There has been considerable speculation about how vigorously the Trump administration will enforce the Foreign Corrupt Practices Act (“FCPA”) given Trump’s past criticism of this law. In 2012, Trump famously called the FCPA a “horrible law”. But thus far senior top officials in the Department of Justice (“DOJ”), the State Department and the U.S. Securities and Exchange Commission have said that strong FCPA enforcement will continue. And there is good reason for this.
According to Forbes, “[e]very year, the World Bank estimates businesses and individuals pay an estimated $1.5 trillion in bribes – the rough equivalent of two percent of global GDP—and a staggering ten times the value of overseas development assistance.” As part of the President Trump’s “America First” vision, the U.S. Department of State and U.S. Agency for International Development have announced that they intend to:
Ensur[e] a Level Playing Field for American Workers and Businesses [by] providing dedicated assistance that fights corruption; promotes rule of law, transparency, and accountability initiatives; and strengthens market-oriented and governance institutions to enable economic reforms. (Emphasis supplied).
FCPA enforcement has never been a partisan issue; the major increase in FCPA prosecutions we have witnessed over the past decade and half occurred under both Republican and Democratic administrations. There is no empirical evidence of a decline in FCPA enforcement activity. In our own anti-corruption practice here in Thailand, we have seen a major increase in FCPA investigations and compliance measures by American and non-American companies since the start of 2017.
Kenneth Blanco, Acting Assistant Attorney General for the Criminal Division the DOJ, said on 10 March 2017 – well into the Trump administration – at the American Bar Association National Institute on White Collar Crime, that FCPA prosecutions:
…are necessary to combat global corruption that stifles economic growth, creates an uneven playing field for businesses and corporations, and threatens the national security of the United States and other civilized nations.
Even if President Trump remains critical of the FCPA because it purportedly “handicaps U.S. businesses”, this does not necessarily mean that FCPA enforcement activity will decline. Many commentators have observed that the administration could seek to level a perceived unequal playing field for U.S. companies by subjecting foreign entities to greater scrutiny and possible prosecution. Doing so, will address any concerns about the FCPA creating an unequal playing field for U.S. companies. It could also lead to another increase in FCPA enforcement activity.