by Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen
Left to proper: Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen (pictures courtesy of authors)
Practically two months into his second presidential time period, President Trump and his Administration have engaged in a flurry of exercise, issuing over 80 government orders (EOs), 20 memoranda, and a dozen proclamations, in addition to making personnel changes and redeploying varied federal assets. Collectively together with his Cupboard members, President Trump has sought to swiftly roll out coverage initiatives, lots of which replicate a major change in course from the USA’ prior approaches and create uncertainty and new dangers throughout a number of sectors.
This text summarizes developments in 4 areas related to company compliance and danger mitigation arising from the most recent priorities introduced by the Administration: (i) a “pause” within the enforcement of the International Corrupt Practices Act (the FCPA); (ii) the designation of sure drug cartels and transnational legal organizations as “overseas terrorist organizations;” (iii) the improved scrutiny of variety, fairness, and inclusion (DEI) packages; and (iv) the implementation of latest or extra tariffs on sure imports.
1. Anti-Bribery and Corruption Enforcement
On February 10, 2025, President Trump issued an EO pausing enforcement of the FCPA for an preliminary interval of six months, and probably a further six months if deemed acceptable by Legal professional Normal Pamela Bondi. Particularly, the chief order directed AG Bondi to:
- Pause initiation of any new FCPA investigations or enforcement actions, until AG Bondi determines that a person exception needs to be made;
- Overview intimately all present FCPA investigations or enforcement actions and, the place relevant, take motion to “restore correct bounds” on FCPA enforcement and “protect Presidential overseas coverage prerogatives”; and
- Situation up to date tips or insurance policies to prioritize US pursuits and competitiveness with different nations and the environment friendly use of federal regulation enforcement assets.
The manager order was launched a number of days after AG Bondi had issued a memorandum directing the Division of Justice (DOJ) Felony Division’s FCPA Unit to: (i) prioritize investigations of alleged overseas bribery that facilitate legal operations of cartels and transnational legal organizations, together with, for instance, bribery of overseas officers to facilitate human smuggling and drug trafficking, and (ii) shift enforcement focus away from investigations and issues that don’t have such a connection.
Whereas the EO and DOJ memorandum sign a change from the longstanding focal factors of FCPA enforcement, it is very important word that anti-bribery and corruption compliance stays necessary for a number of causes, together with:
- The FCPA stays the regulation. The manager order displays the Administration’s acknowledged enforcement priorities however doesn’t legalize or immunize conduct prohibited by the FCPA.
- The statute of limitations relevant to FCPA violations (5 years) extends past the four-year time period of the present Administration. The next presidential administration could have totally different enforcement priorities and determine to analyze conduct that happens throughout this Administration.
- The EO and its accompanying “Reality Sheet” deal with leveling the taking part in discipline to the advantage of US firms. DOJ could subsequently prioritize investigations and prosecutions concentrating on non-US firms topic to US jurisdiction, notably the place circumstances recommend that such non-US firms could have engaged in corruption to achieve strategic enterprise benefits over US firms.
- The EO doesn’t apply to different regulators, such because the US Securities and Alternate Fee which has its personal devoted unit to analyze violations of the FCPA’s anti-bribery and inner accounting provisions (although the SEC can also undertake new enforcement approaches if it elects to “observe the lead” of DOJ), and DOJ and different regulators could proceed to implement different legal guidelines with extraterritorial attain, akin to cash laundering statutes or financial sanctions legal guidelines.
- Worldwide legal guidelines just like the FCPA, such because the French Anti-corruption regulation (Sapin II) and the UK Bribery Act, proceed to be enforcement priorities within the respective jurisdictions, leaving firms with world operations with ongoing anti-bribery and corruption dangers and obligations. Multilateral Improvement Banks have additionally established administrative sanctions programs to establish and punish misconduct, together with fraud and corruption, in tasks funded by such establishments. There are additionally anti-bribery and corruption legal guidelines enacted by US states that will probably be utilized extraterritorially to conduct that additionally violates the FCPA, and such state legal guidelines are unaffected by the EO. Furthermore, violations of the FCPA, even when uncharged, could function predicate acts in civil instances introduced pursuant to the federal RICO statute and probably state RICO legal guidelines as properly.
