On February 10, 2025, President Trump issued an executive order pausing federal enforcement over the U.S. Foreign Corrupt Practices Act by ordering the U.S. Attorney General to “cease initiation of any new FCPA investigations or enforcement actions,” and act appropriately to “restore proper bounds” on FCPA enforcement.
The U.S. FCPA prohibits U.S. citizens and U.S. companies, both domestic and foreign (with a U.S. nexus), from offering or paying “anything of value” to any foreign government official in an attempt to obtain or retain business. Its intent is to promote fair business competition and appropriately punish those who do not play by the rules. It is worth noting that, while FCPA enforcement is on pause during the Trump administration the law is not repealed. Further, the statute of limitations extends beyond the term of this presidency and enforcement at the federal level in the next administration is still very much on the table.
California takes a stand
Nearly two months after President Trump issued his executive order, California Attorney General Rob Bonta, on April 2, issued a legal alert reminding businesses operating in California that bribing foreign government officials is still illegal, “regardless of the Trump Administration’s order temporarily suspending federal enforcement of the FCPA.”
“Illegal activity is still illegal,” Bonta stated in a press release. “Paying bribes to foreign officials is not only unethical, it’s also bad for business. Bribery erodes consumer confidence in the market and rewards corruption instead of competition.”
“As the fifth largest economy in the world, California has a vested interest in defending honest business,” Bonta continued. “Despite the Trump Administration’s actions, I remind businesses in California that bribing foreign officials is illegal under California law and will not be tolerated.”
In the legal alert, Bonta reminds companies that FCPA violations remain actionable under California’s Unfair Competition Law (UCL), which was enacted “to preserve fair business competition and protect consumers, prohibits unlawful, unfair, and fraudulent business acts and practices,” the legal alert states. It further warns individuals and companies that they could face enforcement actions for violations of the UCL, “including actions predicated on FCPA violations,” punishable by civil penalties, restitution, disgorgement, and injunctive relief.
“Accordingly, businesses should continue to maintain rigorous internal accounting controls and to ensure that they and their agents do not offer or pay anything of value to foreign officials to obtain or retain business,” the legal alert concludes.
On March 20, three European enforcement authorities – the U.K. Serious Fraud Office, France’s Parquet National Financier, and the Office of the Attorney General of Switzerland – announced the establishment of a newly created International Anti-Corruption Prosecutorial Taskforce, with the aim of strengthening collaboration to tackle international bribery and corruption. This serves as a reminder that the United States is not an island in itself when it comes to anti-corruption enforcement.
Why the silence?
California standing up to what is right and just by pronouncing where it stands on bribery and corruption is commendable. But the bigger question is, why are other state Attorneys General remaining silent so far? Why is California the only state to publicly remind businesses of their responsibility to act legally?
If the response to that question is, “Well, businesses already know bribery and corruption is illegal, and that they shouldn’t engage in it,” the wider point is being missed that this is a time when state AGs should be standing up, not standing down, not standing silently.
The same is true for business leaders – that now is as critical a time as any for senior leaders to not only vocally champion the role of their chief ethics and compliance officers, but walk the talk.
As the California legal alert stresses, yes, this is a time to maintain robust and consistent anti-corruption compliance and internal accounting controls. But check-the-box compliances processes only go so far and are vulnerable to the whims of regulators, while standing up for what is right and just will forever withstand the test of time.
Fighting foreign corruption
Currenting being enforced or not, the FCPA provides a foundation for ethical and compliant behavior. To learn more about how NAVEX can help your company stay compliant, click the button below.
