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Managing Partner @ JEDCA Law, P.A. (Boca Raton / Orlando, Florida) Business and Corporate Law, M&A, International Arbitration, Business Litigation in Florida, Intellectual Property, FCPA, Commercial Contracts.
The President of the United States issued an Executive Order on February 10, 2025, "Pausing Foreign Corrupt Practices Act Enforcement [FCPA] to Further American Economic and National Security." With over 20 years of experience assisting U.S. multinational companies in conducting business in Latin America and helping Latin American companies establish operations in the United States, I can attest firsthand that the broad and expansive interpretation, application, and enforcement of the FCPA have led to several significant impacts: ? (i) the closure of multiple U.S. companies’ operations in Latin America; ? (ii) preventing Latin American companies from even considering opening operations in the U.S., which could adversely affect their existing operations in Latin America; ? (iii) the creation of costly and complex corporate structures that compel U.S. companies to rely on overseas entities or intermediaries, significantly restricting their operations and practices, and sometimes forcing them to relocate outside the U.S. to grow their business; ? (iv) the establishment of large and costly compliance departments that have become impractical from a business perspective. The goal of the FCPA is noble and necessary.?Allowing U.S. or foreign companies to engage in corruption does not benefit the United States. However, an unreasonable interpretation and enforcement of the FCPA may pressure U.S. companies to reduce global operations or relocate their headquarters to cut compliance costs, which may not serve U.S. interests.? The Executive Order signed by the President on February 10, 2025, mandates the Attorney General to review the FCPA enforcement guidelines for 180 days (extendable for an additional 180 days), stating that no new FCPA investigations will be initiated during this period unless exceptions are made. Moreover, existing investigations will be examined and adjusted to align with appropriate enforcement boundaries, and new guidelines will be issued to bolster the President's authority in foreign affairs and prioritize American interests. The challenge, of course, is to strike the right balance and avoid enabling the development of the corrupt practices that the FCPA has long worked to prevent and penalize. It may be too early to determine whether this is good or bad news. However, if the objective is to assist U.S. companies in expanding their operations internationally while conducting business from the United States, and even to attract foreign companies to establish operations in the U.S., this Executive Order could represent a step in the right direction. We will wait and see. #FCPA #Business #Multinationals #Corruption #Latinamerica #DOJ #Compliance #Corporate #Law https://lnkd.in/eVjsU9eW