FCPA Foreign Bribery Defense

The Foreign Corrupt Practices Act was signed into law in 1977, the product of a post-Watergate Congress that discovered American corporations had been bribing foreign officials on a scale that embarrassed even the participants. For forty-seven years, the statute operated under a bipartisan consensus that foreign bribery was bad for markets. Then, on February 10, 2025, the President signed an executive order directing the Attorney General to stop enforcing it.

The pause lasted four months. The enforcement apparatus is operational again. But the terrain has changed in ways that are not yet legible to most practitioners, and certainly not to the executives who will receive their target letters in the next fiscal year.

The Pause Did Not Produce Immunity

On February 10, 2025, Executive Order 14209 directed the Attorney General to cease all new FCPA investigations and review every pending matter against the stated priority of protecting American economic interests abroad. Prosecutors in the DOJ Fraud Section were instructed to suspend new case initiations. The order read as a concession to the business lobby. It was received by some commentators as an extinction event for FCPA enforcement.

It was neither.

On June 9, 2025, the Department issued revised FCPA Guidelines that lifted the suspension and recalibrated enforcement toward four categories of conduct: bribery schemes that facilitate cartels and transnational criminal organizations, schemes that undermine the competitiveness of American companies, corruption in defense and intelligence sectors, and misconduct bearing what the Guidelines call “strong indicia of corrupt intent.” The language is new. The prosecutorial discretion is old. The government has not relinquished the statute. It has narrowed the aperture through which it aims.

And the first shot came in November. Comunicaciones Celulares S.A., a Millicom subsidiary operating in Guatemala, entered a deferred prosecution agreement involving $60 million in criminal penalties and $58.2 million in forfeiture. The admitted conduct: systematic cash payments to Guatemalan legislators to secure favorable telecommunications legislation. The DOJ highlighted the scheme’s connection to narcotrafficking corridors. That emphasis was not incidental.

Individual Exposure Has Not Diminished

The recalibration of corporate enforcement has been reported with a certain relief in boardrooms. The reporting has been imprecise. The new Guidelines expressly prioritize cases involving “strong indicia of corrupt intent tied to particular individuals.” The word “individuals” is doing considerable work in that sentence.

In 2024, the DOJ charged nineteen individual defendants in FCPA matters. Eight were executives at major public companies. The Adani Green Energy indictment alleged a $250 million bribery scheme orchestrated by Gautam Adani, his nephew, and their co-executive. The Smartmatic prosecution charged three senior officers with paying approximately $1 million to Philippine election officials. Deepak Sharma, a former executive at an AAR subsidiary, pleaded guilty to conspiracy to violate the anti-bribery provisions. Each case involved a person who, at the time of the conduct, occupied a title that suggested authority and presumably counsel.

In 2025, three individuals were tried and convicted for FCPA violations. The number is smaller. The sentences are not. Manuel Chang, the former Finance Minister of Mozambique, received over eight years for accepting $7 million in bribes. Carlos Polit Faggioni, the former Comptroller General of Ecuador, received ten years. Senator Robert Menendez received eleven.

Five years is the statutory maximum for an anti-bribery violation. Twenty years attaches to the books-and-records provisions. When the government combines an FCPA charge with money laundering or conspiracy, the arithmetic becomes unkind.

What the Statute Prohibits, and What It Permits

Section 78dd of the Exchange Act prohibits the payment of anything of value to a foreign official for the purpose of obtaining or retaining business. The prohibition extends to issuers, domestic concerns, and any person who causes an act in furtherance of a corrupt payment to occur within the territory of the United States. The jurisdictional hook is broad. A wire transfer routed through a New York correspondent bank is sufficient. A single email is sufficient. The Act does not require that the payment succeed, only that it was made with corrupt intent.

Two affirmative defenses exist, and both are narrow. The first: that the payment was lawful under the written laws of the foreign country. This defense is invoked with regularity and succeeds almost never. The written laws of the country in question rarely authorize the specific payment at issue, regardless of what the local practice might tolerate. The second: that the payment constituted a reasonable and bona fide expenditure related to the promotion of products or the execution of a contract. This is the dinner defense. It applies to meals, travel, and entertainment that bear a legitimate business relationship to the underlying transaction. It does not apply to a consulting contract routed through a shell company in the British Virgin Islands.

The distinction between a facilitating payment and a bribe remains operative in the statute, though the 2025 Guidelines describe “routine business practices” and “de minimis or low-dollar, generally accepted business courtesies” as conduct warranting reduced prosecutorial attention. This is not an exemption. It is a signal of allocative priority.

One should treat signals from the Department of Justice with the same confidence one extends to weather forecasts issued four months in advance.

Compliance Programs Now Carry Dispositive Weight

The revised Corporate Enforcement Policy makes explicit what was implicit for a decade: a company that self-discloses, cooperates, and remediates can receive a declination. The Comcel resolution demonstrated the formula. Millicom voluntarily disclosed the Guatemalan bribery. It terminated involved personnel. It expanded its compliance headcount by 800 percent. It adopted an ephemeral messaging policy. It implemented continuous monitoring and data analytics. The government rewarded these measures with a 50 percent reduction from the bottom of the Sentencing Guidelines range and a two-year DPA term, shorter than the typical three.

