Law Council of Australia

International Law Section

Questioning the ‘G’ in ESG: US Intervention into International Trade and Business Practices

Written by Grace Forbes, 17 February 2025

US President’s recent executive order

On 10 February 2025, US President Donald Trump issued an executive order directing the US Attorney General to suspend enforcement of the Foreign Corrupt Practices Act (FCPA) for a 180-day period. The decision is to allow for a thorough review process and new guidelines to be implemented by the Attorney General who will:

  1. prohibit any new FCPA investigations or enforcement actions (unless there is an individual exception);
  2. review all current FCPA investigations and enforcement actions considering President Trump’s order and its stated objectives; and
  3. issue updated guidelines and/or policies which “adequately promote the President’s Article II authority to conduct foreign affairs and prioritize American interests, American economic competitiveness with respect to other nations and the efficient use of Federal law enforcement resources”.1

The order is made pursuant the President’s belief that FCPA overenforcement infringes upon his Article II authority to conduct foreign affairs.

FCPA and the OECD Anti-Bribery Convention

The FCPA, enacted in 1977, prohibits US companies and individuals from bribing foreign officials to benefit their business interests. It forms part of a global effort to prevent corruption, promote fair business practices and ensure ethical governance. The FCPA was internationalised in 1997 with the adoption of the OECD Anti-Bribery Convention (Convention) which has been signed and implemented by almost 50 countries, including Australia. Anti-bribery laws aim to aid fair competition, corporate accountability and international trade and investment between countries based on trust and integrity. Paradoxically, the US was one of the countries which strongly advocated for the global adoption of the Convention.

Implications

The current US President argues that the order will strengthen national security by eliminating undue barriers to the competitiveness of US companies and facilitate their gaining of strategic commercial advantages around the world. He considers the scope of the FCPA has broadened over time such that it now drains national resources and poses a growing cost to America’s economy. It is alleged that US companies are harmed when prohibited from engaging in practices common among international competitors. Instead of combatting these unlawful practices, the door may now be opened for US companies to join in on such conduct.

Concerns have arisen that the order seeks to diminish the US’s anti-corruption stance and may lead other nations to weaken their own anti-bribery laws. Critics argue it may result in increased corruption in international transactions and undermine years of global anti-corruption efforts. However, until the Attorney General completes her review and issues further guidance, the US’s updated position remains relatively vague. In the meantime, the order will likely have minimal impact on anti-bribery laws in other jurisdictions.

Key takeaways

The US President’s executive order poses a significant development in the US’s attitude towards corporate ethics, governance and accountability. It will be interesting to see if similar changes are made around the world and other countries follow suit to advance their own economic interests or whether the progress and commitments made towards more ethical business practices remain intact.

1 ‘Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security’, The White House (Web Page, 10 February 2025).

Disclaimer: This communication presents a spotlight on the position of US intervention into International Trade and Business Practices. However, it does not constitute legal advice. It does not represent the position of the ILS or the Law Council of Australia. Please consult wider legal commentary to inform yourself on the subject.

Last Updated on 24/03/2025

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