Executive Order Pausing FCPA Enforcement: What It Means for Compliance Teams

On February 10, 2025, the President signed an Executive Order pausing enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days. The order also calls for the issuance of updated guidelines or policies, citing concerns that aggressive enforcement has put U.S. businesses at a competitive disadvantage abroad. While the full impact of this decision remains uncertain, compliance teams must stay vigilant and proactive.

Understanding the Implications

Uncertain Future, Increased Risks

With enforcement temporarily paused, some organizations may adopt a more permissive attitude toward transnational bribery, believing that legal repercussions are less likely. However, this perception could create significant risks down the line:

• Future Guidelines Unknown: The specifics of any new enforcement policies remain unclear, leaving businesses uncertain about compliance expectations.
• Potential Use as a Political Tool: The FCPA could be selectively enforced against foreign competitors, turning it into a geopolitical bargaining chip, and foreign enforcement enforcers may retaliate against U.S. companies.
• Ethical Lapses Could Rise: Employees, from sales teams to executives, may feel emboldened to engage in high-risk behavior, increasing the likelihood of misconduct.
• Reputational Risk Persists: Setting aside any enforcement exposure, stakeholder scrutiny of organizations is at an all-time high and reputational damage from overseas bribery could be crippling to your organization and brand.

Enforcement Risks Still Exist

Despite the temporary pause, the risks associated with FCPA violations have not disappeared:

• A Future Administration Could Reinstate Strict Enforcement: The FCPA’s statute of limitations is five years, meaning companies could still face significant exposure once enforcement resumes.
• Foreign Enforcers Are Unaffected: International anti-corruption enforcement remains active, and other countries may increase scrutiny of U.S. businesses if they perceive weakened domestic enforcement.
• Whistleblower Reports May Increase: A perception of relaxed compliance could lead to more hotline reports and internal investigations, increasing operational burdens on compliance teams.

How Compliance Teams Should Respond

Given these uncertainties, strong compliance programs remain essential. Here’s how organizations should prepare:

• Stay Proactive
  • Continue monitoring transactions and employee conduct for potential red flags that signal a change in employee behavior.
  • Reinforce training programs to remind employees that bribery remains unethical and prohibited under company policies.

• Maintain Robust Investigations & Reporting
  • Expect an uptick in internal reports as employees test compliance boundaries.
  • Strengthen whistleblower protections to encourage ethical reporting.

• Prepare for Future Enforcement Snapback
  • The risk of future U.S. and current ex-U.S. enforcement remains, so maintaining compliance controls, testing, and investigations is crucial.
  • Delaying compliance investments now could increase your long-term liability.

Final Thoughts

While the 180-day pause on FCPA enforcement may create temporary uncertainty, compliance professionals must remain diligent and forward-thinking. Ethical business practices and strong internal controls will continue to be critical in protecting organizations from long-term legal and reputational damage.

By staying proactive, maintaining compliance frameworks, and preparing for potential future enforcement, companies can navigate this shifting landscape while upholding integrity in their business operations.