What's Happening?
The U.S. Department of Justice (DOJ) has resumed enforcement of the Foreign Corrupt Practices Act (FCPA) following a pause initiated by Executive Order 14209 on February 10, 2025. This pause was intended
to allow the DOJ to reevaluate its enforcement strategy with a focus on national security. The new guidelines, issued by U.S. Deputy Attorney General Todd Blanche on June 9, 2025, prioritize cases involving drug cartels, transnational criminal organizations, and corruption affecting U.S. strategic interests. The DOJ's revised approach is exemplified by the indictment of Smartmatic and the deferred prosecution agreement with Comcel/Millicom. Smartmatic was indicted for allegedly paying over $1 million in bribes to secure business from the Philippine Commission on Elections, while Comcel/Millicom reached an agreement over improper payments to Guatemalan officials. These cases illustrate the DOJ's focus on serious corruption involving substantial payments and sophisticated concealment tactics.
Why It's Important?
The DOJ's renewed focus on FCPA enforcement with a national security lens marks a significant shift in U.S. anti-corruption policy. By targeting cases that pose a threat to national security, the DOJ aims to protect U.S. interests and critical infrastructure. This approach could lead to increased scrutiny of industries related to national security, such as critical technologies and regions affected by drug cartel activity. Companies operating in these sectors may face heightened enforcement actions and are advised to reassess their compliance programs. The DOJ's emphasis on voluntary self-disclosure and cooperation suggests that companies that proactively report misconduct may receive more favorable outcomes. However, the absence of self-disclosure in the Smartmatic case indicates that the DOJ is willing to pursue litigation in serious cases, potentially leading to more contested trials.
What's Next?
The DOJ plans to release a unified Corporate Enforcement Policy, which will provide a comprehensive framework for handling corporate misconduct across all criminal matters. This policy is expected to offer greater transparency and certainty for companies regarding voluntary self-disclosure, cooperation, and remediation. Companies are encouraged to enhance their compliance programs to detect and report issues early, as timely self-disclosure can significantly influence enforcement outcomes. The DOJ's focus on national security-related corruption is likely to continue, with increased attention on industries and regions that pose strategic risks to the U.S.
Beyond the Headlines
The DOJ's revised FCPA enforcement strategy reflects broader geopolitical considerations, as it aligns anti-corruption efforts with national security priorities. This approach may lead to increased tensions with foreign governments and companies involved in U.S. enforcement actions. Additionally, the focus on sophisticated concealment tactics and substantial payments highlights the DOJ's intent to tackle complex corruption schemes that could undermine U.S. interests. The Smartmatic case, in particular, underscores the potential political implications of FCPA enforcement, as the company has accused prosecutors of being influenced by powerful interests. This case may serve as a litmus test for the DOJ's ability to navigate politically sensitive corruption cases under the new guidelines.