- Contractual obligations to adjust to anti-bribery and corruption legal guidelines and laws additionally stay unaffected, and breaches of such phrases may current business litigation danger.
2. Newly Designated International Terrorist Organizations
In February 2025, the US authorities formally designated eight Latin American organized crime teams that additionally function within the US as “overseas terrorist organizations” (i.e., International Terrorist Organizations and Specifically Designated International Terrorists). Such “terrorist” designations have traditionally been related to teams like al-Qaeda and Boko Haram. With the brand new designations, the US will deal with sure drug cartels and legal organizations as terrorist teams, together with Tren de Aragua in Venezuela, MS-13 in El Salvador, and 6 cartel teams primarily based in Mexico.
These designations have potential authorized and business implications for firms working in Mexico and different Latin American international locations the place drug cartels are embedded within the native economies, and have additionally been alleged to manage varied facets of society together with commerce routes. For example, in keeping with a 2024 Enterprise Safety Survey from the American Chamber of Commerce of Mexico: (i) 12% of surveyed firms working in Mexico reported that organized crime has taken partial management of the gross sales, distribution, and/or pricing of their items; and (ii) 45% reported that they’d obtained extortion calls for for defense funds.
The impacts of the brand new designations might be far-ranging. For example, firms (particularly these working in Mexico and the Latin American area):
- Could face heightened danger of legal legal responsibility for, amongst different issues: (i) knowingly offering materials assist or assets—tangible or intangible—to a chosen entity; and (ii) willful violations of the International Terrorism Sanctions Rules;
- Could also be discovered responsible for violations of US sanctions packages and probably topic to legal and civil penalties;
- Could also be uncovered to civil legal responsibility through the Anti-Terrorism Act, which allows US nationals injured in acts of worldwide terrorism to sue each the principal wrongdoers and people who help and abet or conspire to commit terrorist acts, and related statutes; and
- Who’re banks or fee processors, could also be topic to civil penalties in the event that they fail to establish, freeze, and report funds tied to such designated entities.
3. DEI Insurance policies and Applications
A number of of President Trump’s EOs handle DEI insurance policies and reference federal businesses in addition to the personal sector. By means of these government orders, President Trump ordered: (i) the termination of DEI-related packages within the federal authorities; (ii) the prohibition of utilizing race, gender, and different components in federal employment choices; and (iii) each federal company to develop methods to discourage illegal DEI practices within the personal sector.
As well as, State Attorneys Normal (State AGs) have began to establish firms with DEI packages. For example, 11 State AGs despatched a letter to sure monetary establishments on January 23, 2025, requesting info relating to DEI packages, and the State of Missouri filed a lawsuit in opposition to an American multinational coffeehouse chain on February 11, 2025, alleging that the company violated federal and state legal guidelines through the use of DEI insurance policies to discriminate in opposition to workers primarily based on race and intercourse. The State of Florida equally filed a lawsuit in opposition to an American retailer on February 20, 2025, alleging that the company engaged in securities fraud by concealing dangers associated to its DEI initiatives that provoked buyer backlash and erased billions of {dollars} from the company’s market worth.
Though the DEI-related EOs and related State AG actions are being challenged in courts, they’ve already sophisticated associated compliance efforts, particularly so for these firms going through competing or divergent disclosure and DEI regimes in Europe and elsewhere.
4. Tariffs
President Trump has directed his Administration to find out how the US would possibly impose extra tariffs throughout a lot of sectors, with the acknowledged purpose of curbing “threats” posed by unlawful aliens and medicines, and to spice up US manufacturing and defend jobs, increase tax income and develop the US economic system.
Amongst different actions, the present Administration has, for instance, introduced tariffs on sure imports from China, from Canada and Mexico, and of metal and aluminum. Many of those tariffs have been amended following their respective bulletins, and sure have been quickly suspended pending additional assessment and worldwide negotiations. Affected international locations have threatened or imposed counter-tariffs, and the EU has equally signaled that it’s going to reply “firmly and instantly” ought to the US impose tariffs which can be “unjustified limitations to free and honest commerce.”
The dimensions and scope of those new tariffs and counter-tariffs has resulted in important uncertainty relating to the way forward for world commerce and potential compliance dangers related to evasion or different enterprise pressures in responding to disruptions to worldwide provide chains.
