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The updated FCPA Enforcement Guidelines also make clear that the DOJ is resuming foreign bribery investigations. However, the WSJ reported yesterday that the narrowed focus of enforcement on “matters that relate to U.S. strategic interests” has caused the DOJ to close “nearly half of its foreign-bribery investigations to align with new guidelines” — but, notably, they don’t “anticipate dismissing any more cases that have already been criminally charged.”

The Guidelines also include some procedural changes, described in this WilmerHale alert:

– First, the Guidelines state that the initiation of all new FCPA investigations and enforcement actions must be authorized by the Assistant Attorney General (or the official acting in that capacity) for the Criminal Division or a more senior Department official. The authority to open FCPA investigations formerly had been the provenance of the DOJ’s Fraud Section and the DOJ’s FCPA Unit.

– Second, the Guidelines explicitly direct prosecutors to consider the disruption to lawful business and the impact on a company’s business throughout an investigation—establishing the need to consider “collateral consequences” throughout an investigation and “not just at the resolution phase.”

– Third, the Guidelines also direct prosecutors to consider the likelihood that foreign regulators are willing and able to investigate and prosecute the misconduct, signaling deference to foreign authorities in the absence of compelling U.S. interests.

– In addition, the Guidelines state that “prosecutors shall focus on cases in which individuals have engaged in misconduct and not attribute nonspecific malfeasance to corporate structure.” During his remarks, Mr. Galeotti explained this aspect of the Guidelines as directing focus on “specific misconduct of individuals, rather than collective knowledge theories.” This language signals that the DOJ may take a stricter approach to the FCPA’s knowledge requirement in corporate cases.

The alert continues with these thoughts about FCPA enforcement going forward:

– Travel and entertainment cases and certain cases predicated on internal accounting control violations—both robust areas of enforcement over the years—may not present the severity of harm contemplated for DOJ enforcement under the Guidelines.

– Given the focus on cartels and TCOs, the next three years could see greater scrutiny of certain geographies—like Mexico—over other geographies that have more historically been at the center of FCPA investigations and resolutions.

– It remains to be seen how the SEC will fit into this new FCPA enforcement regime and whether the SEC will adopt the DOJ Guidelines, whether formally or informally, when considering its own FCPA enforcement.

It also includes these important reminders about the continued importance of compliance, including in areas that may not be highlighted in the Guidelines:

– Any abandonment or roll-back of FCPA compliance that some may have contemplated in the wake of the Executive Order would be unwise and ill-advised, particularly for non-U.S. entities who may find themselves competing with U.S. companies for business.

– Most importantly, as we noted in our client alert on the Executive Order, the FCPA remains U.S. law and carries a statute of limitations of five years (which may be extended far longer under certain conspiracy theories and when evidence is formally sought from overseas); FCPA violations committed today or in the next few years may be reviewed, and potentially prosecuted, under a different administration. It is important that companies remain vigilant to ensure that they have compliance programs in place that can prevent and detect violations of the statute and procedures in place to appropriately escalate and resolve issues when they do occur.

– Meredith Ervine