US President Donald Trump has ordered a pause in the enforcement of a federal law aimed at curbing corruption in multinational companies, saying it creates an uneven playing field for American firms.
The Foreign Corrupt Practices Act makes it illegal for companies that operate in the United States to pay foreign government officials to secure business deals. Though the law was enacted in 1977, federal authorities have enforced more aggressively it since around 2005, cracking down on bribery, especially in countries where it is a common business practice.
Trump has objected to the law, which has led to charges and huge fines against some of the world’s largest companies. In November, US prosecutors accused Gautam Adani, an Indian tycoon, of bribing Indian officials and charged him with fraud. His company has called those claims “baseless”.
Companies that have paid fines under the act include the engineering conglomerate Siemens, the Swedish telecommunications company Ericsson and, in a case in Thailand, the US farm and construction equipment maker Deere.
In 2020, the investment bank Goldman Sachs agreed to pay more than $2.9 billion to resolve charges that employees at its Malaysian subsidiary had paid $1 billion in bribes to foreign officials.
The law has been “abused in a manner that harms the interests of the United States”, Trump’s executive order signed on Monday said, adding that its enforcement was impeding foreign policy objectives.
The order bars federal authorities from starting any new investigations under the act or enforcing new actions for 180 days. The administration will also review existing investigations launched under the act, it said, to “restore proper bounds” on the law.
It also directs the attorney general to issue new guidance on how to enforce the act “that promotes American competitiveness and efficient use of federal law enforcement resources”.
Enforcement of the act has surged in the past two decades as business has become increasingly globalised. In 2004, there were only two criminal enforcement actions under the act. Last year, there were about 30 such actions by the Justice Department and the Securities and Exchange Commission.
Trump has been among the critics who have argued that the law’s reach has left American companies at a competitive disadvantage abroad. He said in a 2012 CNBC interview that “the world is laughing at us” for enforcing the law, and in 2017 he nominated Jay Clayton, a lawyer who had expressed scepticism about US antibribery policies, to run the SEC.
Trump wanted to strike down the law in his first term, according to the book A Very Stable Genius, by Washington Post reporters Philip Rucker and Carol Leonnig. They wrote that, in a 2017 briefing, Trump told then-Secretary of State Rex Tillerson that the law was “so unfair” to American companies.
Trump also told a policy adviser to draft an executive action to repeal the law, they wrote. But the adviser, Stephen Miller, responded that he was sceptical about that plan, and it ultimately did not come to fruition.
- This article originally appeared in The New York Times