Increased FCPA Enforcement Expected under Biden and AG Garland
The recent trend towards increasing enforcement of anti-bribery provisions of the FCPA is expected to continue or even accelerate under the new Biden administration.
The 1977 Foreign Corrupt Practices Act (or “FCPA”) prohibits people and companies in the U.S. from paying bribes to foreign officials to support their business interests. The various provisions of the FCPA are enforced civilly by the Securities and Exchange Commission (SEC) and criminally by a special unit within the Fraud Division of the Department of Justice (DOJ). For the first two decades of its existence, enforcement actions under the FCPA were vanishingly rare, but in recent years they have become substantially more common, with both 2016 and 2019 seeing over 50 such actions filed. In addition to being more frequent, these actions have also become more costly for the targeted entities, with the average amount of resulting sanctions rising to an all-time-high of $447,171,008 in 2020.
This pattern is likely to persist under the new presidential administration. On the campaign trail, then-candidate Biden identified global corruption as a “core national security interest” and pledged reform of illicit international trade practices. Since his assumption of the presidency, Biden’s nominations for key leadership roles at the DOJ and SEC have reflected a continuing commitment to that goal.
Heading up the DOJ will be recently-confirmed Attorney General Merrick Garland, who spent many years early in his career as an Assistant U.S. Attorney prosecuting fraud and corruption cases. Recent changes in the FCPA unit itself also seem to signal its increase in priority to the DOJ. The anti-bribery unit now comprises a record 39 prosecutors, including at least one high-profile new-hire with corporate monitoring experience.
To lead the SEC, President Biden has tapped Gary Gensler, the former Obama-era head of the Commodity Futures Trading Commission (CFTC). Gensler is expected to bring an aggressive approach towards enforcement, and his prior connection with the CFTC may also be an indicator of increasing cooperation between the two agencies. The CFTC completed its first foreign corruption case just last year with the December settlement agreement with Vitol, Inc, and the agency has publicly announced its intention to continue focusing on such parallel enforcement actions with the DOJ and the SEC.
These developments all suggest that the Biden administration has every intention of continuing to increase FCPA enforcement across the various regulatory agencies. If you or someone you know is involved in an FCPA investigation, contact our experienced team of federal criminal defense attorneys for assistance.
Kate is a criminal defense lawyer with an impressive record of “not guilty” verdicts and dismissals in serious criminal cases.