Introduction
Since the beginning of his second term, President Donald Trump has implemented policy changes in accordance with top administration priorities that are likely to significantly alter the enforcement landscape for non-U.S. companies, particularly those in Europe. Notably, these changes include a redirection of Foreign Corrupt Practices Act (FCPA) enforcement priorities away from bribery and corruption and toward enforcement against cartels and transnational criminal organizations;1 threatened enforcement against diversity, equity, and inclusion (DEI) initiatives, which the administration has declared unlawful; and increased tariffs. The apparent and increasing divergence between the U.S. and Europe on these issues makes managing the legal and reputational risks for companies with a global footprint increasingly challenging. European-domiciled companies and companies with European operations need to closely monitor these evolving developments, continue to investigate and remediate known and new issues, and maintain effective compliance programs that mitigate their exposure to potentially increased enforcement by the Trump administration in these areas.
Changes to Anti-Corruption Enforcement Against European Companies
Changes to the U.S. Department of Justice's (DOJ) anti-corruption enforcement policies create an uncertain environment for enforcement against European companies for bribery or corruption. On February 10, 2025, President Trump issued an executive order instructing Attorney General Bondi to (i) cease the initiation of all new FCPA investigations and enforcement actions unless otherwise authorized by the attorney general; (ii) review all existing FCPA investigations and enforcement actions; and (iii) issue updated guidelines or policies governing FCPA investigations and enforcement actions to adequately promote the president's authority to conduct foreign affairs and prioritize American interests and the efficient use of law enforcement resources.2 The executive order stated that the attorney general's review is designed to protect "American economic competitiveness" from "overexpansive and unpredictable FCPA enforcement against American citizens and businesses."3 For a more detailed analysis on this executive order and the corresponding memorandum issued by Attorney General Bondi addressing the administration's new FCPA enforcement priorities, refer to WilmerHale's client alert "President Trump and Attorney General Bondi Announce Significant Shift in FCPA and Other Corporate Enforcement Priorities."
Recent DOJ actions may signal that it intends to scale back on FCPA enforcement. So far this year, the DOJ has brought no FCPA enforcement actions against corporations or individuals. However, the DOJ's new FCPA enforcement priorities could ultimately result in increased enforcement focus on European companies in an effort to "advance American economic and national security by eliminating excessive barriers to American commerce abroad."4 Foreign companies can be subject to jurisdiction under the FCPA by engaging in an act within the U.S. that furthered a corrupt payment or if they list their stocks on a U.S. exchange.5 Historically, a large portion of FCPA actions have targeted foreign entities, with nine out of the 10 largest FCPA resolutions by financial penalty involving foreign companies. In 2024, 45% of corporate FCPA enforcement actions were brought against foreign companies.6
While the extent to which the DOJ intends to shift its enforcement priorities related to the FCPA remains uncertain, European companies should maintain robust compliance programs. The executive order mandates a "detailed review" of current cases and enforcement actions, not a total halt on enforcement activity. Actions against non-U.S. companies have resulted in billions of dollars in penalties for the U.S. Treasury Department and could be deemed to "prioritize American interests and the efficient use of law enforcement resources" in accordance with the goals stated in the executive order.7 Moreover, the FCPA has a five-year statute of limitations, so any conduct considered illegal under the FCPA would still be eligible for enforcement after President Trump's second term.
In addition, regardless of where DOJ enforcement of the FCPA lands at the end of this pause, we expect to see a continued ramp-up of enforcement by European authorities with increased coordination among countries' law enforcement agencies. Mulitnationals that carry on part of their business in the UK, for example, remain subject to the broad extraterritorial jurisdiction of the UK Bribery Act in respect of any bribe paid by their associated persons anywhere in the world, as seen in the Rolls-Royce, Airbus, and Entain resolutions. For instance, as described in a prior client alert, on March 20, anti-bribery and corruption agencies in the UK, France, and Switzerland announced the formation of a new task force intended to formalize a shared commitment to tackling international bribery and corruption, in contrast to the current position of the Trump administration.8
Potential Challenges to DEI Efforts and Environmental, Social, and Governance Policies at European Companies
The Trump administration's challenges to DEI policies could cause significant impacts to European companies that employ such policies. On his second day in office, President Trump issued an executive order directing that all federal contracts include a certification requirement that the contractor "does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws," as well as a term that "compliance in all respects with all applicable Federal anti-discrimination laws is material to the government's payment decisions" under the False Claims Act (FCA).9 For additional information regarding potential impacts of the Trump administration's orders related to DEI, please refer to WilmerHale's client alert "Executive Order Seeks to Impose False Claims Act Liability for Federal Contractors' DEI Programs."10
In recent weeks, American embassies sent letters to foreign companies that have contracts with or provide supplies to the U.S. government, seeking to extend the reach of the anti-DEI executive orders. The letters, which public reporting indicates went to companies in Belgium, Denmark, France, and Spain, requested that the foreign companies make a "certification regarding compliance with applicable federal anti-discrimination law[s]" that certifies they do not promote DEI.11 On April 1, the U.S. State Department seemed to walk back the broad language of the letters by clarifying that the compliance requirement applies to companies only if they are controlled by a U.S. employer and employ U.S. citizens and that "there is no 'verification' required beyond asking contractors and grantees to self-certify their compliance with applicable U.S. federal anti-discrimination laws."12
The primary federal anti-discrimination law – Title VII of the Civil Rights Act of 1964 – does not apply to non-U.S. citizens working abroad for non-U.S.-based employers. This means that, for example, an employer based in the EU likely cannot violate Title VII. However, the Trump administration may continue to use federal funding and government contracts to promote its policies, including its opposition to workforce diversity initiatives, in European countries. For example, the administration may attempt to obtain commitments to end certain socioeconomic practices as a condition for awarding or continuing U.S. government contracts or other funding agreements involving U.S. federal government agencies operating within the EU.
