Hui Chen previously served as “Compliance Counsel Expert” within the DOJ.
She is certainly no fan of Donald Trump as evidenced by her social media posts during the first Trump administration. (See here for the prior post).
After leaving the DOJ, Chen has called out the “lack of precision and intellectual rigor” in much compliance writing and commentary. (See this prior post).
Regarding President Trump’s recent Executive Order “pausing” FCPA enforcement, Chen recently wrote:
“The corporate compliance community may be in a bit of shell shock.
[…]
Many in the compliance world have expressed lament, concerns, and anger. Understandably so. For an industry that has been so dependent on enforcement as its raison d’être, this may feel like an existential crisis.
[…]
One of the first to be impacted would be law practices that have thrived on conducting global FCPA investigations. Companies have been willing to fund these expensive outside-counsel investigations for two primary reasons: preservation of attorney-client privilege and potential representation before DOJ, both premised on the likelihood of a DOJ investigation. These have driven companies to firms with global practices, often led by former DOJ prosecutors. With the threat of enforcement removed, many in-house legal and compliance decisions-makers, who have been able to justify these expenses in the face of often intense budget pressures, will likely turn to either in-house personnel or lower cost external options for future internal investigations and reviews.
[…]
The Executive Order claims that the FCPA “has been…stretched beyond proper bounds…” While I do not entirely agree with that characterization, I do think the compliance industry’s perception and interpretation of what it requires has often been exaggerated by a fear-mongering industry.”
See here for the prior post “The Chickens Are Coming Home to Roost.”
The broader point of Chen’s post was that companies should not “rely” on FCPA enforcement to be a main – or even major reason – for engaging in compliance.
I agree and have stated as such numerous times in recent days.
More broadly, one of the many odd aspects of recent commentary about the Executive Order is the implicit suggestion (or implied narrative) that there is an abundance of DOJ FCPA enforcement.
In the FCPA’s modern era (the last 10-15 years) has there been more DOJ FCPA enforcement this prior decades?
Yes.
However, over the last decade, the average number of DOJ corporate FCPA enforcement actions per year has been seven.
Think of the denominator though.
Every U.S. company (public or private) or other forms of U.S. business organization are subject to the FCPA. Every foreign company with shares traded on a U.S. exchange (approximately 1,000 in any given year) is subject to the FCPA. And – if the jurisdictional prong of the so-called dd-3 prong of the FCPA’s anti-bribery provisions is met – every company in the world can be subject to the FCPA.
This denominator is enormous and potentially massive.
Yet, seven is the average number of DOJ corporate FCPA enforcement actions over the last decade.