As enforcement priorities and laws proceed to evolve underneath the Trump Administration, it’s prudent for firms to recurrently assess potential impacts of such modifications on their danger profile, and whether or not compliance assets needs to be directed in the direction of totally different enforcement priorities. Beneath are a number of steps that firms could think about in mild of shifting regulatory and company enforcement priorities within the US, in addition to elsewhere all over the world given the altering geopolitical panorama:
- Conduct ongoing assessments of authorized and compliance dangers to enterprise operations in mild of those new enforcement priorities, in order that firms could deploy compliance assets appropriately, notably the place there could also be variations in relevant legal guidelines, insurance policies and enforcement priorities throughout totally different jurisdictions related to multinational firms (e.g., with regard to anti-bribery and corruption, DEI, and worldwide commerce and sanctions).
- Consider present due diligence processes and KYC protocols, and whether or not any such processes needs to be amended to replicate evolving priorities, together with as an illustration:
- enhancing due diligence of distributors, suppliers, and different third get together intermediaries in Mexico and different Latin American international locations to deal with potential publicity to sanctioned events together with newly designated terrorist organizations; and
- reviewing world provide chain due diligence and monitoring processes, notably regarding suppliers positioned in jurisdictions which have been focused by just lately introduced tariffs.
- Improve compliance insurance policies and trainings for related workers in jurisdictions or enterprise features probably topic to elevated danger, akin to by offering particular coaching for figuring out and mitigating potential dangers related to conducting enterprise operations in Latin American international locations and alongside commerce routes the place just lately designated terrorist organizations (cartels and transnational legal teams) are perceived to be embedded within the native economies.
- Replace compliance hotlines and inner communication pathways in order that related stakeholders could increase any issues, and authorized and compliance groups could promptly and appropriately triage, examine, and handle such issues.
Adam Siegel, Eric Bruce, and Daniel Cendan are Companions and Emmeline Chen is a Senior Affiliate at Freshfields LLP.
The views, opinions and positions expressed inside all posts are these of the writer(s) alone and don’t symbolize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the writer(s) and any legal responsibility as regards to infringement of mental property rights stays with the writer(s).
by Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen
Left to proper: Adam Siegel, Eric Bruce, Daniel Cendan, and Emmeline Chen (pictures courtesy of authors)
Practically two months into his second presidential time period, President Trump and his Administration have engaged in a flurry of exercise, issuing over 80 government orders (EOs), 20 memoranda, and a dozen proclamations, in addition to making personnel changes and redeploying varied federal assets. Collectively together with his Cupboard members, President Trump has sought to swiftly roll out coverage initiatives, lots of which replicate a major change in course from the USA’ prior approaches and create uncertainty and new dangers throughout a number of sectors.
This text summarizes developments in 4 areas related to company compliance and danger mitigation arising from the most recent priorities introduced by the Administration: (i) a “pause” within the enforcement of the International Corrupt Practices Act (the FCPA); (ii) the designation of sure drug cartels and transnational legal organizations as “overseas terrorist organizations;” (iii) the improved scrutiny of variety, fairness, and inclusion (DEI) packages; and (iv) the implementation of latest or extra tariffs on sure imports.
1. Anti-Bribery and Corruption Enforcement
On February 10, 2025, President Trump issued an EO pausing enforcement of the FCPA for an preliminary interval of six months, and probably a further six months if deemed acceptable by Legal professional Normal Pamela Bondi. Particularly, the chief order directed AG Bondi to:
- Pause initiation of any new FCPA investigations or enforcement actions, until AG Bondi determines that a person exception needs to be made;
- Overview intimately all present FCPA investigations or enforcement actions and, the place relevant, take motion to “restore correct bounds” on FCPA enforcement and “protect Presidential overseas coverage prerogatives”; and
- Situation up to date tips or insurance policies to prioritize US pursuits and competitiveness with different nations and the environment friendly use of federal regulation enforcement assets.
The manager order was launched a number of days after AG Bondi had issued a memorandum directing the Division of Justice (DOJ) Felony Division’s FCPA Unit to: (i) prioritize investigations of alleged overseas bribery that facilitate legal operations of cartels and transnational legal organizations, together with, for instance, bribery of overseas officers to facilitate human smuggling and drug trafficking, and (ii) shift enforcement focus away from investigations and issues that don’t have such a connection.
