Over the course of the year — and even dating back to his time on the campaign trail — President Biden and senior officials in his administration, including Department of Justice (DOJ) and Security and Exchange Commission (SEC) leadership, have emphasized the importance of anti-corruption enforcement. Yet in 2021, court filings, new investigation disclosures and penalty totals related to enforcement of the Foreign Corrupt Practices Act (FCPA) have each dropped to levels lower than what practitioners had become accustomed to in recent years.
The Biden administration has sent signals throughout the year indicating that it is primed to reverse this trend. Compliance teams should be prepared for a surge of activity in 2022.
Recent Enforcement Trends
According to data collected by the FCPA Clearinghouse, enforcement activity continues to decline from its peak between 2016 and 2019. Each year from 2011 to 2015, the average number of new enforcement actions filed by either the DOJ or the SEC was 27. In 2016, that number ballooned to 58. From 2017 to 2019, activity remained high, with the average number of new filings between those three years settling at 46. But in 2020, activity began to decline toward pre-2016 levels, to only 36 new filings. The downward trend continued in 2021. With less than two weeks left in the year, the total number of actions for the year stands at 15.
Another indicator of the downward trend in enforcement activity is the recent decline in company disclosures of FCPA-related investigations. As of Dec. 17, 2021, available disclosures identified 35 entities subject to an ongoing FCPA-related investigation by either the DOJ or SEC, but most of these are long-running investigations. Only four entities disclosed new investigations this year, compared to six in 2020, eight in 2019, 17 in 2018, 29 in 2016, and between 21 and 23 per year between 2011 and 2015. It appears likely that 2021 will be the year with the lowest number of new disclosed investigations in a decade.
FCPA penalties are also in line to hit their lowest point in years. Since 2016, penalties have topped $1.9 billion every year, peaking at $7.13 billion in 2020. In 2021, as of Dec. 17, the SEC and DOJ have amassed only $461 million in penalties.
In addition to the pandemic, the present slowdown may be attributable in part to this year’s churn among senior agency staff following the change in administrations. Current SEC Chairman Gary Gensler was nominated in January, but he was not confirmed by the Senate until April 14. During the same month, the chief of the DOJ’s FCPA Unit, Christopher Cestaro, left the agency for private practice. His replacement, David Last, only assumed the permanent role of chief in August. In September, Daniel Kahn was appointed acting chief of the DOJ’s Criminal Fraud Section, and then, weeks later, he left the department for private practice.
Expectations Under the Biden Administration
There are indications that the DOJ and SEC will soon return to the heightened levels of FCPA-related enforcement seen between 2016 and 2019.
During the 2020 campaign, Biden promised that as president he would develop policies establishing “combating corruption as a core national security interest and democratic responsibility.”
In March of this year, the DOJ increased the number of prosecutors in its FCPA Unit, growing the staff to a record size of 39 prosecutors and adding one lawyer with compliance expertise. Then, on June 3, 2021, the White House issued a “National Security Study Memorandum” that framed “combating corruption” as a “core national security interest.” The memorandum ordered an interagency review process designed to generate a “Presidential strategy” that would “significantly bolster” the capacity of the U.S. government to respond to corruption abroad.
The memorandum was part of a series of coordinated announcements concerning a renewed focus on the FCPA for the administration and the DOJ. On June 2, 2021, at a conference on FCPA enforcement, then-Acting Assistant Attorney General Nicholas McQuaid said the DOJ was beginning to develop FCPA cases through novel, proactive methods. He explained that the DOJ planned to leverage data-mining capabilities and a network of law enforcement sources and cooperators while also working in partnership with foreign governments. Through these means, McQuaid said he anticipated the agency would produce enforcement results in line with the “size, scope, and significance” of prior years. During the same month, Attorney General Merrick Garland announced the creation of Joint Task Force Alpha, a task force designed to coordinate the DOJ and the Department of Homeland Security in enhancing U.S. enforcement efforts — including FCPA enforcement — in Mexico, Guatemala, El Salvador and Honduras. On the same day, Vice President Harris held a press conference with the president of Guatemala, further discussing initiatives related to Joint Task Force Alpha.
In August and October, the SEC and DOJ took further steps to augment enforcement capacity. On Aug. 2, 2021, Chairman Gensler directed the revision of Trump-era amendments to SEC regulations that had been criticized for weakening protections for whistleblowers. On Oct. 28, 2021, at the National Institute on White Collar Crime, Deputy Attorney General Lisa O. Monaco said the agency would continue to “surge resources to the department’s prosecutors,” noting that this would include embedding a new team of FBI agents in the DOJ’s Criminal Fraud Section.
Most recently, on Dec. 6, 2021, the White House published the “U.S. Strategy on Countering Corruption.” The strategy specifies five strategic pillars, with vigorous FCPA enforcement the cornerstone of the anti-corruption efforts that make up Pillar Three, “Holding Corrupt Actors Accountable.” This should be read together with Pillar One, which discusses efforts to fight corruption through enhanced data collection and analysis, improved information sharing and increased resources.
Responsive Strategies for Corporate Governance
Given the expectation that FCPA compliance will soon grow more demanding, compliance teams should emphasize FCPA compliance. It will also be increasingly important to ensure that compliance programs are well designed, leveraging resources such as DOJ guidance on assessing corporate compliance programs and the FCPA Resource Guide. Compliance programs should clearly align with these DOJ guidance documents, which explain what the agency expects for compliance programs and how high-quality compliance programs — in addition to self-reporting, cooperation and appropriate remedial action — influence the DOJ and SEC in their enforcement decisions. For example, the DOJ considers compliance efforts when determining if and how it should resolve an investigation or enforcement action and in determining the severity of a fine and whether a monitor should be imposed. Now would also be a good time for compliance teams to ensure their training materials — in particular, materials concerning FCPA compliance — are up to date and ready for delivery in 2022. Ensuring FCPA compliance programs and training are aligned with DOJ guidance will help limit potential exposure, particularly as the regulatory landscape evolves and becomes increasingly global and the number of enforcement actions escalates.
