While the first few months of “Trump 2.0” have been riddled with the Republican’s obsession with tariffs (along with his urge to redefine US’ trade ties all around the world) and unleashed chaos in the market, we will analyse a less-discussed topic: the new administration reportedly putting an end to decades of anti-bribery enforcement by repealing the Foreign Corrupt Practices Act (FCPA).
In the words of American businessman Anthony Noto, “Businesses and their leaders, both domestically and internationally, must now negotiate a confusing new environment where political motivation might have an equal impact as established legal precedent.”
Consider the instance of Cognizant Technology Solutions Corporation. In April, a federal judge formally dismissed the Department of Justice’s long-running bribery case against the company’s two former bosses, Gordon Coburn and Steven Schwartz, who allegedly approved a $2 million bribe to expand in India, at the request of Alina Habba, US attorney for New Jersey and a former Trump defence attorney. The DOJ had abandoned a foreign bribery case for the first time since Trump was elected to a second term in office.
However, Noto observed a troubling trend where government prosecutors were increasing their efforts in specific high-profile cases while backing down from others. For example, they moved forward with a bribery case against Smartmatic, a London-based voting machine company that far-right conspiracy theorists falsely claimed helped steal the 2020 election from Trump in favour of former President Joe Biden, just weeks after Coburn and Schwartz were given a go-ahead. Ironically, two Smartmatic executives were the target of a lawsuit filed by the Biden administration in 2024.
Co-founder Jorge Miguel Vasquez and Roger Pinate, both of whom were born in Venezuela, were accused of bribing the Philippines with $1 million. Trump’s DOJ is still pursuing the lawsuit in Miami. Confused lawyers were left wondering: Are some businesses no longer covered by the FCPA?
What’s going on?
The Foreign Corrupt Practices Act makes it illegal for American firms and foreign companies with a US connection to bribe foreign officials.
While transparency advocates have credited enforcement of the law behind Uncle Sam’s vigorous fight against foreign corruption, critics, including business leaders, have been vocal against the law putting American companies at a disadvantage in international markets where certain business practices are common.
Trump, a longtime critic of the FCPA, expressed similar concerns while signing the executive order that ended its enforcement.
The Republican summed up the situation, stating that “it sounds good on paper, but in practicality, it’s a disaster. It means that if an American goes to a foreign country and starts doing business there legally, legitimately or otherwise, it’s almost a guaranteed investigation, indictment, and nobody wants to do business with the Americans because of it.”
The FCPA prohibits companies from providing cash payments or valuable gifts to foreign officials for business advantages. While the law exempts certain “facilitation payments,” it prohibits third parties from making bribes. This was enacted in 1977 following post-Watergate investigations that revealed widespread foreign bribery by US-based multinational corporations.
Concerned about the impact on US foreign policy and international standing, Congress responded by criminalising such practices, imposing prison terms and substantial penalties on violators.
Though initially focused on American companies, the law’s jurisdiction has expanded substantially. It now extends to any foreign business or individual with connections to the US. This broad reach enables prosecutors to pursue cases against foreign firms. A good example was the case involving a Dutch company with a subsidiary based in Ohio that was accused of paying off Chinese officials through another subsidiary in Thailand.
The law had a significant impact on the development of anti-corruption laws around the world. In fact, in 1997, the Paris-based Organisation for Economic Cooperation and Development used the FCPA as a model for its Anti-Bribery Convention, which now has 46 member countries.
While enforcement of FCPA was negligible in the decades following its enactment, the early 2000s marked a significant shift. The United States Justice Department and the Securities and Exchange Commission (SEC), the two agencies responsible for enforcing FCPA’s provisions, ramped up enforcement, driven by emerging business scandals and new congressional requirements for corporate governance and financial reporting.
In recent years, US foreign bribery law enforcement has been robust, with the Justice Department and the SEC opening nearly 174 investigations between 2018 and 2021. Last year, the Justice Department alone filed 17 enforcement actions under the law. Latin America has emerged as a hot spot for investigators in recent years.
