FCPA Enforcement under the Trump Administration: No “Piling On,” but Otherwise Business as Usual
In 2012, Donald Trump called the Foreign Corrupt Practices Act (“FCPA”) “ridiculous” and a “horrible law” that made it more difficult for U.S. companies to compete abroad.1 While President Trump’s private thoughts on the FCPA may not have changed, reportedly telling then-Secretary of State Rex Tillerson in February 2017 that the FCPA unfairly penalizes American businesses,2 his administration has continued to enforce it at rates comparable to the Obama administration and has provided incentives for companies to comply with the FCPA. Thus, as the numbers below demonstrate, companies doing business outside of the United States should not expect any relief from the Department of Justice’s (“DOJ”) and the Securities and Exchange Commission’s (“SEC”) vigorous enforcement efforts as a result of the president’s reported personal views.
Enforcement under the Trump Administration
In 2017, the first year of Trump’s presidency, the DOJ brought 27 FCPA enforcement actions and the SEC brought eight.3 So far, in 2018, the DOJ has brought nine such actions, while the SEC has brought four. Id. While the number of SEC actions brought in 2017 and anticipated for 2018 is far below the number brought during the final year of the Obama administration, it is comparable to the number brought in 2014 and 2015 (eight and 11, respectively). Id. Furthermore, the 27 actions brought by Trump’s DOJ in 2017 matches the 27 brought by Obama’s DOJ in 2016. Id. Even if the DOJ is on pace to bring fewer enforcement actions this year, it likely will still bring more than it did in 2014 and 2015 under President Obama. Id. Furthermore, in 2018, the DOJ and SEC already have settled FCPA enforcement actions for more than $923 million, compared to the $934 million in fines collected during the entirety of 2017. Id. In sum, the Trump administration has continued to enforce the FCPA at a rate comparable to the Obama administration.
DOJ’s New “Anti-Piling On” Policy to Encourage Corporate Compliance with the FCPA
In early May 2018, Deputy Attorney General Rod Rosenstein announced a new internal DOJ policy aimed at coordinating with other enforcement agencies to prevent imposing multiple penalties for the same conduct.4 One of the policy’s goals is to provide “greater transparency and consistency in corporate enforcement.” Id. In announcing the new “anti-piling on” policy, Rosenstein stated that the DOJ “want[s] companies and their counsel to promptly report suspected crimes, and … want[s] them to expeditiously negotiate reasonable resolutions.” Id.
There are four aspects to the policy. First, DOJ attorneys cannot invoke the threat of criminal prosecution solely to gain leverage in negotiating a settlement in a civil enforcement action. Id.
Second, DOJ attorneys are directed to coordinate with one another to avoid disproportionate punishment, which may involve “crediting and apportionment of financial fines, forfeitures, and penalties.” Id. Third, DOJ attorneys are encouraged to coordinate with other federal, state, local, or foreign enforcement authorities seeking to resolve a case with a company for the same misconduct. Id. Finally, DOJ attorneys should look at the following factors in determining whether multiple penalties serve the interests of justice: the egregiousness of the wrongdoing, statutory requirements regarding penalties, the risk of delay in finalizing a resolution, and the adequacy and timeliness of a company’s disclosures and cooperation with the DOJ. Id.
Overall, while the Trump administration has established new policies aimed at increasing FCPA compliance, such as the new “anti-piling on” policy and the FCPA Corporate Enforcement Policy,5 it has not hesitated to bring enforcement actions when necessary. – ©2018 BLANK ROME LLP
- Jim Zarroli, “Trump Used to Disparage an Anti-Bribery Law; Will He Enforce It Now?,” NPR (Nov. 8, 2017), available at npr.org/2017/11/08/561059555/trump-used-to-disparage-an-anti-bribery-law-will-he-enforce-it-now.
- Dexter Filkins, “Rex Tillerson at the Breaking Point: Will Donald Trump Let the Secretary of State Do His Job?,” The New Yorker (Oct. 16, 2017), available at newyorker.com/magazine/2017/10/16/rex-tillerson-at-the-breaking-point.
- Victoria Graham, “Anti-Bribery Enforcement Remains Steady Under Trump,” Bloomberg Law (June 20, 2018).
- Rod J. Rosenstein, Deputy Attorney General, Department of Justice, Remarks at the American Conference Institute’s 20th Anniversary New York Conference on the Foreign Corrupt Practices Act (May 9, 2018), available at justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-remarks-american-conference-institutes.
- DOJ Incorporates FCPA Pilot Program into U.S. Attorneys’ Manual Providing Permanent Incentives for Strong FCPA Compliance,” Blank Rome Alert (Dec. 2017), available at blankrome.com/publications/doj-incorporates-fcpa-pilot-program-us-attorneys-manual-providing-permanent-incentives.