Kathleen Hamann Quoted in Law360: Tariffs, FCPA Enforcement Pause Heighten Bribery Risk

Excerpted from the April 30, 2025 edition of Law360

The president recently signed an executive order pausing enforcement of the Foreign Corrupt Practices Act (FCPA). The Act had been, “focused on curbing public corruption around the world by overseeing how American businesses operate in other countries.”

But between the tariffs and the pause in enforcing the FCPA, some leading experts believe that, given the increased economic pressures, some companies will find “opportunities or incentives for bribery and corruption.”

While the U.S. retreats from enforcing the FCPA, other countries are collaborating to prioritize and investigate international bribery and corruption. As those countries ramp up their efforts, it remains unclear whether the U.S. will cooperate with foreign regulators in seeking U.S.-based evidence they need to build their cases.

Pierce Atwood partner Kathleen Hamann, who previously worked for the Justice Department and U.S. Department of State, stated that, “events such as a substantial increase on tariffs are ‘shocks to the system’ that create pressures on firms’ profitability. Those pressures create increased risk for misconduct.”

Kate went on to note that the anti-corruption laws of other jurisdictions could mitigate the U.S. pause on FCPA enforcement. “The Foreign Corrupt Practices Act may have been the only game in town when it was passed in ’77, but the world has changed a lot since then,” adding, “while the United States’ global dominance in enforcing the FCPA has historically offered firms a convenient shield when facing bribe demands, the impact of the enforcement pause may be softened by the transnational bribery laws of other countries and the fact that bribery remains a violation of domestic law.”

Kate pointed to the international Organisation for Economic Co-operation and Development (OECD), which has, “a working group on bribery that has raised the bar on transnational bribery across all the major economies, and those jurisdictions have the capability to prosecute these kinds of crimes — even if their enforcement numbers have not previously matched those of the U.S.”

She specifically pointed to the U.K. Bribery Act 2010 and the U.K.'s Serious Fraud Office, Canada's Corruption of Foreign Public Officials Act, the Royal Canadian Mounted Police investigators who are trained in transnational bribery cases, and the experience of investigators in Switzerland, Brazil, and the city of London.

“Some countries have double jeopardy laws that preclude prosecution in those countries if the U.S. prosecutes a matter first. In that sense, the U.S. pause on FCPA enforcement may remove a barrier to non-U.S. prosecutions. While the U.S., I think, broke the ground, there are a lot of other countries that have quite a capability to pursue and prosecute these kinds of cases as well and might be more incentivized to do so now that they know that the U.S. isn't," Kate said.

Kate also noted that, “state attorneys general can learn from the DOJ's years of active FCPA enforcement, and that New York prosecutors, in particular, have experience with high-level, cross-border financial crime. And amid mass layoffs across the federal government, FBI agents and others familiar with prosecuting these kinds of cases could be recruited to work for state attorneys general offices.

“The fundamental problems stemming from bribery are business issues, and all the business reasons not to engage in bribery remain the same. Among other things, bribes cut into a firm's profits, and they aren't enforceable, meaning firms that engage in bribery may not get what they pay for,” adding, “certainly, federal enforcement is going to drop. I don't think there's any doubt about that, but from the perspective of a company looking at the risks posed by engaging in that kind of misconduct, I don't think those risks have really changed. The realities of enforcement don't necessarily impact the calculation within a company as much as you might think that they would."

Kate also pointed out that, “bribery offenses committed now would still be subject to enforcement after the next U.S. presidential election, in light of the FCPA's five-year statute of limitations,” adding that she has been, “advising firms for years to implement "principle-based" compliance policies — ones that are centered on anti-bribery and anti-corruption, rather than ones that heavily emphasize the FCPA or any other specific law. She said it's an exercise in futility to create rules that attempt to cover every situation that might arise, since the risk environment is always shifting.

“And just as engaging in bribery is a business issue, so too are strong compliance programs and corporate cultures of ethics and integrity. Firms have transitioned away from compliance programs that focus solely on U.S. law and created programs that prioritize international principles such as supply chain integrity and data protection.

"When you have an organization that meets all of those criteria, that raises the bar on all of those things, you're more attractive to investors, you're more attractive to employees, you're more attractive to business partners and the whole nine — in addition to the fact that you're less likely to end up with an enforcement action on your hands.”

The complete article by Sarah Jarvis can be found in the April 30, 2025 edition of Law360. Additional reporting from Bonnie Eslinger, Elliot Weld, Natalie Olivo and Ronan Barnard. Edited by Jay Jackson Jr. and Emily Kokoll.