Analyzing the Attorney General’s FCPA Enforcement Shift

Key Takeaways

• On February 5, 2025, U.S. Attorney General Pam Bondi issued a directive (the “AG Directive”), announcing a “fundamental change” in the U.S. Department of Justice’s (DOJ) priorities and directing all federal prosecutors to work toward the “total elimination” of criminal cartels and transnational criminal organizations (TCOs).
• Among other changes, this directive requires the DOJ’s FCPA Unit to prioritize foreign bribery investigations with ties to cartels and TCOs and to “shift focus away” from more traditional FCPA enforcement.
• The AG Directive also gives autonomy to U.S. Attorney’s Offices to investigate and prosecute FCPA offenses involving cartels and TCOs without partnering with the DOJ’s FCPA Unit, which could result in an overall increase in FCPA enforcement.
• Depending on how the DOJ implements this directive, it has the potential to fundamentally change the FCPA corporate enforcement landscape.
• Despite what may be significant uncertainties concerning FCPA corporate enforcement in the years to come, companies should continue to maintain well-designed and adequately resourced anticorruption compliance programs.

Background on FCPA Enforcement

The Foreign Corrupt Practices Act (FCPA), enacted in 1977 after the Watergate scandal, was designed to combat international corruption and corporate bribery. Its two core provisions are straightforward: the antibribery provisions make it illegal to offer anything of value to foreign officials to secure or retain business, and the accounting provisions require U.S. issuers to maintain proper records and internal controls to prevent the concealment of illicit payments.

Over the past two decades, the enforcement of the FCPA against U.S. and foreign corporations has been a top DOJ priority that resulted in a considerable number of major enforcement actions. For example, during the first Trump Administration, the DOJ resolved approximately 30 corporate FCPA cases with associated monetary penalties totaling more than $14 billion. During the Biden Administration, the DOJ resolved 23 corporate FCPA cases with total penalties of more than $4 billion.

Because foreign corruption cases can involve politically sensitive issues that may implicate foreign relations, the DOJ centralized supervision of FCPA investigations and prosecutions in the FCPA Unit of the Criminal Division’s Fraud Section. As required by the DOJ’s Justice Manual, which applies to all components of the DOJ, including all U.S. Attorney’s Offices throughout the country, “investigations and prosecutions of alleged violations of the antibribery provisions of the FCPA . . . will be conducted by Trial Attorneys of the Fraud Section.” DOJ policy likewise required the Criminal Division’s “express authorization” before beginning any investigation or prosecution of alleged FCPA violations. Even the discovery of information involving a “possible” FCPA violation required all DOJ prosecutors to immediately notify the Criminal Division. The FCPA Unit has also closely coordinated with the U.S. Securities and Exchange Commission (SEC), which has authority to bring civil enforcement actions under the FCPA’s antibribery or accounting provisions against U.S. issuers and their officers, directors, employees or agents.

The AG Directive

The AG Directive shifts FCPA enforcement priorities to the fight against drug cartels while also expanding the autonomy of U.S. Attorney’s Offices to bring certain FCPA actions without the involvement of the FCPA Unit.

First, it instructs the FCPA Unit to prioritize investigations related to foreign bribery “that facilitate[] the criminal operations of Cartels and TCOs.” As a result, the AG Directive calls for “shift[ing] focus away from investigations and cases that do not involve such a connection.”

Second, for “all matters relating to foreign bribery associated with Cartels and TCOs,” the AG Directive suspends Justice Manual requirements that (1) the Criminal Division provide its “express authorization” for U.S. Attorney’s Offices’ FCPA investigations or prosecutions, and (2) FCPA Unit Trial Attorneys conduct such FCPA investigations and prosecutions. In contrast to the Justice Manual’s general requirement that the Fraud Section receive “immediate notification” of possible FCPA violations, the AG Directive calls for “24 hours’ advance notice” by a U.S. Attorney’s Office to the FCPA Unit in matters where the Office “inten[ds] to seek [FCPA] charges” related to cartels and TCOs. Notably, the AG Directive leaves undisturbed the FCPA Unit’s primary authority with respect to more traditional (albeit de-prioritized) corporate cases that lack connections to criminal cartels or TCOs.

In addition, the AG Directive disbands several key anticorruption-related initiatives, including Task Force KleptoCapture, further signaling a shift in the DOJ’s enforcement priorities away from more traditional foreign corruption and asset recovery cases and toward combating criminal cartels and TCOs.

Potential Impact on FCPA Investigations and Enforcement Priorities

While the AG Directive is squarely in line with the incoming administration’s focus on combatting criminal cartels and TCOs, its ultimate effect on FCPA enforcement remains to be seen. How the instruction to “shift focus away” from FCPA investigations and cases that do not involve a criminal cartel or TCO connection will be implemented by the FCPA Unit—and the extent of that shift—is not yet clear. Key areas of uncertainty include:

• Possible Revisions to the AG Directive. By its terms, the AG Directive only applies for 90 days and is subject to potential revision. Even if the AG Directive were to become permanent in its current form, this administration’s focus on battling drug cartels could become displaced by a future geopolitical crisis or focus, potentially triggering yet another redirection of FCPA enforcement resources.
• Ongoing Investigations May Continue. The DOJ may permit long-running, ongoing FCPA investigations of companies to continue and resolve.
• Increased Enforcement by U.S. Attorney’s Offices. Overall FCPA enforcement may increase because U.S. Attorney’s Offices are now able to independently investigate and prosecute FCPA cases involving criminal cartels and TCOs.
• Future Corporate Investigations “Connected” to Cartels. If DOJ prosecutors were to uncover any corporate misconduct during future probes of cartels and TCOs, such a connection could result in a priority corporate FCPA investigation and a potential corporate resolution.
• Possible Boost for FEPA Enforcement. The AG Directive may also prompt increased enforcement of the Foreign Extortion Prevention Act (FEPA), which makes it a crime for foreign officials to solicit or accept bribes. The DOJ may focus on foreign officials with ties to cartels or TCOs or use the statute’s expansive definition of “foreign official”—which includes “senior political figure”—to target cartel or TCO ringleaders.
• SEC Enforcement of the FCPA. The SEC, which has historically coordinated with the DOJ on FCPA enforcement, is not directly impacted by the AG Directive, but recent procedural changes that require a majority vote from SEC commissioners before initiating formal investigations—such as issuing subpoenas or compelling testimony—could result in less SEC enforcement of the FCPA.

Takeaways

It is not yet clear whether the AG Directive signals a permanent shift away from corporate FCPA enforcement or a temporary reallocation of resources to meet a top priority of the new administration. Even if corporate FCPA cases were to receive less emphasis for the time being, investigations related to cartels or TCOs could nonetheless reveal corporate misconduct. It is also possible that U.S. Attorney’s Offices, which now can investigate certain FCPA offenses independently, will drive an overall increase in FCPA enforcement.

Moreover, the statute of limitations for FCPA violations is five years and can be extended up to a total of eight years with tolling based on Mutual Legal Assistance Treaty requests. A temporary lull in FCPA corporate enforcement does not preclude future administrations from reviving dormant cases or investigating matters that occur during the current administration. Moreover, foreign prosecutors, many of whom have worked closely with the DOJ in recent years, will continue to pursue foreign bribery investigations and may even expand enforcement of foreign anticorruption laws to fill any perceived gap in FCPA enforcement. Companies should therefore continue to maintain robust antibribery compliance programs to mitigate both short- and long-term risks.