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FCPA enforcement under Trump administration
As is the case with the election of every new American President, businesses around the world have been waiting to understand the trade, business and regulatory policies of the new administration in the United States since November 2016. On the basis of his many campaign promises and his statements as a top business leader, President Donald Trump has caused some uncertainty in the corporate world. In May 2012, during a telephone appearance on CNBC, Donald Trump called the US Foreign Corrupt Practices Act (FCPA) a “horrible” and “outrageous” law and claimed that it put American businesses at a “huge disadvantage”.
What does this mean for FCPA enforcement under the Trump Administration?
Between 2012 and now, there have been several anti-bribery and corruption efforts around the world with several countries having significantly strengthened their anti-corruption regimes. The UK has put serious effort into prosecutions under the UK Bribery Act. France, Germany, Brazil and Mexico have implemented their own anti-corruption laws, and others such as China and South Korea have vigorously pursued corruption at the highest levels of government.
More recently, Jay Clayton, President Trump’s nominee for Chairman of the Securities and Exchange Commission (SEC), stated at his nomination hearing that there is “zero room for bad actors in our capital markets” and that companies should think long and hard about potential exposure to not just the FCPA but also similar oversight and enforcement actions from other Organisation for Economic Co-operation and Development (OECD) countries. This is in addition to statements from senior Department of Justice (DOJ) officials, including Trevor McFadden (Deputy Assistant Attorney General in the Criminal Division) who said that the FCPA’s fight against official corruption is a solemn duty of the Justice Department regardless of party affiliation.
Kenneth Blanco (Assistant Attorney General in the Criminal Division) said that FCPA prosecutions are necessary to combat global corruption that stifles economic growth and threatens the national security of the United States, and that the Criminal Division remains committed to doing its part by vigorously investigating and prosecuting international crime when it violates US laws. In the same speech, Blanco also announced an extension to the DOJ’s year-long “FCPA Pilot Program” to encourage companies to self-report bribery violations and to cooperate with the ensuing investigations in exchange for reduced penalties and, in some cases, declinations to prosecute.
The DOJ also issued new guidance on corporate compliance programmes in February 2017, following the confirmation of the new Attorney General, Jeff Sessions. This guidance includes a list of important topics and sample questions it uses while evaluating the effectiveness of corporate compliance programmes, forming an essential resource for compliance departments seeking to gauge the efficacy of their anti-bribery and corruption framework. All of the above point toward continued aggressive enforcement of the FCPA.
Companies should not base their anti-corruption policies and business decisions on the basis of what President Trump may or may not have said about the FCPA, and must continue to take proactive steps to ensure compliance with anti-corruption legislations across the world, including the FCPA.
If you have any questions about anti-bribery and corruption compliance, or the impact of the new guidelines on your organisation, please write to us at email@example.com or on Twitter by following @deloitteindia.
Authored by: Sumit Makhija, Partner, Deloitte India and Anshuk Megharikh, Manager, Deloitte India