For the individual executive, this creates a structural problem that defense counsel must identify early. The company’s interest in obtaining a declination or favorable DPA may diverge from the executive’s interest in avoiding prosecution. The company will cooperate. The company will produce documents. The company will identify the individuals responsible. The individual who believes the company’s lawyers represent a shared interest will discover the error at the proffer session.

Separate counsel is not a luxury in FCPA matters. It is a precondition of rational defense.

The Cognizant Dismissal Is Not Precedent

On April 2, 2025, prosecutors moved to dismiss the charges against Gordon Coburn and Steven Schwartz, former executives of Cognizant Technology Solutions, who had been indicted in 2019 for authorizing a $3.5 million bribe to an Indian government official to secure a construction permit. The motion cited the FCPA Pause Order and stated that “further prosecution is not in the interests of the United States at this time.” The case had been pending for six years.

Some observers read the Cognizant dismissal as evidence that the enforcement pause would produce a general amnesty for pre-existing cases. The subsequent indictment of Smartmatic and the Comcel DPA have corrected that reading. The Department dismissed Cognizant because the case fit poorly within the new prioritization framework: a construction permit bribe in India, unconnected to cartels, national security, or strategic infrastructure. The conduct that the revised Guidelines target, corruption in defense sectors, schemes involving transnational criminal organizations, sophisticated concealment, remains within the prosecutorial appetite.

Selective enforcement is still enforcement.

The Defense Begins Before the Investigation

Most FCPA investigations begin with one of three triggers: a whistleblower report to the SEC, a voluntary self-disclosure by the company, or a referral from a foreign law enforcement authority. The SEC whistleblower program paid $255 million in awards in fiscal year 2024. The incentive structure is not subtle. An employee with knowledge of a foreign bribery scheme can calculate the financial return of reporting it. They often do.

Once an investigation opens, the company enters a period of triage that will determine the outcome for every individual involved. Internal investigations are conducted by law firms retained by the audit committee. Those lawyers report to the board. They do not report to the vice president of international operations who authorized the payment.

We have represented executives who learned of the internal investigation from a colleague, and executives who learned of it from their own lawyers after retaining separate counsel at our recommendation. The second group possessed something the first did not: a defense architecture that existed before the government’s case was assembled.

Pre-indictment engagement in FCPA matters permits advocacy that is unavailable after charges are filed. Presentations to the Fraud Section. Contextualization of payments that, in isolation, appear corrupt but within the commercial reality of the region in question reflect something more ambiguous. The identification of exculpatory documents before they are interpreted by a paralegal who has never been to Lagos or Guatemala City or Jakarta. The government’s theory hardens with time. The window for intervention narrows at the same rate.

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The Contradiction at the Center of Reform

The 2025 recalibration of FCPA enforcement contains a tension that has not been resolved. The stated purpose is to reduce burdens on American companies competing abroad. The operational effect is to concentrate prosecutorial resources on a smaller number of cases with greater severity. The government will bring fewer FCPA actions. The actions it brings will be larger, more complex, and directed at individuals whose conduct intersects with the enforcement priorities the administration has identified.

This is not a relaxation. It is a reallocation.

For the executive operating in a sector the Guidelines have designated, defense, intelligence, critical infrastructure, energy, telecommunications, the exposure has not decreased. The number of prosecutors in the Fraud Section has not decreased. The penalty structure has not been altered. The accounting provisions, which carry a twenty-year maximum and do not require proof of a corrupt payment, remain intact. The SEC, which was not subject to the executive order, continues to bring civil enforcement actions under its own authority.

Exposure to FCPA liability is measured not by the political direction of a given administration but by the structure of the statute itself, the breadth of the jurisdictional hook, and the severity of the sentencing framework. These have not changed.

The Situation Requires Specificity

An FCPA investigation is not a compliance exercise. It is a criminal matter carrying imprisonment, forfeiture, and the destruction of professional standing. The defense of such matters requires counsel who understand the DOJ Fraud Section’s methodology, the SEC’s parallel enforcement authority, the interaction between the FCPA and the money laundering statutes, and the practical realities of conducting investigations across multiple jurisdictions where the evidence, the witnesses, and the relevant customs reside in places the government has never visited.

We have defended FCPA matters involving payments in South America, West Africa, Southeast Asia, and Eastern Europe. The patterns recur. The company cooperates. The individual is exposed. The question of intent turns on documents that were drafted in a language the jury does not speak, describing transactions that occurred in a regulatory environment the jury has never encountered.

The first consultation with this office is an assessment of the exposure, the government’s probable theory, and the available defenses, conducted with the precision the situation demands. FCPA penalties are severe. The window for effective intervention is finite. The statute has survived its first suspension. It will survive whatever comes next.