THE COMPLIANCE CHILL: WILL TRUMP’S FCPA PAUSE LEAD TO A SUPTECH SLOWDOWN – OR A QUIET RETHINK?
The Foreign Corrupt Practices Act (FCPA) has long been a cornerstone of US anti-bribery enforcement by the Department of Justice (DOJ). However, on 10 February 2025, President Trump issued an executive order (EO) that paused new FCPA investigations and enforcement actions for a 180-day period during which the US attorney general will review the guidelines and policies that govern FCPA enforcement.
This six-month pause on FCPA enforcement introduces a new dynamic into the regulatory landscape. This policy shift has significant implications for the development and deployment of supervisory technology or ‘SupTech’ solutions into companies’ compliance efforts. SupTech refers to the use of advanced technologies, such as machine learning and natural language processing, to enhance regulatory compliance and supervision.
SupTech technologies can process large amounts of data in real-time, which can provide both the company (as well as regulatory bodies) with immediate insights into any potential issues. SupTech is typically used in addition to traditional compliance methods (for example, manual reporting, on-site inspections and audits, document reviews, questionnaires and other labour-intensive, reactive monitoring processes).
The pause in FCPA enforcement may cause companies to consider reducing investments into SupTech solutions focused on anti-bribery compliance monitoring and to focus those efforts elsewhere. However, the underlying risks of bribery and corruption remain, despite the FCPA enforcement pause.
For example, companies face legal risks under legal regimes outside the US, and may be subject to future enforcement in the US, particularly under a different administration. Beyond that, companies engaging in bribery and corruption could face financial risks stemming from increased costs and loss of business, reputational risks if the company is associated with corruption, and potential operational risks if the company is ultimately subject to investigation and regulatory scrutiny.
Apr-Jun 2025 issue
Skadden, Arps, Slate, Meagher & Flom LLP