The new administration has signaled that the Department of Justice (“DOJ”) will significantly shift its approach to criminal corporate enforcement.  Specifically, on February 5, 2025, newly-confirmed United States Attorney General Pamela Bondi issued a memorandum (the “Bondi Memo”) that outlined the ways in which the DOJ will aim to eliminate cartels and transnational criminal organizations (“TCOs”). The Bondi Memo set forth directives to “harness the resources of the [DOJ] and empower federal prosecutors” to work toward the goal of eliminating cartels and TCOs.  From a money laundering and anti-money laundering perspective, the Bondi Memo establishes that the Department’s near singular priority will be on cases targeting cartels and TCOs.  While, of course, cartels and TCOs do not represent new threats to be targeted by financial institutions’ anti-money laundering programs, the Department’s prioritization of cases involving cartels and TCOs suggest financial institutions should redouble their efforts to ensure their anti-money laundering programs are keeping up with cartels and TCOs’ money laundering practices.  As we’ve recently blogged, the penalties can be severe for financial institutions whose programs fail to detect and prevent cartels and TCOs’ exploitation.

Additionally, the Money Laundering and Asset Recovery Section of the DOJ will disband its Task Force KleptoCapture, its Kleptocracy Team, and the Kleptocracy Asset Recovery Initiative, which were previously tasked with enforcing sanctions against Russia and aiding in the recovery of stolen foreign assets.  

However, the Bondi Memo extends far beyond Money Laundering and Asset Recovery and represents a seismic shift in overall DOJ enforcement approaches and philosophy.  The Bondi Memo has taken substantial steps to limit prosecutions pursuant to the Foreign Corrupt Practices Act.  It outlines the DOJ’s intent to greatly scale back the scope of its prosecutions under the FCPA, and directed the DOJ to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs, and shift focus away from investigations and cases that do not involve such a connection.”

By way of an Executive Order dated February 10, 2025, President Trump doubled down on the Bondi Memo. The Executive Order asserts that “[c]urrent FCPA enforcement impedes the United States’ foreign policy objectives and therefore implicates the President’s Article II authority over foreign affairs.”  Thus, the Executive Order directed the Attorney General to engage in a review of the DOJ’s guidelines and policies governing investigations and enforcement actions under the FCPA within 180 days.  During the 180 day period, the Executive Order mandates that no new investigations or enforcement actions shall be initiated absent a determination by the Attorney General that an individualized exception should be made.  While the Executive Order does not reference the Securities and Exchange Commission’s (“SEC”) oversight of the FCPA, it remains to be seen how the SEC will approach such enforcement actions under this administration suggesting, at least, that enforcement may continue for now.

While it appears that the DOJ’s efforts to enforce the FCPA will be limited, public corporations, in adhering to both their fiduciary duties to their shareholders and their Codes of Conduct, will likely continue to abide by the Act’s provisions that forbid the payment of anything of value to foreign officials for the purposes of obtaining or retaining business or a business advantage.  While a DOJ investigation my not be imminent, the coast is not entirely clear to disregard the FCPA and its mandates.  In fact, non-compliance could be more problematic.

First, the Act’s statute of limitations will outlive this administration’s tenure.  Thus, as long as the FCPA remains good law, it cannot be said that an enforcement action will never occur.

Second, and perhaps more concerning in the short term, the administration’s shifting focus with regard to the FCPA does not alter the global landscape in which transnational companies exist. Since the passage FCPA was enacted in 1977, numerous countries have passed their own anti-corruption laws.  For example, the UK Bribery Act and Canada’s Corruption of Foreign Public Officials Act, are two examples of foreign acts that prohibit the bribery of public officials.  While previously, the DOJ may have taken the lead in investigations involving US entities, it is possible that without the DOJ’s guidance in this area, other nations will become more active in rooting out corruption.  Not only might this result in foreign investigations, but it could also result in prosecutions abroad.  And, while a DOJ investigation was certainly unpleasant, it did provide a degree of familiarly and often certainty.  Without the DOJ’s leadership, a new layer of uncertainty exists, which mandates that corporations continue to comply with and maintain robust compliance programs to prevent the bribery of public officials.

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