FCPA Not Amended or Repealed. There is some confusion over the current state of the Foreign Corrupt Practices Act (“FCPA” or the “Act”) among investment advisers (“Advisers”). It has not been repealed by the United States Congress, as many mistakenly believe. The text of the FCPA has not been amended in any way and remains in full force and effect. The focus of criminal enforcement of the Act has, however, been altered as described below.

Executive Order. The President signed Executive Order 14209 (the “Order”) in February of 2025 which paused criminal enforcement of the Act for six months to ensure that the FCPA is not (i) “stretched beyond proper bounds and abused in a manner that harms the interests of the United States,” (ii) used “against American citizens and businesses . . . for routine business practices in other nations,” or (iii) enforced in a manner that “harms American economic competitiveness and, therefore, national security. ”That six-month pause is over.

DOJ Guidelines. In response to the Order, Deputy Attorney General Todd Balanche issued a memorandum on June 9, 2025 titled “Guidelines for Investigations and Enforcement of the FCPA” (the “Guidelines”).The Guidelines are intended to ensure that FCPA investigations and prosecutions by the Department of Justice (“DOJ”) are carried out in accordance with the Order. To that end, all new FCPA criminal investigations and enforcement actions must be authorized by the Assistant Attorney General for the DOJ’s Criminal Division or a more senior official and consider several non-exhaustive factors, including:

A. Total Elimination of Cartels and Transnational Criminal Organizations (“TCO”).On February 5, 2025, the Attorney General issued a memorandum titled “Total Elimination of Cartels and Transnational Criminal Organizations. ”Consequently, one primary consideration in deciding to bring an FCPA investigation is whether the alleged misconduct is associated with or linked to a Cartel or TCO.

B. Safeguarding Fair Opportunities for U.S. Companies. Critical to safeguarding U.S. national security is ensuring economic growth and expansion of U.S. business opportunities abroad. Therefore, another important factor is whether the alleged misconduct harmed or deprived U.S. entities of fair access to compete or resulted in economic injury to American companies or individuals.

C. Advancing U.S. National Security. FCPA enforcement will focus on the most urgent threats to U.S. national security resulting from the bribery of corrupt foreign officials involving key infrastructure or assets such as critical minerals or deep-water ports, defense or intelligence.

D. Prioritizing Investigations of Serious Misconduct. FCPA investigations shall not focus on alleged misconduct involving routine business practices or de minimis or low-dollar, generally accepted business courtesies. To prioritize cases, FCPA prosecutors should consider whether foreign law enforcement authority is willing to prosecute the same alleged misconduct.

Culture Of Compliance Still Required. While the focus of the DOJ FCPA enforcement has been more narrowly focused pursuant to the Order and the Guidelines to align with U.S. strategic interests, the FCPA statute has not been amended. There is generally a five-year statute of limitations for FCPA violations, and the Order and Guidelines can be rescinded with the stroke of a pen by a future administration with different priorities. Consequently, Advisers that operate abroad must continue to maintain vigilance and a culture of compliance to avoid running afoul of the FCPA during this or future administrations. Another consideration is that alleged misconduct involving bribery of foreign officials may run afoul of multiple statutes—not just the FCPA—including anti money laundering, wire fraud, mail fraud, conspiracy to commit fraud and other securities law violations including failure to disclose material facts to investors.

Case Study: Och-Ziff. The Och-Ziff Capital Management Group, LLC’s (“Och-Ziff”) dual SEC and DOJ cases are instructive. Pursuant to those cases Och-Ziff was ordered to pay $413 million for violations of (i) the books and records and internal control provisions of the FCPA, (ii) Title 18, USC, Section 371, conspiracy to commit offenses against the U.S., (iii) the Securities Exchange Act of 1934, (iv) and the Investment Advisers Act of 1940 (“Advisers Act”) Sections 206(1), 206(2), 206(4) and Rule 206(4)-8 thereunder by omitting material information regarding certain transactions from its disclosures to investors and by engaging in self-dealing and improper use of investor funds.

Section 206 of the Advisers Act makes it unlawful for any investment adviser, directly or indirectly, to (1) “employ any device, scheme, or artifice to defraud any client or prospective client” or (2) “engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.”

Section 206(4) of the Advisers Act prohibits an investment adviser from, directly or indirectly, engaging in any act, practice or course of business which is fraudulent, deceptive, or manipulative. Rule 206(4)-8(a)(1) thereunder prohibits an investment adviser to a pooled investment vehicle from making an untrue statement of material fact or omitting to state a material fact necessary to make statements made not misleading to investors or prospective investors in those pools. Rule 206(4)-8(a)(2) thereunder provides that it is a fraudulent practice for an investment adviser to a pooled investment vehicle to engage in “fraudulent, deceptive, or manipulative” conduct with respect to any investor or prospective investor in the pooled investment vehicle.

Additional Resources. There have been hundreds of FCPA cases filed by the SEC and DOJ over the past several years. Stanford Law School catalogues many relevant FCPA statistics as does the SEC and DOJ. The DOJ also maintains an extensive FCPA Resource Guide (2nd Edition) which is by both the DOJ Criminal Division as well as the SEC Enforcement Division.

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