Trump’s pause of the Overseas Corrupt Practices Act has left firms confused and solid doubt on US management of anti-corruption efforts.
When President Donald Trump rolled again the Overseas Corrupt Practices Act (FCPA) simply three weeks after his inauguration, a long time of anti-bribery enforcement seemingly got here to a halt. Nonetheless, it rapidly grew to become obvious that authorities prosecutors had been retreating solely from some high-profile circumstances whereas doubling down on others.
Corporations and their executives, each within the US and elsewhere, at the moment are left to navigate a murky new panorama: one the place political motivation could also be simply as influential as authorized precedent. Take, for instance, the case of Cognizant Know-how Options Corp. In April, a federal decide—on the behest of Alina Habba, US legal professional for New Jersey and a former Trump protection lawyer—formally dropped the Division of Justice’s long- operating bribery case in opposition to the corporate’s two former bosses, Gordon Coburn and Steven Schwartz, who allegedly approved a $2 million bribe to develop in India. It was the primary time the DOJ had walked away from a overseas bribery prosecution since Trump took workplace for his second time period.
“They’re cherry-picking. You’re both going to prosecute all these circumstances or none of them.”
Frank Rubino, Legal professional
Only a few weeks after Coburn and Schwartz acquired a move, prosecutors proceeded with a bribery case in opposition to Smartmatic, a London-based voting machine firm that far-right conspiracy theorists falsely claimed helped steal the 2020 election from Trump in favor of former President Joe Biden. Paradoxically, it was the Biden administration that introduced a case in opposition to two Smartmatic executives final yr. Venezuelan-born co-founder Roger Piñate and his colleague, Jorge Miguel Vasquez, had been each charged with making $1-million bribes within the Philippines. Trump’s DOJ continues to be shifting ahead with the lawsuit in Miami.
Confused attorneys had been left questioning: Does the FCPA now solely apply to some firms and never others?
“I don’t perceive why the federal government is taking an incon- sistent place,” says Frank Rubino, a lawyer for one of many charged Smartmatic executives. The Cognizant situation isn’t dissimilar to what’s being alleged in opposition to Smartmatic, he argues. The one distinction is the one-eighty on the a part of prosecutors. “They’re cherry-picking,” says Rubino. “You’re both going to prosecute all these circumstances or none of them.”
Rubino’s total follow in Coral Gables, Florida, has been dedicated to federal white-collar crime, together with circumstances involving alleged FCPA violations, over the course of his 30-year profession. And he considerably agrees that FCPA enforcement might be too strict. The “tiniest factor”—e.g., taking a potential purchaser to dinner—might be construed as a violation, he says. However the Trump administration’s look of favoring one firm over one other encourages him to gear up for an October trial date.
“We’ll put together as if Trump by no means signed that govt order and hopefully achieve success,” Rubino says. “The truth that sure circumstances are dismissed has no bearing on our preparation.”
A ‘Horrible Legislation’?
In line with legislation agency Greenberg Traurig, the DOJ and the Securities and Alternate Fee obtained over $1.28 billion in complete FCPA penalties in 2024, one of many highest grossing years because it grew to become legislation in 1977.
Over the previous decade, a number of high-profile companies have been fined for bribery, together with Airbus, which settled for over
$3.9 billion in 2020; Goldman Sachs, which settled for $2.9 billion in reference to the 1MDB scandal; and Glencore, a Switzerland-based mining agency, which pleaded responsible and paid over $1.1 billion to settle an investigation.
Throughout his first time period, Trump known as the FCPA a “horrible legislation.” This yr, he claimed that it “actively harms American financial competitiveness.” His govt order enacted a 180- day enforcement pause to permit Legal professional Normal Pam Bondi time to evaluation FCPA “tips and insurance policies.”
This was notably jarring for the Group for Financial Cooperation and Growth (OECD), the Paris- primarily based group that promotes financial development, stability, and commerce amongst a broad group of nations, together with the US.
Per a letter despatched to Bondi on Feb. 13 and obtained by Global Finance, the OECD made its case: A chronic FCPA pause “won’t serve its meant function to ‘restore American competitiveness and safety.’ It could obtain the very opposite by placing American firms working overseas at severe danger and depriving america of a deterrent instrument it has used to pro- tect US firms from unfair practices by overseas rivals.”
