the topics discussed in this episode, please visit The Show Notes, where you can find links to related resources mentioned today. The Show Notes also have more information about our attorneys who provided today's insights, including ways to reach out to them.

Don't forget to subscribe via your podcast player of choice so that you never miss an episode. Thank you again for listening.