In the first month since the inauguration, the Trump administration issued a series of executive orders and memoranda that direct the U.S. Department of Justice (DOJ) to pause enforcement under the Foreign Corrupt Practices Act (FCPA) and that put a strong emphasis on fighting cartels and transnational criminal organisations (TCO). While the directives clearly represent a dramatic break from past DOJ priorities and several issues remain as "known unknowns," it bears emphasizing that they do not change the validity and enforceability of the underlying laws, including the FCPA, sanctions, export controls and terrorism offenses.

New FCPA investigations and enforcement on pause for 180 days

On 10 February 2025, U.S. President Donald Trump signed an executive order titled "Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security" (FCPA EO). The order directs the DOJ to pause new FCPA investigations and enforcement actions and issue new enforcement guidelines that take into consideration US national security and the competitiveness of US companies abroad. The pause is effective for 180 days, extendable by another 180 days at the discretion of the newly appointed Attorney General (AG) Pam Bondi.

The order further mandates the AG to review all existing FCPA investigations or enforcement actions and take appropriate action on matters that, among other things, "preserve Presidential foreign policy prerogatives". The executive order and an accompanying fact sheet argue that "FCPA overenforcement" has disadvantaged US companies in international markets by prohibiting practices “common among international competitors", and that the President Trump seeks to prioritise American economic and security interests and ensure that "US businesses have the tools to succeed globally".

Focus on "total elimination" of drug cartels and TCOs

The FCPA EO follows a series of other executive orders and memoranda by AG Bondi issued shortly after President Trump's inauguration. These orders and memoranda clearly reflected the Trump administration's intention to shift away from previous corporate enforcement priorities such as the FCPA, in favour of focusing on combatting transnational organised crime and drug cartels, aligning with President Trump's priority of "keeping America safe". Some of the key changes expressed in these executive orders and AG memoranda are discussed below.

Extended reach of US enforcement in cases involving drug cartels and TCOs

President Trump's Executive Order (Cartel EO) of 20 January 2025 required the Secretary of State, along with other agencies, to recommend the designation of specific cartels and organisations as Foreign Terrorist Organizations (FTOs) or Specifically Designated Global Terrorists (SDGTs). On 20 February 2025, the State Department designated eight organisations as both FTOs and SDGTs.

Most of these organisations were already sanctioned parties, including Specially Designated Nationals (SDNs) under the U.S. Department of Treasury's Office of Foreign Asset Control's (OFAC) regulations. However, an FTO designation triggers another standalone criminal statute (18 U.S.C. § 2339A), which implicates companies and individuals for knowingly providing "material support" to FTOs. This is a sanction that does not currently exist under a non-FTO SDN designation. "Material support" is broadly defined as providing an FTO with any property (tangible or intangible) or services, including currency, financial services, lodging, personnel and transportation. For example, paying fees to an FTO for protection or to operate in an area they control or selling them goods or services could lead to criminal investigation and prosecution.

The designation also allows the DOJ to extend its extraterritorial reach. The sanctions regime currently in place normally applies only to US persons or transactions in which US persons are involved in some way. In contrast, with an FTO designation, conduct by non-US person and not on US soil can also come under the DOJ's jurisdiction if the offence occurs in or affects interstate or foreign commerce or if the offender comes to the US after the offence. DOJ has previously charged foreign companies with knowingly providing material support to FTOs. In 2022, Lafarge S.A. and its Syrian subsidiary pleaded guilty to conspiring to provide material support to FTOs (the Islamic State of Iraq and al-Sham and the al-Nusrah Front) by paying them more than USD 6 million for protection and permission to operate a cement plant. Lafarge agreed to a USD 778 million fine.

Shift in DOJ's terrorism, sanctions and FCPA enforcement priorities

On 5 February 2025, AG Bondi issued two memoranda that further align the DOJ's enforcement priorities with the Cartel EO. To eliminate “bureaucratic impediments” to the “aggressive” prosecution of gangs and cartels, internal approval requirements have been suspended or modified for various charges, including those related to terrorism, the International Emergency Economic Powers Act (IEEPA), FCPA, money laundering and asset forfeiture, when associated with cartels and TCOs. This shift signifies a “decentralisation” of prosecutorial decisions in these matters, empowering the 94 U.S. Attorney’s Offices (USAOs) to pursue charges (including those involving corporate entities) without needing approval from the relevant units of the DOJ's Main Justice, such as the National Security Division (NSD) and the FCPA Unit within the Criminal Division.

