By PAUL O’DONOGHUE, Senior Correspondent
THE latest guidelines for the U.S. Foreign Corrupt Practices Act (FCPA) narrows the scope of the law, which bars Americans bribing foreign officials for business deals.
Legal experts said the new approach will “emphasize a prosecutorial focus on protecting U.S. interests… rather than routine business practices”.
Daniel Alonso, an white collar crime expert at Vedder Price, said the new guidance “does not, as some feared, kill FCPA enforcement”.
“But rather, it [the guidance] narrows it somewhat,” he said.
In February, U.S. President Donald Trump paused enforcement of the FCPA, calling the law “a disaster”.
“It means that if an American goes over to a foreign country and starts doing business over there legally, legitimately or otherwise, it’s almost a guaranteed investigation [or] indictment. And nobody wants to do business with the Americans because of it,” he said.
The FCPA has been central to major corruption cases, including a former McKinsey partner’s guilty plea in a South African scandal. It was also key in a $950 million settlement with U.S. defense contractor RTX over bribery and fraud.
Pausing the FCPA was widely criticised by financial crime experts. The move was viewed as a watering down of the new administration’s commitment to tackle corruption and kleptocracy.
New FCPA guidelines
The newly-published FCPA guidelines from the U.S. Department of Justice (DOJ) provides a list of factors to evaluate when determining whether to proceed with an investigation or enforcement.
“These new guidelines closely mirror the policy concerns animating the EO (Executive Order) pausing FCPA enforcement,” according to law firm DLA Piper.
The guidelines prioritize “protecting American economic interests and national security”, the firm said.
It added that there is also a focus on enforcement against cartels and transnational criminal organizations (TCOs).
“These guidelines have been applied to the DOJ’s existing FCPA cases, resulting in closure of a substantial number of ongoing investigations and enforcement actions,” DLA Piper said.
“Additionally, all new investigations and enforcement actions must be approved by the Assistant Attorney General for the Criminal Division.” The firm said this suggests “greater control exercised above the level of the line prosecutor”.
Mr Alonso said the guidance “allows for the investigation and prosecution of more traditional FCPA cases.”
“As long as the emphasis is on serious cases of corporate wrongdoing,” he added in a post on LinkedIn.
“[The] DOJ’s new policy provides little reason for companies to loosen anti-corruption compliance efforts.”
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