Whereas the EO and DOJ memorandum sign a change from the longstanding focal factors of FCPA enforcement, it is very important word that anti-bribery and corruption compliance stays necessary for a number of causes, together with:
- The FCPA stays the regulation. The manager order displays the Administration’s acknowledged enforcement priorities however doesn’t legalize or immunize conduct prohibited by the FCPA.
- The statute of limitations relevant to FCPA violations (5 years) extends past the four-year time period of the present Administration. The next presidential administration could have totally different enforcement priorities and determine to analyze conduct that happens throughout this Administration.
- The EO and its accompanying “Reality Sheet” deal with leveling the taking part in discipline to the advantage of US firms. DOJ could subsequently prioritize investigations and prosecutions concentrating on non-US firms topic to US jurisdiction, notably the place circumstances recommend that such non-US firms could have engaged in corruption to achieve strategic enterprise benefits over US firms.
- The EO doesn’t apply to different regulators, such because the US Securities and Alternate Fee which has its personal devoted unit to analyze violations of the FCPA’s anti-bribery and inner accounting provisions (although the SEC can also undertake new enforcement approaches if it elects to “observe the lead” of DOJ), and DOJ and different regulators could proceed to implement different legal guidelines with extraterritorial attain, akin to cash laundering statutes or financial sanctions legal guidelines.
- Worldwide legal guidelines just like the FCPA, such because the French Anti-corruption regulation (Sapin II) and the UK Bribery Act, proceed to be enforcement priorities within the respective jurisdictions, leaving firms with world operations with ongoing anti-bribery and corruption dangers and obligations. Multilateral Improvement Banks have additionally established administrative sanctions programs to establish and punish misconduct, together with fraud and corruption, in tasks funded by such establishments. There are additionally anti-bribery and corruption legal guidelines enacted by US states that will probably be utilized extraterritorially to conduct that additionally violates the FCPA, and such state legal guidelines are unaffected by the EO. Furthermore, violations of the FCPA, even when uncharged, could function predicate acts in civil instances introduced pursuant to the federal RICO statute and probably state RICO legal guidelines as properly.
- Contractual obligations to adjust to anti-bribery and corruption legal guidelines and laws additionally stay unaffected, and breaches of such phrases may current business litigation danger.
2. Newly Designated International Terrorist Organizations
In February 2025, the US authorities formally designated eight Latin American organized crime teams that additionally function within the US as “overseas terrorist organizations” (i.e., International Terrorist Organizations and Specifically Designated International Terrorists). Such “terrorist” designations have traditionally been related to teams like al-Qaeda and Boko Haram. With the brand new designations, the US will deal with sure drug cartels and legal organizations as terrorist teams, together with Tren de Aragua in Venezuela, MS-13 in El Salvador, and 6 cartel teams primarily based in Mexico.
These designations have potential authorized and business implications for firms working in Mexico and different Latin American international locations the place drug cartels are embedded within the native economies, and have additionally been alleged to manage varied facets of society together with commerce routes. For example, in keeping with a 2024 Enterprise Safety Survey from the American Chamber of Commerce of Mexico: (i) 12% of surveyed firms working in Mexico reported that organized crime has taken partial management of the gross sales, distribution, and/or pricing of their items; and (ii) 45% reported that they’d obtained extortion calls for for defense funds.
The impacts of the brand new designations might be far-ranging. For example, firms (particularly these working in Mexico and the Latin American area):
- Could face heightened danger of legal legal responsibility for, amongst different issues: (i) knowingly offering materials assist or assets—tangible or intangible—to a chosen entity; and (ii) willful violations of the International Terrorism Sanctions Rules;
- Could also be discovered responsible for violations of US sanctions packages and probably topic to legal and civil penalties;
- Could also be uncovered to civil legal responsibility through the Anti-Terrorism Act, which allows US nationals injured in acts of worldwide terrorism to sue each the principal wrongdoers and people who help and abet or conspire to commit terrorist acts, and related statutes; and
- Who’re banks or fee processors, could also be topic to civil penalties in the event that they fail to establish, freeze, and report funds tied to such designated entities.