In 2016, two Brazilian companies agreed to pay a combined $3.5 billion after pleading guilty in a sprawling international foreign bribery case. US authorities investigated the case because the illicit payments were made through American bank accounts. In 2020, European aviation giant Airbus agreed to pay nearly $4 billion to resolve foreign bribery charges brought in by the United States, Britain and France. Airbus admitted using intermediaries to bribe government officials and airline executives to win lucrative contracts in China and other countries.
In January 2024, SAP SE, a German software company with offices in the US, agreed to pay $220 million to resolve investigations into bribery payments to South African and Indonesian officials. In December, Illinois-based aviation services company AAR Corporation agreed to pay more than $55 million to resolve investigations into bribery payments to government officials in Nepal and South Africa.
However, under “Trump 2.0,” the ambiguity surrounding the FCPA has created a “Wild West” kind of scenario for businesses.
Frank Rubino, a lawyer for one of the charged Smartmatic executives, said, “I don’t understand why the government is taking an inconsistent position. They’re cherry-picking. You’re either going to prosecute all these cases or none of them.”
He further argued that the Cognizant scenario isn’t dissimilar to what’s being alleged against Smartmatic, with the only difference being the “one-eighty on the part of prosecutors.”
During his thirty years in practice, Rubino has focused exclusively on federal white-collar crime, including cases involving alleged FCPA violations, in Coral Gables, Florida. To some extent, he concurs that the FCPA’s enforcement can be overly stringent.
He claims that “the smallest thing,” such as bringing a potential customer to dinner, may be interpreted as a transgression. However, the Trump administration appears to be favouring one company over another, which motivates him to prepare for a trial date in October 2025.
The executive order now imposes a six-month freeze on foreign bribery investigations by the Justice Department. Almost all FCPA cases will be suspended while Attorney General Pam Bondi conducts a review and revises enforcement guidelines. The executive order gives Bondi discretion to extend the pause for an additional six months. She has now directed federal prosecutors to prioritise FCPA cases involving cartels and transnational criminal organisations.
Trump: Vocal critic of the law
According to the law firm Greenberg Traurig, 2024 was one of the highest-earning years since the FCPA’s inception in 1977, with the DOJ and SEC collecting over $1.328 billion in total penalties. Over the last ten years, several well-known companies have been hit with bribery fines.
For example, Airbus settled for more than $3 billion in 2020; Goldman Sachs settled for $2 billion in relation to the 1MDB scandal; and Glencore, a mining company based in Switzerland, admitted guilt and paid more than $1 billion to resolve an investigation.
During his first term, Trump described the FCPA as a “dreadful law,” claiming that it “actively harms American economic competitiveness.”
As the Republican puts the law into abeyance for 180 days, Paris-based OECD has argued that a protracted FCPA pause “will not serve its intended purpose to restore American competitiveness and security.”
By seriously endangering American businesses operating overseas and denying the US a deterrent tool it has used to protect its ventures from unfair competition, it might achieve the exact opposite.
According to former OECD director Nicola Bonucci, Washington was temporarily at a disadvantage because other nations were ignoring bribery. He claimed that between 1977 and 1999, “the paradox is that the uneven playing field was a valid argument. Now, it’s considerably less so.”
“The standard was altered in 1999 when 46 signatory states, including the US, decided to band together and combat bribery globally as part of the OECD Anti-Bribery Convention,” which Bonucci assisted in implementing.
According to Bonucci, US businesses doing business overseas are in a difficult situation, and if some businesses are treated differently from others, there may be a rise in bribery requests and more confusion.
“Bonucci claims that there is more uncertainty because it is unclear why some ongoing cases are being dropped while others are being pursued,” the Voice of America reported.
The majority of defendants in FCPA enforcement cases over the previous ten years were currently located in other nations and areas. Based on data from 2015 to 2024, a recent report from the law firm Gibson Dunn reveals that 62% of individual defendants and 50% of corporate defendants were based outside the United States.
Furthermore, foreign corporations contributed $6.11 billion of the $8.3 billion total, accounting for eight of the ten largest monetary settlements. If the US withdraws from the Anti-Bribery Convention or if the 180-day pause is extended, OECD chair Drago Kos anticipates that some countries may think that the Wild West of unpunished corruption is back.
