Understanding Foreign Corrupt Practices Act Compliance in 2025: Everything You Need To Know
By discouraging bribery as a method of gaining competitive advantage, the FCPA helps level the playing field for all businesses — which, in turn, enhances public trust and confidence in global markets. Here’s everything you need to know to comply in 2025.
What is the FCPA?
The Foreign Corrupt Practices Act (FCPA) is a U.S. law enacted in 1977 to combat bribery and corruption in international business transactions. It prohibits offering, giving, or promising anything of value to foreign officials to obtain or retain business; it also requires publicly traded companies to keep accurate records and establish stringent internal controls to ensure compliance. The legislation allows for whistleblower protections and rewards under the Dodd-Frank Act.
The FCPA represents the first U.S. law specifically addressing the bribery of foreign officials. During the Watergate scandal of the early 1970s, it was discovered that numerous U.S. corporations had been engaging in widespread bribery of foreign officials to secure business deals as part of President Richard Nixon’s re-election campaign. These unethical practices were part of broader corporate misconduct that came to light, highlighting an immediate need for legal reforms to address corporate bribery and corruption in international business transactions.
The FCPA’s jurisdictional reach is extensive, since it applies not only to U.S. companies and citizens but also to certain foreign entities and individuals. This extraterritorial jurisdiction means that it can cover acts of bribery committed outside U.S. borders if there is a connection to the U.S., such as using American financial institutions or securities exchanges. Moreover, the FCPA aligns with international efforts to combat corruption, such as the OECD Anti-Bribery Convention, further strengthening global initiatives to maintain ethical business standards.
Violations of the FCPA can result in civil and criminal penalties, including fines and imprisonment. Enforcement is carried out by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
FCPA Key Components: Anti-bribery and Accounting Provisions
The FCPA includes provisions that cover both anti-bribery and accounting.
- Anti-bribery provisions: These provisions prohibit offering, promising, or giving anything of value to foreign officials to obtain or retain business, including payments made indirectly or through an intermediary. This applies to U.S. companies, citizens, and certain foreign entities and individuals, including foreign officials, foreign political parties, or candidates for foreign political office.
- Accounting provisions: The FCPA accounting provisions require publicly traded companies to maintain accurate records and internal controls, thereby mandating transparency in financial reporting to prevent any concealment efforts. This applies to all transactions, not only those involving foreign officials or political candidates.
To comply with these provisions, all regulated corporations and parties must:
- Implement robust internal controls, including employee compliance programs, reporting channels, and whistleblower protection measures
- Conduct due diligence on third-party intermediaries and business partners
- Maintain accurate and transparent financial records and disclosures
- Provide regular training and awareness programs for employees on FCPA compliance
Whistleblowers and the FCPA
The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, includes provisions specifically designed to protect whistleblowers who report securities violations to the SEC, including those in breach of the FCPA.
Whistleblowers have a significant impact on FCPA investigations and compliance efforts. With their insider knowledge, they can uncover hidden misconduct and provide valuable evidence to authorities that may not be accessible otherwise, leading to enforcement actions and substantial penalties against violators.
The protections and incentives offered to whistleblowers encourage more individuals to come forward with information, thereby enhancing transparency and deterring corporate misconduct. Consequently, companies must prioritize creating a culture that encourages internal reporting and safeguards whistleblowers. This approach strengthens compliance efforts while helping to mitigate risks associated with potential FCPA violations.
Recent Enforcement Trends and Recent Notable Cases
A series of recent high-profile cases have led to the SEC and DOJ doubling down on their commitment to anti-corruption with additional FCPA enforcement and stronger (and swifter) penalties.
- Ericsson (2019)
From 2000 to 2016, Swedish multinational telecommunications company Ericsson paid tens of millions of dollars in bribes to government officials and third parties, created and maintained slush funds in multiple countries, and falsified its books and records to conceal these activities and circumvent internal controls. The purpose of the misconduct was to secure and retain business, including winning contracts and obtaining favorable regulatory treatments. Ericsson maintains U.S. offices, processes transactions through U.S. financial institutions, and is listed on the NASDAQ stock exchange — and has been subsequently brought to justice by U.S. regulators.
In December 2019, Ericsson settled with the DOJ and the SEC, which involved a deferred prosecution agreement with the DOJ and total penalties exceeding a record $1 billion. Ericsson also committed to enhancing its compliance program and internal controls and agreed to retain an independent compliance monitor for three years to oversee its adherence to the FCPA and the settlement terms. In March 2023, Ericsson pled guilty to breaching the terms of its deferred prosecution agreement, which imposed an additional financial penalty of $207 million and extended its compliance monitorship for a year.
The Ericsson case underscores the extensive reach of the FCPA, applying not only to U.S. companies and citizens but also to foreign companies with significant business operations linked to the U.S. It also demonstrates the consequences of violating settlement terms, even if it seems as though the dust has settled.
Some violators do take the high road and turn themselves in after lengthy internal investigations. When it comes to self-disclosure, no good deed goes unpunished — but it does lead to minimized repercussions, as was the case with two recent high-profile violators.
- Albemarle and Lifecore (2023)
In September 2023, chemical manufacturing company Albemarle voluntarily self-disclosed to the DOJ that it had been making improper payments to foreign officials to secure business advantages from at least 2009 to 2017. However, the DOJ found that Albemarle did not disclose the violations in a “reasonably prompt” manner, as it took 16 months from the receipt of the allegation of misconduct and nine months from substantiating the allegation to report it to the authorities. Despite this delay, Albemarle received a significant discount on fines due to its extensive remediation efforts, including withholding bonuses from implicated employees and implementing robust compliance measures.