3. DEI Insurance policies and Applications
A number of of President Trump’s EOs handle DEI insurance policies and reference federal businesses in addition to the personal sector. By means of these government orders, President Trump ordered: (i) the termination of DEI-related packages within the federal authorities; (ii) the prohibition of utilizing race, gender, and different components in federal employment choices; and (iii) each federal company to develop methods to discourage illegal DEI practices within the personal sector.
As well as, State Attorneys Normal (State AGs) have began to establish firms with DEI packages. For example, 11 State AGs despatched a letter to sure monetary establishments on January 23, 2025, requesting info relating to DEI packages, and the State of Missouri filed a lawsuit in opposition to an American multinational coffeehouse chain on February 11, 2025, alleging that the company violated federal and state legal guidelines through the use of DEI insurance policies to discriminate in opposition to workers primarily based on race and intercourse. The State of Florida equally filed a lawsuit in opposition to an American retailer on February 20, 2025, alleging that the company engaged in securities fraud by concealing dangers associated to its DEI initiatives that provoked buyer backlash and erased billions of {dollars} from the company’s market worth.
Though the DEI-related EOs and related State AG actions are being challenged in courts, they’ve already sophisticated associated compliance efforts, particularly so for these firms going through competing or divergent disclosure and DEI regimes in Europe and elsewhere.
4. Tariffs
President Trump has directed his Administration to find out how the US would possibly impose extra tariffs throughout a lot of sectors, with the acknowledged purpose of curbing “threats” posed by unlawful aliens and medicines, and to spice up US manufacturing and defend jobs, increase tax income and develop the US economic system.
Amongst different actions, the present Administration has, for instance, introduced tariffs on sure imports from China, from Canada and Mexico, and of metal and aluminum. Many of those tariffs have been amended following their respective bulletins, and sure have been quickly suspended pending additional assessment and worldwide negotiations. Affected international locations have threatened or imposed counter-tariffs, and the EU has equally signaled that it’s going to reply “firmly and instantly” ought to the US impose tariffs which can be “unjustified limitations to free and honest commerce.”
The dimensions and scope of those new tariffs and counter-tariffs has resulted in important uncertainty relating to the way forward for world commerce and potential compliance dangers related to evasion or different enterprise pressures in responding to disruptions to worldwide provide chains.
As enforcement priorities and laws proceed to evolve underneath the Trump Administration, it’s prudent for firms to recurrently assess potential impacts of such modifications on their danger profile, and whether or not compliance assets needs to be directed in the direction of totally different enforcement priorities. Beneath are a number of steps that firms could think about in mild of shifting regulatory and company enforcement priorities within the US, in addition to elsewhere all over the world given the altering geopolitical panorama:
- Conduct ongoing assessments of authorized and compliance dangers to enterprise operations in mild of those new enforcement priorities, in order that firms could deploy compliance assets appropriately, notably the place there could also be variations in relevant legal guidelines, insurance policies and enforcement priorities throughout totally different jurisdictions related to multinational firms (e.g., with regard to anti-bribery and corruption, DEI, and worldwide commerce and sanctions).
- Consider present due diligence processes and KYC protocols, and whether or not any such processes needs to be amended to replicate evolving priorities, together with as an illustration:
- enhancing due diligence of distributors, suppliers, and different third get together intermediaries in Mexico and different Latin American international locations to deal with potential publicity to sanctioned events together with newly designated terrorist organizations; and
- reviewing world provide chain due diligence and monitoring processes, notably regarding suppliers positioned in jurisdictions which have been focused by just lately introduced tariffs.
- Improve compliance insurance policies and trainings for related workers in jurisdictions or enterprise features probably topic to elevated danger, akin to by offering particular coaching for figuring out and mitigating potential dangers related to conducting enterprise operations in Latin American international locations and alongside commerce routes the place just lately designated terrorist organizations (cartels and transnational legal teams) are perceived to be embedded within the native economies.
- Replace compliance hotlines and inner communication pathways in order that related stakeholders could increase any issues, and authorized and compliance groups could promptly and appropriately triage, examine, and handle such issues.
Adam Siegel, Eric Bruce, and Daniel Cendan are Companions and Emmeline Chen is a Senior Affiliate at Freshfields LLP.
The views, opinions and positions expressed inside all posts are these of the writer(s) alone and don’t symbolize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College Faculty of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the writer(s) and any legal responsibility as regards to infringement of mental property rights stays with the writer(s).