The letter additionally argued why Trump’s logic, whereas legitimate, is dated.
Nicola Bonucci, a former OECD director, maintains that the US was, for a time, at an obstacle since different nations had been turning a blind eye to bribery. “The paradox is that the uneven taking part in discipline was a real argument level between 1977 and 1999,” he says. “It’s a lot much less so now.”
The 1999 OECD Anti-Bribery Conference, which Bonucci helped implement, modified the norm when 46 signatory states, together with the US, agreed to unite and struggle bribery on a world scale. US firms working overseas “are in a troublesome scenario,” Bonucci provides, fearing an uptick in bribery solicitations and additional confusion if some firms are handled in another way than others. “The rationale for discontinuing some ongoing circumstances whereas pursuing others will not be clear and creates additional uncertainty,” Bonucci says.
Because it stands, most defendants in FCPA enforcement actions over the previous decade had been primarily based in different nations and areas. A brand new report from legislation agency Gibson Dunn primarily based on information from 2015 to 2024 finds that all through that interval, 50% of company defendants and 62% of particular person defendants had been non-US primarily based. Moreover, overseas firms had been liable for eight of the ten largest financial settlements, contributing $6.1 billion of the $8.3 billion complete.
Ought to the 180-day pause grow to be everlasting, or if the US pulls out as a signatory of the Anti-Bribery Conference, OECD chair Drago Kos expects “some nations might imagine that the Wild West of unpunished corruption is again.”
The US might additionally see its picture as “a tricky enforcer of world anti-bribery norms … slip into oblivion” or be deemed a “rogue state,” he provides. “That is why I actually hope that after 180 days the US shall be again on monitor.”
Proximity To Politics Issues
Per the Related Press, Smartmatic’s voting machines had been solely utilized in Los Angeles County, a Democratic stronghold in a non-competitive state that Trump, a Republican, didn’t contest after the 2020 election. But, it stays within the DOJ’s crosshairs. Observers of the case notice that this tracks with the Trump administration’s penchant for going after
perceived enemies whereas pleasant ties to his interior political circle seem to hold weight. In late March, Trump pardoned Nikola founder and donor Trevor Milton, convicted of investor fraud. He additionally confirmed leniency to the cryptocurrency business, which supplied tens of millions in donations all through his marketing campaign and as much as his inauguration. In late March, he pardoned three BitMEX founders convicted of cash laundering whereas the SEC deserted investigations involving Ripple, Coinbase, and Gemini.
This yr, the SEC additionally ditched a lawsuit involving Justin Solar, a crypto entrepreneur who invested tens of millions within the Trump household’s World Liberty Monetary agency shortly after Election Day.
Whether or not firms will now be emboldened by the moral requirements the Trump administration seems to be setting each time they make a cross-border trans- motion stays to be seen. Both manner, observers say the present goings-on usually are not a superb search for the US.
“I feel there’s some sentiments which can be beginning to shift,” says Kison Patel, CEO of DealRoom, an M&A lifecycle administration software program supplier. “It’s not as glamorous to enter enterprise or get acquired by an American firm, simply given all the present sentiments in the direction of our administration proper now.”
Certainly, as of mid-April, information tracker Dealogic exhibits US M&A exercise is down 3% in 2025 in comparison with this time final yr, whereas in different areas, quantity is up: Japan (142%), Asia (99%), Center East/Africa (80%), Canada (53%), and Europe (9%).
The US is swimming in opposition to the tide as the worldwide stance in opposition to bribery has grow to be sturdy and interconnected, Kos says, predict- ing that the majority nations are unlikely to observe Washington’s lead ought to it repeal the FCPA or finish its involvement with OECD. “The anti-corruption world is now strongly linked,” he argues, “and the truth that one nation is pulling out, although very painful, won’t be an insurmountable impediment for the remainder of the world to proceed to struggle corruption. Merely put: the main position of the US shall be changed by different nations that can con- tinue to indicate the way in which for creating economies.”
