What does Trump’s FCPA “pause” mean for Canadian businesses?

On February 10, President Donald Trump issued an executive order directing the US Attorney General (AG) to pause investigations and enforcement actions brought under the US Foreign Corrupt Practices Act (FCPA) for 180 days, subject to exceptions granted by the AG.¹

Our US colleagues have provided an overview of the executive order and its potential impact. This article provides context and considerations for Canadians subject to the Corruption of Foreign Public Officials Act, who may also be subject to the FCPA.

Background – the FCPA in context

The FCPA was enacted in 1977 to prohibit bribing foreign government officials, and has been the primary foreign anti-corruption law in the US. 

US prosecutors have historically given the FCPA an expansive interpretation. In 2021, the Biden administration announced countering corruption as a core US national security priority.² During this period, the US Department of Justice (DOJ) also pledged to increase enforcement resources and take a tough stance on corruption and corporate crime more broadly.

The 180-day “pause” suggests the current administration will re-evaluate its enforcement priorities. The president issued the executive order due to stated concerns the FCPA “has been systematically, and to a steadily increasing degree, stretched beyond proper bounds and abused in a manner that harms the interests of the United States.”

What is the legal impact of the executive order?

The 180-day pause requires the AG to “review in detail” all existing FCPA investigations and enforcement actions, alongside any policies and guidelines that guide implementation and enforcement of the FCPA. The pause itself does not change the substance of the legal obligations under the FCPA: companies and individuals are still prohibited from bribing foreign government officials. 

What does this mean for Canadian businesses? 

Although the AG’s review could alter the way the FCPA is administered, it does not mean the statute is no longer enforceable, nor does it lessen the anti-bribery and corruption risks faced by Canadian companies and financial institutions. 

FCPA enforcement risks remain

Although current investigations will be put on pause while the DOJ reviews past and existing actions and waits for the AG’s guidance on future matters, the FCPA remains a valid statute, and the AG can still authorize new investigations during the pause.³ The statute of limitations under the FCPA and other federal legislation targeting foreign corruption is five years or six years for certain offences.⁴

Furthermore, multiple federal regulators lie outside of the reach of the executive order, for now. For US-listed companies, the SEC – which is outside the scope of the executive order – also has civil enforcement authority over the FCPA.

Some commentators have predicted the DOJ’s shift in priorities could increase the enforcement risks for international companies with some degree of US operations. However, until the revised guidelines are released, it is too early to make any such predictions. Business and compliance leaders should continue to be vigilant to minimize their corruption risk around the world, keeping in mind that the extraterritorial reach of the FCPA can extend quite far in certain circumstances. 

Global enforcement of anti-corruption laws will continue 

Canada’s Corruption of Foreign Public Officials Act (CFPOA) remains alive and well and, unlike the FCPA, CFPOA offences are not subject to any limitation period, in line with other Canadian criminal offences.  

Even if US authorities curb enforcement of the FCPA in the short term, the reality is that foreign corruption is a global issue and non-US enforcement authorities – many of whom work collaboratively – will continue to investigate and prosecute bribery and corruption.  

A number of other countries in which Canadian businesses operate also have their own anti-corruption laws. For example, the UK Bribery Act contains an expansive jurisdictional hook and a broad “failure to prevent bribery” offence, which has resulted in multiple large deferred prosecution agreements.

Key takeaways 

President Trump’s executive order should not be taken as a signal to de-invest in corporate compliance programs or relax compliance mechanisms. To the contrary, companies should continue to be vigilant, while also re-examining their compliance policies to ensure their risk management processes effectively address the risks of potentially criminal conduct.

The authors would like to thank Madeline Heinke and Rachel McDonald, articling students, for their contribution to preparing this legal update.