U.S. suspends sanctions under the Foreign Corrupt Practices Act (FCPA): What does this mean for German companies?

US President Trump temporarily suspended the Foreign Corrupt Practices Act (FCPA) on February 10, 2025. With his corresponding executive order, he aims to strengthen the economic competitiveness of the USA and protect national security interests. This also has consequences for German companies.

Background: The FCPA

The Foreign Corrupt Practices Act (FCPA) is an anti-corruption law in the United States. It prohibits bribery of foreign officials by U.S. companies as well as all companies listed on U.S. stock exchanges or doing business in the U.S. German companies with a U.S. connection are subject to the FCPA and risk high penalties for violations. In addition, the FCPA places high compliance requirements on companies.

The Executive Order of 10 February 2025

The Executive Order of February 10, 2025 temporarily pauses the enforcement of the FCPA. It also orders a 180-day review of existing FCPA enforcement policies and procedures. During this time, no new FCPA investigations are to be initiated unless the Attorney General approves an exemption. Ongoing investigations are to be reviewed in detail to ensure that they comply with the new guidelines.

Previously, with the Executive Order of January 20, 2025 and the so-called "Bondi Memorandum" of February 5, 2025, the Trump administration had already limited the prosecution of corruption under the FCPA to certain international cartels and organizations that were qualified as "foreign terrorist organizations." The prosecution of cartels and transnational criminal organizations for terrorism and other serious crimes is to be intensified: U.S. prosecutors will be asked to bring the most "aggressive" and "comprehensive" charges that the law allows. In addition, the Bondi memo in particular emphasizes the need to remove bureaucratic hurdles in order to enable fast and effective prosecution measures. On the other hand, the prosecution of corruption under the FCPA has been limited to those cases that are related to cartels and terrorist organizations.

Risks and opportunities for German companies

For German companies, this ostensibly means a temporary relief from FCPA compliance requirements. However, the FCPA remains applicable law and thus the need to comply with international anti-corruption laws remains.

The suspension of FCPA enforcement also provides an opportunity for German companies to review and adapt their compliance programs. However, they should be particularly aware of the risks that have already arisen, are currently arising or may arise as a result of the change in US policy.

In particular, the classification as a foreign terrorist organization or transnational criminal organization can lead to new legal challenges. German companies operating in regions with appropriately classified associations should take increased due diligence measures to avoid unwanted associations. For example, an airline that transports members of an association classified as FTO as passengers may be in the crosshairs of the US judiciary in the future. The same applies, for example, to suppliers of chemicals to a drug cartel. The list can be extended almost at will.

German companies should therefore be very careful to ensure that they are not unintentionally involved in activities that could be seen as supporting these criminal organizations.

International reactions and enforcement

Although the U.S. is suspending FCPA enforcement for the time being, the international anti-corruption landscape remains active. Countries such as Germany and members of the OECD have announced that they will strengthen their own enforcement measures. German companies must therefore continue to ensure that they meet international compliance standards. Collaboration with international partners and compliance with global regulations remain critical to mitigate legal and reputational risks.

Practical note

German companies should review their internal compliance policies and procedures based on the current legal situation and adapt them if necessary. It is advisable to inform employees about the continuing compliance expectations and to provide appropriate training. In addition, companies should strengthen their due diligence measures, especially with regard to business partners in high-risk regions.