Even before his first term, Trump had been a vocal critic of the law. In 2012, he called it a “horrible” and “ridiculous” statute that impeded American companies’ ability to do business abroad. Despite his criticism, FCPA enforcement surged during his first term in office, with 2020 marking a record-breaking year, according to the Morrison Foerster law firm.
The executive order framed the pause in enforcement as part of the president’s broader agenda to “advance American economic and national security by eliminating excessive barriers to American commerce abroad,” apart from mentioning that FCPA’s scope has been “stretched beyond proper bounds and abused in a manner that harms the interests of the United States.”
A White House fact sheet on the order further stated that the “overenforcement” of the law harms American companies and “infringes on the President’s Article II authority to conduct foreign affairs.”
“This concern about aggressive enforcement isn’t new. There has been a focus on the quantity of enforcement actions compared to the quality of those enforcement actions. Enforcement has, in many cases, gone so far off the rails that this law is being enforced in ways that do put companies at a competitive disadvantage,” said Mike Koehler, a law professor and leading authority on the FCPA, who noted that both Republicans and Democrats have raised similar issues over the past two decades.
Transparency advocates, however, warn that suspending enforcement could deal a significant blow to global anti-bribery efforts.
“This pause will work to the advantage of unscrupulous business actors around the world who until now feared US criminal pursuits,” Transparency International said in a statement calling on other OECD Anti-Bribery Convention members to increase their enforcement following Washington’s policy shift.
Proximity to politics matters
As per the Associated Press, Smartmatic’s voting machines were only utilised in Los Angeles County, a Democratic stronghold in a state that is not competitive, and that Republican candidate Donald Trump chose not to run for office after the 2020 election.
The Department of Justice continues to pursue this case. Observers note that the Trump administration has a pattern of targeting perceived adversaries while favouring close relationships with its inner political circle. In line with this approach, Trump granted a pardon to Nikola founder Trevor Milton, who was convicted of defrauding investors in late March.
Throughout his campaign and the period leading up to his inauguration, the cryptocurrency industry contributed millions of dollars, and he did the same.
In March 2025, the SEC halted its investigations into Ripple, Coinbase, and Gemini, and he pardoned three BitMEX founders who had been found guilty of money laundering. This year, the SEC also dropped a lawsuit against Justin Sun, a cryptocurrency entrepreneur who, just after Election Day, invested millions in the Trump family’s World Liberty Financial company.
It remains to be seen if businesses will now feel more confident when making cross-border transactions because of the moral guidelines the Trump administration seems to be establishing. In any case, analysts say that the current state of affairs is not favourable for the United States.
DealRoom CEO Kison Patel said, “I think there’s some sentiment that is starting to shift. It’s not as glamorous to go into business or get acquired by an American company, just given all the current sentiments towards our administration right now.”
As of mid-April, data tracker Dealogic reports that while volume is up in the Middle East/Africa (80%), Asia (99%), Japan (142%), Canada (53%), and Europe (9%), US M&A (merger and acquisition) activity is down 3% in 2025 compared to this time in 2024.
As of mid-April, data tracker Dealogic reports that while volume is up in the Middle East/Africa (80%), Asia (99%), Japan (142%), Canada (53%), and Europe (9%), US M&A (merger and acquisition) activity is down 3% in 2025 compared to this time in 2024.
“The global anti-bribery movement has grown stronger and more interconnected, and the United States is swimming against the tide,” Kos says, adding that most nations are unlikely to follow Washington’s example if it repeals the FCPA or cuts ties with the OECD.
He argues that “the anti-corruption world is now strongly connected.” While the withdrawal of one nation can be very challenging, it won’t prevent the rest of the world from continuing the fight against corruption. In simple terms, other countries that maintain their commitment to leading by example for emerging economies can fill the leadership void left by the United States.
The Trump administration’s recent moves to suspend the enforcement of the FCPA signal a significant shift in US foreign policy. While proponents argue that it could level the playing field for American businesses, critics warn of the damage to global anti-corruption efforts and the growing uncertainty in the business environment.
As countries increasingly cooperate on anti-bribery initiatives, the US’s withdrawal from these efforts could weaken its international standing. Despite this, the global commitment to fighting corruption remains strong, with other nations poised to step up in the absence of US leadership.