Reshaped Priorities: Navigating Changes to FCPA and FARA Enforcement

FCPA
The FCPA was enacted in 1977 out of concern that U.S. companies were making illicit payments to foreign government officials to secure business, leading to distortions in global commerce and reputational damage to U.S. businesses. In response, Congress included two primary provisions in the FCPA:

• Anti-Bribery Provisions: These provisions apply to U.S. persons and entities, including domestic companies, their officers, directors, employees and agents, as well as foreign companies and individuals that engage in corrupt conduct while in U.S. territory or by use of the U.S. mails or any means or instrumentality of interstate commerce. They make it unlawful to offer, pay, promise to pay, or authorize the payment of money or anything of value to foreign officials with the intent to obtain or retain improper commercial advantage or to influence official actions.
• Accounting Provisions: These provisions apply to issuers—companies that are publicly traded on U.S. stock exchanges or required to file periodic reports with the Securities and Exchange Commission (SEC). They mandate that issuers maintain accurate books and records and implement internal controls adequate to prevent and detect violations.

Violations of the FCPA can result in significant civil and criminal penalties, including fines, disgorgement of profits and imprisonment for individuals involved in misconduct. Companies may also face compliance monitorships and reputational harm. The DOJ leads criminal enforcement of the FCPA, while the SEC handles civil enforcement, primarily against issuers and their associated persons. In recent years, FCPA enforcement has been robust, with both the DOJ and SEC actively pursuing violations. In 2024, the DOJ and SEC filed 26 FCPA-related enforcement actions, and at least 31 companies were under investigation by year end.

Companies with cross-border operations, supply chains and partnerships have faced increased compliance burdens as FCPA enforcement ramped up significantly since the mid-2000s. Joint FCPA guidance issued and updated by the DOJ and SEC has repeatedly emphasized the expectation that companies will implement and maintain robust compliance programs that function effectively in practice and improve over time. That effort can be expansive and resource-intensive, particularly for businesses that operate globally. And while the DOJ and SEC have emphasized repeatedly that an adequate compliance program is a baseline expectation, less guidance exists on what “adequate” means in practice. Accordingly, even the best-resourced and well-intentioned companies can find it challenging to navigate U.S. compliance expectations while operating in a highly complex international environment.

FARA
Enacted in 1938, FARA requires individuals and entities acting as agents of foreign principals to disclose their relationship with the foreign principal and provide information about related activities and finances. The Act’s purpose is to ensure transparency in efforts to influence U.S. public opinion, policy and laws on behalf of foreign interests. While originally intended to counter foreign propaganda, FARA has evolved into a tool for ensuring that lobbying and advocacy efforts conducted on behalf of foreign governments or entities are disclosed to the U.S. government.

FARA enforcement has historically been less vigorous than that of the FCPA. In recent years, however, there has been a renewed focus by the DOJ on identifying and prosecuting violations. Notable FARA cases in 2024 include the indictment of former New York State official Linda Sun in the Eastern District of New York for violating and conspiring to violate FARA while allegedly acting on behalf of the People’s Republic of China and the Chinese Communist Party without registering as a foreign agent; the indictment of two Russian nationals in the Southern District of New York for conspiracy to violate FARA and commit money laundering by covertly facilitating media content in furtherance of Russian interests; the conviction of U.S. Senator Robert Menendez and two businessmen in the Southern District of New York for participating in a bribery and foreign influence scheme relating to Egypt; the charging of Su Mi Terry in the Southern District of New York with substantive and conspiracy violations of FARA for allegedly acting as an unregistered agent of the Republic of Korea; and the indictment in the Southern District of Texas of U.S. Congressman Enrique Roberto “Henry” Cuellar and his wife, Imelda Cuellar, for bribery and FARA violations linked to the Government of Azerbaijan.