The DOJ also disbanded the Corporate Enforcement Unit within the NSD and directed personnel from that unit to return to their previous posts. This represents a significant departure from the previous administration's approach to corporate sanctions and export controls enforcement, which had been bolstered by the addition of 25 new prosecutors to the NSD's Counterintelligence and Export Control Section and the appointment of the division’s first-ever Chief Counsel for Corporate Enforcement.

With regard to the FCPA, the FCPA Unit was instructed to prioritise investigations related to cartels and TCOs, and shift focus away from investigations and cases that do not involve such connections. However, these directives were issued before the FCPA EO, which suspended all new FCPA investigations and enforcement actions for 180 days. Consequently, it remains to be seen how the prioritisation of cartels and TCOs will be implemented in any new guidelines issued by the AG.

Reflections on the executive orders and AG memoranda

Overall, the speed at which the executive orders and AG memoranda have been issued leaves room for ambiguities around the future of FCPA enforcement, corporate criminal enforcement in national security matters, and civil enforcement. The long-term implications of the EO and the Bondi Memo remain uncertain for now, and more guidance from DOJ and civil enforcement agencies may be forthcoming in the coming months to further address outstanding questions. Below, we highlight the key observations and takeaways around the following: (i) the potential implications for the enforcement of non-US companies; (ii) the expectation of more enforcement in all matters where there is connection to cartels, focusing on Mexico and surrounding countries; and (iii) the unclear future enforcement for corporate defendants.

Implication for non-US companies

First, given the FCPA EO’s goal of “Putting America First” and allowing US companies to gain “strategic commercial advantages around the world,” the DOJ may, going forward, look to focus FCPA enforcement on non-US companies, particularly those operating in industries that the administration sees as a threat to US economic interests or relevant to US national security. It should be noted that, over the past decade, the majority of defendants in FCPA enforcement actions have been non-US companies and individuals. Of the top ten largest monetary recoveries by US authorities resulting from corporate FCPA enforcement actions, foreign companies account for eight. The FCPA EO's impact might therefore be to intensify an existing trend rather than to reverse course.

While the Cartel EO does not explicitly refer to protecting US companies and economic interests, the designation of cartels and TCOs as FTO will result in the extension of DOJ's jurisdictional reach over non-US companies with a remote nexus, as discussed above. This may result in more enforcement efforts being put in to pursue non-US companies suspected of providing material support to FTOs, compared to U.S. companies.

Increased risks for companies operating in Mexico and surrounding areas

With the DOJ's prioritisation of offences involving cartels and TCOs and their designation as FTOs and SDGTs, companies operating in Mexico and surrounding regions where those organisations are active (Venezuela, Colombia, Peru, Chile, Ecuador, Bolivia, El Salvador, Honduras, Guatemala and Brazil) will face heightened enforcement risks.

Companies should carefully examine their existing operations and business relationships in those regions to identify potential interactions with cartels, as well as associated individuals and businesses. This includes conducting enhanced due diligence over third parties, and evaluating due diligence policies and procedures to ensure that activities that may involve cartels are detected in a timely manner. In view of the broad scope of activities that may fall under the criminal offence of providing material support to FTOs, all relationships should be evaluated critically. For example, cartels may impose routine charges on companies for operating in certain areas or for providing passage or protection. Such payments are likely to face increased scrutiny and heightened exposure to US sanctions and FCPA enforcement.

Potential shift in corporate enforcement in the US

AG Bondi's memoranda are silent about the scope of the NSD's future corporate enforcement. On the one hand, the disbandment of the NSD's Corporate Enforcement Unit would seem to suggest deprioritisation of corporate enforcement in business-related national security cases such as sanctions and export controls violations. On the other hand, one of the primary goals of the FTO and SDGT designations and of the cutting of red-tape for USAOs in seeking terrorism and IEEPA charges appears to be to increase prosecutorial reach and caseloads. It is unclear whether such increase will also impact corporate defendants, or mostly individuals.

Civil enforcement remains unaffected by the executive orders and the AG's memoranda for now. The FCPA EO's instruction to pause FCPA enforcement is only directed at the DOJ and does not address the SEC, which has civil enforcement authority. Some insight may be gained from the AG's directive concerning cases under the Foreign Agents Registration Act, whereby the NSD was instructed to focus on "civil enforcement, regulatory initiatives, and public guidance.” While it is not known whether corporate enforcement will shift more generally from criminal to civil matters, we can expect further alignment of civil enforcement agencies' postures with the President's executive agenda, as implied in the Executive Order titled "Ensuring Accountability for All Agencies", issued on 18 February 2025. Among other things, this order mandates independent agencies including the SEC to consult, and coordinate policies and priorities, with the White House, and binds the agencies to the President's and AG's interpretation of the law.