U.S President Donald Trump has signed an order to stop enforcing the Foreign Corrupt Practices Act (FCPA), a law that bans American companies from bribing foreign officials to win business deals. The FCPA has been in place for almost 50 years, but Trump believes it makes U.S. businesses less competitive compared to foreign companies that don’t follow similar rules.
With this new order, the U.S. Department of Justice (DOJ) can not start new FCPA cases unless the Attorney General gives special approval. Trump has also asked the Attorney General to review how the law is enforced and suggest changes within six months. During this time, no new cases can begin, and ongoing cases could also be reviewed.
At a press event in the White House, Trump defended his decision, saying, “This law is a disaster. It makes it hard for American businesses to compete.” The White House also released a statement arguing that the FCPA prevents U.S. companies from using common business practices that foreign companies can freely engage in.
How This Affects Gautam Adani
Trump’s order could directly impact ongoing cases, including a major investigation involving Indian billionaire Gautam Adani and his nephew Sagar Adani. The DOJ had accused the Adani Group of bribing Indian government officials to secure solar power contracts. Under President Biden, the DOJ charged the company with fraud and violating the FCPA.
Now that FCPA prosecutions are paused, any ongoing or future cases against Adani in the U.S. could be delayed or even dismissed. This comes after Hindenburg Research had already accused the Adani Group of stock manipulation and corporate fraud, raising concerns about possible bribery.
What Are the Allegations Against Adani?
The DOJ alleges that Adani Green, a part of the Adani Group, paid $265 million (about Rs.2,100 crore) in bribes to government officials in Odisha, Andhra Pradesh, and possibly Tamil Nadu, Chhattisgarh, and Jammu & Kashmir. These payments reportedly helped the company secure solar power deals at high rates.
The case also claims that Adani Green raised money in the U.S. by falsely stating they were following anti-bribery laws. This could be considered fraud under U.S. financial laws. However, the Adani Group has denied all accusations, calling them false and insisting they have followed all legal rules.
What Is the Foreign Corrupt Practices Act (FCPA)?
The FCPA was introduced in 1977 to stop U.S. companies from bribing foreign officials for business deals. It has two main parts:-
Anti-Bribery Rules: These make it illegal to offer or pay bribes, even through middlemen.
Financial Transparency Rules: Companies must keep honest financial records and cannot hide corrupt payments.
The FCPA is enforced by the DOJ and the Securities and Exchange Commission (SEC). If a company or person breaks this law, they could face huge fines or even jail time.
Before the FCPA, bribery was common in global business, and companies even listed bribes as business expenses in tax filings. The law was meant to create fair competition and align U.S. rules with international anti-corruption agreements.
However, Trump’s administration urges that the law unfairly limits American companies while other countries allow bribery without consequences. By suspending the FCPA, Trump is changing how the U.S. handles corporate corruption, which could have major effects on international business and ethics.