Policy Changes
On February 10, 2025, President Trump signed an Executive Order “to restore American competitiveness and security by ordering revised, reasonable enforcement guidelines for the Foreign Corrupt Practices Act (FCPA) of 1977.” President Trump’s Executive Order asserts that “FCPA overenforcement infringes upon the President’s Article II authority to conduct foreign affairs, necessitating this review and new enforcement policies.” According to the White House, FCPA “overenforcement” has weakened U.S. commercial strength by, among other factors, “prohibiting practices common among international competitors, creating an uneven playing field.” The Executive Order thus directs Attorney General Bondi to pause FCPA actions, for 180 days, until she issues revised FCPA-enforcement guidance that “promotes American competitiveness and efficient use of federal law enforcement resources.”

The February 10, 2025, Executive Order followed a February 5, 2025, memorandum from Attorney General Bondi, in which she directed DOJ prosecutors to deprioritize traditional FCPA and FARA cases absent some nexus to cartels and transnational criminal organizations. Attorney General Bondi’s February 5 memorandum also removed the requirement that FCPA and FARA investigations be authorized and conducted solely by the DOJ’s Criminal Division and Fraud Section in Washington, DC, giving rise to speculation that a more decentralized approach to FCPA and FARA enforcement—led by U.S. Attorneys offices across the country—could in theory result in increased enforcement. At least for the FCPA, however, increased enforcement now seems unlikely given the February 10, 2025, Executive Order.

Considerations for Companies and Boards
The Trump Administration’s Executive Order pausing FCPA enforcement, and Attorney General Bondi’s memorandum reining in the FCPA and FARA, potentially mark a significant shift in the DOJ’s enforcement approach. Even so, companies and their boards of directors will need to wait for more concrete guidance from the DOJ before they can confidently decide whether revision of corporate policies, procedures and internal controls may be appropriate in line with new regulatory guidance.

While the future of FCPA and FARA enforcement may be uncertain, companies and boards should continue to maintain robust compliance programs for the following reasons:

• The FCPA and FARA are still federal law, carrying limitations periods that are longer than a presidential term, and which can be tolled for longer still based on a variety of factors. Today’s conduct may be prosecuted in future years by a different administration.
• The ordered “pause” in DOJ FCPA enforcement is temporary. Only time will tell how the DOJ ultimately revises its approach to FCPA enforcement.
• The decentralization of DOJ FCPA enforcement may still result in increased activity by local U.S. Attorneys Offices, particularly those which have created whistleblower programs.
• Bribery and corruption are often illegal in foreign jurisdictions. Companies engaged in such conduct can be subject to significant local legal penalties and reputational harm even in the absence of FCPA enforcement.
• The SEC is responsible for civil enforcement relating to U.S. issuers, and it may take a disparate enforcement approach—especially with respect to U.S. issuers that are not U.S. companies. The SEC also maintains a whistleblower program used to elicit information about potential FCPA violations.
• FCPA violations may also violate U.S. fraud laws, meaning that federal prosecutors might still have an avenue to bring foreign bribery cases under federal statutes other than the FCPA, without running afoul of the February 10, 2025, Executive Order, Attorney General Bondi’s February 5, 2025, memorandum, or subsequent DOJ guidance if limited specifically to FCPA enforcement.
• In addition, the corporate compliance infrastructure developed historically for FCPA compliance—in particular the internal controls, compliance resources and testing mechanisms—are still critical for global businesses faced with U.S. sanctions, export controls, data privacy, data security, and other national security risks. Compliance programs ultimately may need to pivot in focus, but corporate compliance requirements are unlikely to disappear.

Conclusion
The Trump Administration’s Executive Order pausing FCPA enforcement, and Attorney General Bondi’s refocusing of DOJ priorities, potentially mark a significant shift in the federal government’s approach to policing foreign corruption and domestic lobbying on behalf of foreign actors. Companies should nevertheless remain cautious about the ultimate impact of these announcements.

Businesses engaged in cross-border trade or lobbying efforts should continue prioritizing compliance, ensuring they are well-positioned for any shifts in enforcement under future administrations. Companies should view this period as an opportunity to assess and refine compliance strategies, and careful monitoring of policy developments and compliance activities will be essential in this rapidly evolving regulatory landscape.