Bribing Because FCPA Enforcement Is Paused: US companies will be the first to complain about it

The recent executive order pausing the enforcement of the Foreign Corrupt Practices Act (FCPA) in the United States may appear to ease regulatory burdens and enhance American business competitiveness in the short term. However, from a European perspective, this move is not only short-sighted but also potentially damaging to global efforts in combating corruption. The European Union and its member states have long championed ethical business practices, transparency, and the rule of law.

The Global Implications of Weakening FCPA Enforcement

The FCPA has been a crucial component of international anti-corruption efforts, influencing legislation such as the UK Bribery Act, the OECD Anti-Bribery Convention, and the EU’s anti-corruption directives. Europe has remained at the forefront of promoting corporate integrity, with stringent regulations such as the EU Whistleblower Directive and the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), which require businesses to uphold ethical conduct throughout their supply chains.

By pausing enforcement, the U.S. risks not only damaging its own business reputation but also creating an unlevel playing field where companies from jurisdictions with weaker anti-corruption laws may gain unfair advantages. European regulators and multinational corporations have spent decades building robust compliance structures, ensuring that corruption is neither a necessary nor an acceptable part of doing business. A retreat from enforcement by the U.S. does not reduce corruption risks; it simply shifts the burden onto other international authorities.

For US Companies: Short-term Gain and Long-term Loss

At first glance, it may seem that U.S. companies have gained an advantage due to this policy shift. However, in reality, businesses from other countries—many of which have long operated in environments where bribery is more commonplace—will likely exploit this situation even more effectively. Consequently, instead of gaining a competitive edge, U.S. firms could find themselves at a disadvantage, losing deals to companies that have mastered navigating corrupt systems. It is only a matter of time before these U.S. businesses begin to complain about the unintended consequences of this regulatory rollback.

Increased Risk Exposure and Legal Uncertainty

Moreover, European enforcement agencies, such as the UK Serious Fraud Office (SFO) and the French Parquet National Financier (PNF), have demonstrated their willingness to take action against corruption, even in cases involving foreign companies. The risk of European-led investigations and penalties for non-compliant businesses may rise if U.S. enforcement declines. This creates an environment where American businesses face increased scrutiny abroad, despite relaxed domestic policies.

The Inevitable Return of Enforcement

Even if FCPA enforcement remains on hold under the current U.S. administration, future administrations are likely to reinstate or even strengthen anti-corruption measures. European firms that engage with U.S. partners during this period must remain cautious, as regulatory rollbacks are often temporary. Any misconduct that occurs under weakened enforcement could later be subject to retroactive investigations and penalties once compliance priorities shift. European businesses that maintain stringent anti-corruption policies will be better positioned to avoid legal and financial repercussions in the future.

Conclusion: Compliance Remains Essential Despite U.S. Policy Shifts

While the U.S. may be shifting its focus away from FCPA enforcement, this does not mean that bribery is now permissible. Companies operating internationally must still comply with numerous anti-corruption regulations, including the UK Bribery Act, the OECD Anti-Bribery Convention, and EU directives. These frameworks remain robust, and enforcement continues outside the U.S. Firms that assume a relaxed approach to compliance due to the temporary pause in FCPA enforcement may find themselves facing serious legal consequences elsewhere.

The recently released Transparency International Corruption Perceptions Index (TI CPI) makes it clear that corruption remains a major global concern. The fight against bribery and unethical business practices is far from over, and the data underscores the need for continued vigilance and strong enforcement mechanisms worldwide.

Governments and regulators outside the U.S. must now take proactive steps to counteract the impact of this shift. Ensuring strict enforcement of anti-bribery laws at national and international levels will help prevent any erosion of ethical business standards. Stronger cross-border cooperation, enhanced regulatory oversight, and coordinated enforcement actions will be crucial in maintaining global business integrity.

Rather than seeing this as an opportunity for unethical practices, companies should reaffirm their commitment to compliance and ethical business conduct. Long-term sustainability, trust, and international market access depend on upholding strong anti-corruption principles, regardless of changes in U.S. policy.