 Enforcement Actions, Foreign Corrupt Practices Act Clearinghouse (last visited Dec. 17, 2021), https://fcpa.stanford.edu/enforcement-actions.html; Investigations, Foreign Corrupt Practices Act Clearinghouse (last visited Dec. 17, 2021), https://fcpa.stanford.edu/investigations.html.
 2020 FCPA Year in Review, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html.
 2021 1st Quarter FCPA Report, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html; 2021 2nd Quarter FCPA Report, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html; 2021 3rd Quarter FCPA Report, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html.
 The FCPA Clearinghouse also collects data on FCPA-related investigations conducted by U.S. authorities, pulling data from public disclosures issued by public companies pursuant to SEC regulations, from statements made by company representatives and information released by U.S. authorities. About Us, Foreign Corrupt Practices Act Clearinghouse (last visited Dec. 17, 2021), https://fcpa.stanford.edu/about-the-fcpac.html.
 Paul Kiernan, Gary Gensler is confirmed as SEC Chairman by Senate, Wall St. J. (Apr. 14, 2021), https://www.wsj.com/articles/gary-gensler-is-confirmed-as-sec-chairman-by-senate-11618418366.
 Dylan Tokar, Justice Department’s Foreign Bribery Chief Moves to Private Practice, Wall St. J. (Apr. 29, 2021), https://www.wsj.com/articles/justice-departments-foreign-bribery-chief-moves-to-private-practice-11619736509.
 Aaron Nicodemus, David Last named permanent head of DOJ’s FCPA Unit, Compliance Week (Aug. 13, 2021), https://www.complianceweek.com/grc-appointments/david-last-named-permanent-head-of-dojs-fcpa-unit/30685.article.
 Dylan Tokar, Justice Department Gets New Acting Fraud Section Chief, Wall St. J. (Sept. 3, 2021), https://www.wsj.com/articles/justice-department-gets-new-acting-fraud-section-chief-11599169540; Dylan Tokar, Foreign Bribery Prosecutor Daniel Kahn Departs Justice Department, Wall St. J. (Sept. 29, 2021), https://www.wsj.com/articles/foreign-bribery-prosecutor-daniel-kahn-departs-justice-department-11632946129.
 Joseph R. Biden Jr., Why America Must Lead Again, Foreign Affairs, Mar.-Apr. 2020, https://www.foreignaffairs.com/articles/united-states/2020-01-23/why-america-must-lead-again.
 Dylan Tokar, Justice Department’s Foreign Bribery Unit Ads Prosecutors, Compliance Expertise, Wall St. J. (Mar. 8, 2021), https://www.wsj.com/articles/justice-departments-foreign-bribery-unit-adds-prosecutors-compliance-expertise-11615199402.
 The White House, Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest (2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/.
 Clara Hudson, FCPA enforcement is “in an entirely new” place, says acting criminal division chief, Global Investigations Review (June 2, 2021), https://globalinvestigationsreview.com/just-anti-corruption/fcpa/fcpa-enforcement-in-entirely-new-place-says-acting-criminal-division-chief.
 Attorney General Announces Initiatives to Combat Human Smuggling and Trafficking and to Fight Corruption in Central America, U.S. Department of Justice (June 7, 2021), https://www.justice.gov/opa/pr/attorney-general-announces-initiatives-combat-human-smuggling-and-trafficking-and-fight.
 2021 2nd Quarter FCPA Report, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html/.
 2021 3rd Quarter FCPA Report, Foreign Corrupt Practices Act Clearinghouse, https://fcpa.stanford.edu/resources-fcpac-reports.html.
 Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA’s 36th National Institute on White Collar Crime, U.S. Department of Justice (Oct. 28, 2021), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.
 The White House, United States Strategy on Countering Corruption (2021), https://www.whitehouse.gov/wp-content/uploads/2021/12/United-States-Strategy-on-Countering-Corruption-1.pdf.
 The strategy as a whole is designed to address the “transnational dimensions” of corruption. Pillars One through Three outline efforts involving U.S. law enforcement activities related to corruption and money laundering. Pillar One aims to “organize and resource the fight against corruption” through increased information sharing, funding and interagency coordination. Pillar Two concerns new efforts to bolster responses to money laundering within the U.S. financial system. Pillar Three outlines strategies for punishing perpetrators of money laundering and foreign bribery, including by enforcement of the FCPA. Pillars Four and Five of the strategy concern U.S. leadership in international fora. Pillar Four aims to strengthen preexisting international anti-corruption initiatives, such those organized by the U.N. and the Organization for Economic Cooperation and Development. The related Pillar Five aims to use diplomatic pressure, including foreign assistance, to encourage the development of new anti-corruption initiatives. Although all five pillars define aspects of a new comprehensive anti-corruption strategy, only Pillars One and Three directly concern the enforcement of the FCPA by U.S. authorities.
 U.S. Department of Justice Criminal Division, Evaluation of Corporate Compliance Programs, U.S. Department of Justice (June 2020), https://www.justice.gov/criminal-fraud/page/file/937501/download; U.S. Department of Justice Criminal Division, A Resource Guide to the U.S. Foreign Corrupt Practices Act, U.S. Department of Justice (July 2020), https://www.justice.gov/criminal-fraud/file/1292051/download.