The recent executive order by President Trump suspending Foreign Corrupt Practices Act (FCPA) enforcement for 180 days has sent shockwaves through the corporate compliance world. For middle-market businesses, this development raises crucial questions about risk management, compliance strategies, and long-term corporate governance.

What the FCPA Enforcement Pause Means

On February 10, 2025, President Trump signed an executive order instructing the Department of Justice (DOJ) to temporarily halt new FCPA investigations and enforcement actions. This directive intends to reassess how the FCPA is applied and to ensure that enforcement aligns with economic competitiveness and national security priorities. The order mandates that the Attorney General review existing FCPA cases and propose updated guidelines that prioritize efficiency and fairness in prosecution.

Potential Implications for Middle-Market Companies

For middle-market companies that often operate in global markets with limited compliance resources, this pause presents both opportunities and risks:

1. Short-Term Relief from Aggressive Enforcement

   • The pause may temporarily reduce the immediate legal and financial risks associated with FCPA violations.
   • Businesses operating in jurisdictions with high corruption risks may experience a relaxation of oversight, potentially reducing compliance costs.

2. Uncertainty in Long-Term Compliance Strategy

   • The FCPA remains law, meaning that enforcement could resume with new policies that may be more lenient or stricter.
   • Companies that scale back compliance efforts too aggressively may be unprepared for a sudden reinstatement of enforcement actions, leading to increased legal and reputational risks.
   • Businesses should exercise extreme caution when considering any reductions in compliance investments, as regulatory shifts could reintroduce enforcement pressure unexpectedly.

3. Competitive Landscape Shifts

   • Some middle-market firms may take advantage of relaxed enforcement to expand operations in high-risk regions.
   • Larger corporations with robust compliance programs may continue their stringent anti-bribery efforts, leaving middle-market firms to navigate a more unpredictable regulatory environment.

4. Reputation and Ethical Considerations

   • While the enforcement pause may reduce legal consequences, engaging in questionable business practices can damage a company’s reputation.
   • Customers, investors, and international partners may still expect high compliance standards despite regulatory changes.

Strategic Recommendations for Middle-Market Companies

Despite the temporary pause in enforcement, middle-market companies should not abandon their compliance programs. Instead, consider the following actions:

1. Maintain Core Compliance Programs

   • Continue internal training, third-party due diligence, and monitoring efforts to mitigate long-term risks.
   • Ensure that ethical business practices remain a core part of corporate culture.

2. Reassess Compliance Policies

   • Take this period as an opportunity to review current compliance frameworks and identify areas for improvement.
   • Align compliance programs with updated DOJ guidelines as they are released.
   • Avoid making hasty decisions to reduce compliance efforts, as regulatory changes could reverse the enforcement pause at any time.

3. Monitor Regulatory Developments

   • Stay informed about changes in FCPA enforcement policies to anticipate potential shifts in compliance expectations.
   • Engage legal and compliance experts to interpret policy updates and their implications.

4. Leverage Compliance as a Competitive Advantage

   • Companies with strong compliance programs can use them as a differentiator in the market, fostering trust with clients and investors.
   • Proactive compliance can protect against potential reputational damage in the event of future enforcement resumption.

Conclusion

While the FCPA enforcement pause may provide temporary relief, middle-market firms must remain vigilant. The long-term trajectory of anti-bribery regulations remains uncertain, and businesses that maintain strong compliance practices will be better positioned for any future policy shifts. Instead of viewing the pause as an opportunity to relax compliance efforts, middle-market companies should use this time to strengthen internal policies and prepare for potential regulatory changes. Companies should be particularly cautious about scaling back compliance efforts, as the resumption of enforcement could place them at greater legal and reputational risk.

At Prosperus Risk Consulting, we help middle-market businesses navigate complex regulatory landscapes and build resilient compliance programs. Contact us today to assess your risk exposure and develop a forward-thinking compliance strategy that aligns with your business objectives.