Lifecore Biomedical, on the other hand, responded more swiftly to its own revelation of bribery in the same year. The company learned of potential misconduct and disclosed it to the DOJ within three months, with less than a day elapsing from confirming the misconduct to reporting it. This prompt action resulted in the DOJ granting Lifecore a declination — the company was not prosecuted for the violation.
Both cases illustrate the DOJ’s emphasis on the speed and thoroughness of self-disclosure, as well as the importance of effective remediation in determining the outcomes of FCPA investigations.
Compliance Strategies and Best Practices in 2025
Ensuring compliance with the FCPA is crucial for any business engaged in international operations. By following these best practices, companies can enhance their compliance efforts and mitigate the risks associated with FCPA violations.
- Meet and match the high compliance expectations of the DOJ and SEC.
Regulated entities must prioritize effective, risk-based compliance programs with empowered compliance professionals, then regularly monitor and test them to ensure effectiveness and address root causes of misconduct. Leaders should mirror regulators’ high expectations in their vocal support of rigorous compliance measures. - Build effective compliance programs.
First, companies need to conduct thorough risk assessments to identify potential areas of FCPA risk. Then, they must implement robust internal controls, policies, and procedures tailored to mitigate identified risks; provide regular training and awareness programs for employees on FCPA compliance; and tangibly foster a culture of compliance through leadership commitment, tone from the top, and accountability at all levels. - Communicate and uphold best practices for voluntary self-disclosures, cooperation, and remediation.
To ensure timely and transparent voluntary self-disclosures to the DOJ and SEC — at the individual and company-wide levels — companies must mandate full cooperation with authorities, including coaching employees on providing timely and thorough responses to requests for information. Remediation measures should be installed to address underlying issues and prevent future misconduct. All regulated entities — even those who have avoided violations — should regularly assess and improve their compliance programs based on lessons learned from past investigations and enforcement actions.
8 Predictions For Future FCPA Enforcement and Compliance Trends
Ericsson, Albemarle, Lifecore, and other recent cases are indicative of several trends in FCPA enforcement and penalties, including:
- Increased coordination with foreign authorities
There has been a marked increase in cooperation between U.S. enforcement agencies and foreign regulatory bodies, as exemplified by programs such as the International Corporate Anti-Bribery Initiative (ICAB). This coordination facilitates more comprehensive investigations and resolutions, especially in cases involving multinational corporations. Enhanced global collaboration helps in tackling complex, cross-border bribery schemes and ensures that corporations cannot evade accountability by exploiting jurisdictional boundaries.
- Emphasis on timely self-disclosure, cooperation, and remediation
The DOJ and SEC have been placing greater emphasis on voluntarily self-disclosing FCPA violations as soon as possible. The agencies are also focusing on rewarding those who cooperate fully with investigations and implement effective remediation measures. Companies that promptly disclose misconduct, cooperate with authorities, and take steps to prevent future violations can receive significant benefits, such as reduced fines and penalties, as seen in the Lifecore case. - Use of data analytics in investigations
Enforcement agencies are increasingly leveraging advanced data analytics to identify patterns of corrupt behavior, track financial transactions, and uncover hidden relationships between entities. This tech-enabled approach enhances regulators’ ability to detect and investigate complex bribery schemes more efficiently and accurately. It also encourages companies to adopt similar tools in their compliance programs to monitor and prevent potential violations.
Senior FCPA enforcement officials also see the collective trend of candidness continuing, as evidenced by insights gathered at the American Conference Institute’s 40th International Conference on the FCPA. Their predictions include:
- An overall increase in FCPA resolutions
DOJ and SEC officials anticipate more FCPA resolutions in 2025 than previous years, which indicates a heightened commitment to combating corruption and reflects the significant resources allocated to investigating and prosecuting FCPA cases. Companies should prepare for increased enforcement activity and ensure their compliance programs are suitably robust and effective. - Emphasis on individual accountability
Along with voluntary self-disclosure, officials see greater emphasis placed on individual misconduct and taking personal accountability for one’s actions. Companies must ensure that their internal reporting mechanisms are effective and that their policies explicitly guarantee whistleblower protection. - Stricter post-settlement obligations
Prosecutors, regulators, and other officials expect companies to fulfill post-settlement obligations diligently, with breaches resulting in real consequences, as evidenced by the Ericsson case. This trend underscores the need for companies to allocate sufficient resources to monitor compliance and address any deficiencies promptly. - Continued use of monitorships
Monitorships remain relevant as a means to ensure post-settlement compliance, especially for companies with a significant history of misconduct. Companies with past violations should be prepared for the possibility of a monitorship and take steps to strengthen their compliance frameworks. - Risk-based compliance approach
No would-be violator breaches FCPA compliance planning to get caught. The increasing creativity of violators highlights the need for companies to conduct regular risk assessments to identify vulnerabilities and then tailor their compliance programs accordingly.
Regulators value dynamic and responsive — yet realistic — compliance programs that identify and address key risks while adapting to evolving regulatory expectations. By staying ahead of regulatory trends and investing in robust compliance measures, companies can better manage the challenges posed by FCPA enforcement.
To see how the suite of compliance software solutions in the STAR Platform can help your firm adhere to the FCPA and support an educated and empowered workforce, request a demo today.
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