The President of the United States has criticized a federal law that aims to prevent corruption among multinational corporations, asserting that it places American businesses at a disadvantage.
The Foreign Corrupt Practices Act prohibits firms operating within the U.S. from bribing foreign government officials to secure contracts. Enacted in 1977, the law has seen intensified enforcement since 2005, targeting corporate bribery in nations where such practices are prevalent.
The President’s concerns come in light of recent allegations against Gautam Adani, an Indian business leader accused of bribing officials in India, with his company refuting these claims as unfounded.
Prominent corporations like Siemens, Ericsson, and Deere have faced severe penalties under this legislation. In a notable case from 2020, a financial institution settled for over $2.9 billion related to a bribery scandal involving its Malaysian branch.
The administration’s recent executive order emphasized that the law can be detrimental to U.S. interests, stating that its enforcement hinders crucial foreign policy goals. Consequently, federal authorities are prohibited from launching new investigations under the act for a period of 180 days, allowing for a review of ongoing cases to ensure the law’s application is appropriately bounded.
The order also tasks the attorney general with developing new enforcement guidelines that aim to enhance American competitiveness while ensuring effective use of federal resources.
As global business dynamics have evolved, enforcement actions under the act have dramatically increased, with the Justice Department and Securities and Exchange Commission initiating approximately 30 criminal cases last year, compared to just two in 2004.
The President has voiced his frustrations over the law, arguing that it places U.S. companies at a competitive disadvantage in international markets. In earlier discussions, he indicated that the law was “so unfair” to American firms and sought to explore ways to amend it during his previous term.
