Federal Corrupt Practices Act . . . Paused
Executive considers loosening enforcement to permit US companies to operate more freely internationally . . . even if it means potentially engaging in bribery
Well, this is going to be interesting . . .
President Trump signed an executive order pausing enforcement of the Foreign Corrupt Practices Act ("FCPA"), saying it puts American companies at a disadvantage. The law, dating back to 1977, makes it illegal for US companies to bribe foreign government officials to score or keep business. The order directs the Justice Department to come up with revised enforcement guidelines, with the White House saying that the current rules bar US companies from behavior that’s common among international competitors.
Many commercial agreements include significant provisions requiring compliance with the FCPA. These likely won't change, just yet. It is still law and it appears it will remain law but possibly with greater flexibility due to revised policy on enforcement. Of course, Congress (or the courts) have the power to actually repeal, modify or invalidate the FCPA. Arguably, this cannot be done by Executive Order. However, the President can halt enforcement. The times, they are a changing . . .
Should US companies be permitted to offer bribes and facilitation payments abroad to obtain business or gain a business advantage if it is common practice in the target jurisdiction? What if it is not common practice, how will we tell the difference? Is bribery ok just because someone else does it?
Post below your thoughts on whether enforcement of the FCPA should be curtailed (or at lease loosened)? What are the ethical impacts to how we conduct business both home and abroad? What impact will such a change have both on contracting and how business is conducted internationally?