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Shift In Foreign Corruption Policy Could Amplify Risk of Extortion for Global Businesses
The Trump administration’s shift in enforcement policy away from foreign corruption and towards the fight against Transnational Criminal Organizations (TCOs) such as drug cartels, a shift that adds a spate of new designations of cartels as terrorist groups, may reduce the immediate risk to global businesses of an FCPA prosecution based on alleged extortion payments.
However, the same shift raises new threats to those businesses under statutes, including the Anti-Terrorism Act (ATA), that prohibit engagement of any kind with terrorist organizations, do not recognize an extortion defense, and may give rise to civil as well as criminal liability.
Businesses operating in environments where they are subject to demands for “protection” payments or other extortionate threats must investigate carefully and maintain strong compliance programs to minimize prosecution and litigation risks.
Trump’s Enforcement Priorities
President Donald Trump has indicated his intent to use the ATA and related statutes in addition to existing tools to combat cartels and other TCOs, even while he has deprioritized FCPA enforcement. In one of his first actions after inauguration, President Trump signed an executive order directing the State Department to designate cartels and other TCOs as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). See, EO 14157 (Jan. 20, 2025).
On Feb. 20, 2025, the State Department designated eight TCOs, including organizations with significant operations in Mexico, Central America, and Venezuela, as FTOs and SDGTs pursuant to the Executive Order. 90 Fed. Reg. 10030 (Feb. 20, 2025).
On Feb. 5, Attorney General Pam Bondi issued a memorandum, “Total Elimination of Cartels and Transnational Criminal Organizations,” that directed the Department of Justice’s FCPA enforcement efforts to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs, and shift focus away from investigations and cases that do not involve such a connection.”
Five days later, Trump issued an executive order directing that the Department of Justice (DOJ) “cease initiation of any new FCPA investigations or enforcement actions, unless the attorney general determines that an individual exception should be made.” EO 14207 (Feb. 10, 2025). It appears likely that any exceptions granted by the attorney general will relate to cases with a connection to cartels or TCOs, particularly those that are subject to FTO/SDGT designation.
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