Overview
Significant announcements in the United States concerning US Department of Justice (DOJ) enforcement priorities, along with major developments in the United Kingdom’s legal landscape and notable changes in France and the European Union, promise to dramatically shift how corporations approach and evaluate compliance risk in the year ahead.
Members of McDermott’s global compliance team assessed recent developments and discussed how companies are modifying their compliance programs as a result.
Top takeaways included:
- While the DOJ has announced several shifts in enforcement priorities (most notably a pause in enforcement of the Foreign Corrupt Practices Act (FCPA)), there has been no change to the relevant laws that still subject companies and individuals to criminal prosecution. Moreover, conduct within the scope of US laws, including the FCPA, may also subject companies to scrutiny and potential exposure under state laws and global laws, such as the UK Bribery Act 2010. Additionally, enforcement authorities overseas, namely in the UK, France, and EU, have extended the extraterritorial reach of their corporate compliance laws and show signs of increasing enforcement, including against foreign companies for conduct that in some cases may have previously been beyond their jurisdiction. As a result, maintaining a robust compliance program is critical to ensuring that companies with cross-border operations remain complaint and avoid the expense of government scrutiny.
- US Enforcement Priority Shifts:
- FCPA: The DOJ’s enforcement of the FCPA has been paused for at least 180 days while the attorney general issues new investigation and enforcement guidelines. Existing enforcement actions at all levels are also under review, including a closely watched FCPA trial in New Jersey that the DOJ delayed on the eve of the trial. Despite the well-publicized pause, the FCPA remains the law and violations can be prosecuted for at least five years. Moreover, conduct that violates the FCPA may breach other applicable anti-corruption laws and regulations, including those discussed below in the UK and France.
- Anti-Money Laundering (AML): AML enforcement priority is also shifting to focus on transnational criminal organizations and drug cartels over traditional corporate corruption cases. As with the FCPA, AML laws like the Bank Secrecy Act, which requires financial institutions to have statutory compliance programs and have been the source of significant criminal enforcement, remain the law of land. Entities that violate those laws remain subject to investigation and criminal enforcement.
- Foreign Agents Registration Act (FARA): FARA, which requires agents of foreign principals to register if they are engaging in political activities, will see an increase in civil enforcement while criminal prosecution will focus instead on traditional espionage.
- UK Reforms:
- Two key reforms to the Economic Crime and Corporate Transparency Act 2023 mean that a company can now be held criminally liable for wrongdoing by a broader range of company gatekeepers and associated individuals, not just by board members or senior directors. Importantly, these reforms apply to conduct, persons, and entities inside and outside the UK.
- The “Senior Manager” Regime: As of December 2023, companies can now be criminally liable for fraudulent conduct, including deliberate misrepresentations, by “senior managers” – including those overseas – who play a “significant role” in company management. The term “senior managers” includes gatekeepers in functional roles in areas such as finance, human resources, marketing, or audit.
- The “Failure to Prevent Fraud” Offense: Effective September 1, 2025, large companies will be liable for fraud committed – including overseas –by employees, service providers, and other “associated persons” that is intended to directly or indirectly benefit the company. Offenses are punishable by unlimited fines. It is a complete defense if at the time of the offense, the company had implemented “reasonable prevention procedures” (i.e., an effective compliance program designed to prevent the relevant conduct).
- France and the EU:
- Developments over the last few years, in both continental EU and France, lean toward a reinforcement of the region’s anti-corruption enforcement priorities, including the protection of whistleblowers. For example, at the EU level, the region has directed stronger enforcement through the European Public Prosecutor’s Office, the independent public prosecutor charged with investigating and prosecuting crimes against the financial interests of the EU, such as cross-border tax fraud, money laundering, or corruption. In France, since 2017, French law (SAPIN II) has required companies headquartered in France, which includes their controlled subsidiaries abroad, to implement anti-corruption compliance programs that is overseen by a dedicated regulator: the French Anti-Corruption Agency. Proposed updates, such as the termed SAPIN III, would potentially extend those requirements.
McDermott’s Enforcement Outlook webinar series is designed to keep you up to date on the enforcement trends that might impact your organization’s compliance strategy. For more materials related to past episodes, visit our Enforcement Outlook Series hub.
