The Trump administration has issued an executive order pausing enforcement of the Foreign Corrupt Practices Act (FCPA), a landmark anti-bribery law that has governed U.S. business conduct abroad since 1977. This decision has sparked debate in legal and business circles, with critics warning of ethical backsliding and proponents arguing that it levels the playing field for American businesses competing in foreign markets, particularly in Africa.

Summary of the Executive Order

The executive order directs the Department of Justice (DOJ) to suspend active enforcement of the FCPA. While the law itself remains intact, the agencies responsible for investigating and prosecuting violations will shift focus away from aggressive enforcement. The administration justifies this move by citing the need to ease regulatory burdens on U.S. companies and improve their ability to compete globally, especially in regions where corruption is often an unavoidable aspect of business dealings.

Concerns Raised by the Pause

Opponents of the executive order argue that suspending FCPA enforcement could embolden unethical practices, harm the U.S. reputation abroad, and weaken international anti-corruption efforts. Key concerns include:

• Erosion of Ethical Standards: Without the risk of prosecution, some companies may feel less restrained in engaging in corrupt practices.
• Damage to U.S. Credibility: The U.S. has long positioned itself as a global leader in anti-corruption efforts. A pullback could weaken its influence in international regulatory discussions.
• Increased Legal and Compliance Risks: While U.S. enforcement may be paused, companies remain subject to foreign anti-corruption laws, such as the UK Bribery Act and local African regulations. This creates uncertainty about compliance strategies.

The Case for a Competitive Advantage

Despite these concerns, the pause on FCPA enforcement could offer strategic advantages for American businesses, particularly in Africa:

• Leveling the Playing Field: U.S. companies have long faced a competitive disadvantage when bidding against firms from China, Russia, and other nations where bribery is often part of the business culture. The FCPA has made it harder for American businesses to secure contracts in countries where corruption is widespread.
• Greater Flexibility in Negotiations: Without the immediate threat of FCPA penalties, companies can engage more freely in markets where local “facilitation payments” or unofficial fees are an accepted part of business.
• Boosting Investment and Market Share: Africa is home to some of the world’s fastest-growing economies. Reducing regulatory constraints could encourage U.S. companies to expand their presence, leading to increased investment and job creation.

Impact on Legal Work for U.S. Companies in Africa

While some might assume that the pause in FCPA enforcement would reduce the need for legal counsel, the reality is more nuanced. The shift is likely to reshape—rather than eliminate—the demand for legal services in several key areas:

• Advisory and Risk Management: Companies will still need legal guidance on structuring transactions in ways that mitigate risks under international and local anti-bribery laws.
• Contract Structuring and Compliance: Even with reduced U.S. enforcement, businesses must navigate local regulations, requiring tailored compliance strategies and contractual safeguards.
• Defense Against Foreign Prosecutions: Without U.S. enforcement, companies may become more vulnerable to investigations from foreign regulatory bodies, necessitating specialized legal defense.

The Trump administration’s pause on FCPA enforcement is a bold move that could significantly alter the competitive landscape for U.S. businesses abroad. While critics warn of ethical pitfalls, the potential benefits—especially in Africa—include increased flexibility, a more level playing field, and greater economic opportunity. From a legal perspective, this shift is unlikely to reduce the need for expert counsel; rather, it will redefine the areas where legal support is most crucial. U.S. companies operating in Africa must remain vigilant, adapting to both local legal environments and shifting global compliance expectations.