The Trump administration's significant cuts to foreign aid and its temporary pause on enforcing the Foreign Corruption Practices Act have sparked concerns that a global rollback in human rights is underway
In the first quarter of 2025, the administration of new President Donald J. Trump has cut US foreign aid by 92% over the next few years; and in late February, the Trump administration paused enforcement of the Foreign Corruption Practices Act (FCPA) for 180 days while the new U.S. Attorney General reviews existing FCPA actions and issues new guidance for enforcement of the statute.
Both of these moves reinforce the perception that there are signs of a global rollback in human rights, underscored by the European Union moving to reduce corporate accountability in human rights due diligence.
“Corruption is an enabler of human rights violations, [and] the rollbacks reduce accountability for bribery,” according to human rights experts Edith Wong and Nicola Cobb of FTI Consulting. Indeed, a reduction in accountability could embolden companies and potentially increase human rights abuses, they explain.
Risks of relaxing FCPA compliance
Over the years, many multinational companies have invested significantly in developing robust internal compliance programs to adhere to FCPA requirements. Weakening these frameworks could lead companies to divert resources away from maintaining compliance, which could allow bad actors to exploit the reduced scrutiny and result in increased fraud, misconduct, and human rights abuses.
“While these rollbacks in the US may indicate a temporary decrease in regulatory pressure within, it is essential for companies to recognize that global regulatory trends are moving towards greater corporate accountability,” not less, says Wong and Cobb. US companies operating internationally must adhere to these emerging standards, and the pause on domestic FCPA enforcement does not eliminate companies’ legal and reputational risks.
Wong and Cobb point out that FCPA enforcement has historically been cyclical, and companies reducing compliance efforts now might find themselves unprepared when enforcement resumes. Indeed, the statute of limitations for FCPA violations is five years for anti-bribery offenses and six years for accounting violations.
Recommendations for companies to navigate uncertainty
As businesses face a shifting regulatory landscape, navigating the path forward requires both immediate action and strategic foresight. The following guidance from Wong and Cobb offer a framework for maintaining ethical business practices and stakeholder confidence while adapting to evolving global standards.
In the short term, for instance, companies must adopt proactive strategies to prepare for the shifting landscape created by these rollbacks, including:
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- Monitoring global regulatory trends — Companies should actively track global regulatory developments to stay ahead of compliance requirements, even if these do not originate from the United States.
- Engaging with stakeholders — It is crucial to maintain open communication with investors and stakeholders regarding ongoing anti-corruption and human rights commitments. This engagement ensures transparency and reinforces the company’s dedication to ethical practices.
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In addition, companies should reinforce the message that the company maintains a zero-tolerance policy for bribery and corruption. In addition, companies should keep open anonymous hotlines to report potential ethics violations in order to prevent the erosion of a culture of ethics, which often takes years of effort to build. Likewise, companies need to continue monitoring their third-party vendors, consultants, or suppliers because over the past decade, about 90% of FCPA enforcement resolutions have involved third-party representatives or consultants engaged in corruption.
Meanwhile, Cobb and Wong also suggest that companies focus on aligning with international standards and best practices. Adhering to well-recognized international frameworks is crucial to remain competitive. For example, the UN’s Guiding Principles offers a flexible approach to keeping ethics practices around human rights, according to Wong. Likewise, Cobb suggests that companies voluntarily embrace the EU’s Corporate Sustainability Due Diligence and its Corporate Sustainability Reporting Directive, once the amendments are finalized, as robust options for compliance reporting.
Regardless of whether these rollbacks had occurred, the overarching recommendation is for companies to maintain robust corporate compliance and human rights risk management programs. This proactive approach not only prepares companies for potential regulatory changes but also positions them as leaders in ethical business practices on the global stage.
By continuing to prioritize compliance and human rights, companies can navigate the evolving regulatory landscape effectively, ensuring long-term business success and sustainability.
You can find more information on how organizations are managing their regulatory obligations here