So far, EU countries have responded in protest to the Trump administration's efforts to impose its policies on European companies. A Danish official urged the EU to unite against the letters requiring compliance with U.S. federal anti-discrimination laws.13 Belgium's deputy prime minister and minister of foreign affairs issued a statement that the U.S. government's termination of contracts on the basis of DEI efforts "could constitute a violation of the Vienna Convention on Diplomatic Relations."14 The European Commission has stated it is examining whether the requirements "amount to restrictions for participation of the companies from US government procurement," which "would need to respect the WTO General Procurement Agreement."15 That agreement requires that "open, fair and transparent conditions of competition be ensured in government procurement."16 In response to the administration's orders targeting DEI, some U.S.-based companies have rolled back or abandoned DEI commitments.17 In the meantime, it remains to be seen whether European companies will voluntarily roll back or modify their DEI commitments in light of the Trump administration's efforts. The approach may vary by company depending on the size of its U.S. business and its reliance on government contracts, among other factors. Companies with global footprints are effectively now caught between divergent DEI policy agendas in the U.S. on the one hand and in the UK and EU on the other.
The Trump administration's efforts to leverage government contracts to promote its philosophies could extend into other domains beyond DEI. For example, the administration may seek to punish European companies that have taken steps to boycott or divest from U.S. energy, as President Trump has signaled an intent to impose retaliatory measures on EU countries for failing to buy U.S. energy, including natural gas.18 The state of Texas provides a model for this approach, having passed a bill requiring state entities to divest from companies that Texas officials perceive to be antagonistic to the fossil fuel industry.19
Tariffs as an Enforcement Mechanism Against European Countries
President Trump has also expressed intent to impose tariffs on European and other foreign countries, as described more fully in WilmerHale's client alert analyzing the tariffs.20 Though on April 9, President Trump announced a three-month pause on his intended tariff schedule for all countries with the exception of China, it is unclear whether the tariffs will be reinstated after the pause.21 If reinstated, the tariffs may also provide the basis for enforcement against European companies for evasion of tariffs. As described in WilmerHale's client alert "The EU Anti-Coercion Regulation: A New Tool Against Economic Pressure,"22 the EU brought online a new Anti-Coercion Regulation in 2023 designed to protect against economic coercion by other countries via measures affecting trade or investment, and it remains to be seen whether the EU will deploy this new regulation in responding to potential reinstatement of the Trump Administration's new tariffs.
The DOJ has signaled intent to leverage the FCA to advance President Trump's enforcement priorities related to international trade. For instance, European companies may be subject to FCA actions for knowingly and improperly avoiding paying tariffs and should be aware that the DOJ will likely expand FCA enforcement to enforce the Trump administration's priorities. As such, European companies should maintain robust trade and customs compliance programs.
WilmerHale is closely monitoring these developments and is prepared to advise clients on how to navigate and mitigate the effects of the tariffs. For additional information regarding the impacts of the tariffs, please refer to WilmerHale's client alert "As Tariffs Increase, So Too May the Use of False Claims Actions to Pursue Customers Fraud."23
Footnotes
1. See Memorandum from the Att'y Gen. to all Dep't Emps.,"Total Elimination of Cartels and Transnational Criminal Organizations" (Feb. 5, 2025), https://www.justice.gov/ag/media/1388546/dl?inline.
2. Exec. Order, "Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security" (Feb. 10, 2025), https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-to-further-american-economic-and-national-security/; see also WilmerHale Client Alert, "President Trump and Attorney General Bondi Announce Significant Shift in FCPA and Other Corporate Enforcement Priorities" (Feb. 11, 2025).
3. Id.
4. Exec. Order, "Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security" (Feb. 10, 2025), https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-to-further-american-economic-and-national-security/.
5. 15 U.S.C. §§ 78dd–2(a), 2(i).
6. WilmerHale Client Alert, "President Trump and Attorney General Bondi Announce Significant Shift in FCPA and Other Corporate Enforcement Priorities" (Feb. 11, 2025).
7. Id.
8. WilmerHale Client Alert, "UK, French, and Swiss Enforcement Authorities Announce New Alliance" (Mar. 20, 2025).
9. WilmerHale Client Alert, "Executive Order Seeks to Impose False Claims Act Liability for Federal Contractors' DEI Programs" (Jan. 27, 2025).
10. Id.
11. "Denmark, Netherlands React to Trump's DEI Ultimatum," Newsweek (Apr. 2, 2025), https://www.newsweek.com/demark-netherlands-react-trump-dei-ultimatum-2054062.
12. "U.S. Seeks to Calm Tempest in Europe Over Trump's Anti-Diversity Policies," The New York Times (Apr. 2, 2025), https://www.nytimes.com/2025/04/02/business/dei-trump-europe-diversity.html.
13. "Denmark, Netherlands React to Trump's DEI Ultimatum," Newsweek (Apr. 2, 2025), https://www.newsweek.com/denmark-netherlands-react-trump-dei-ultimatum-2054062.
14. "U.S. Seeks to Calm Tempest in Europe Over Trump's Anti-Diversity Policies," The New York Times (Apr. 2, 2025), https://www.nytimes.com/2025/04/02/business/dei-trump-europe-diversity.html.
15. "Denmark, Netherlands React to Trump's DEI Ultimatum," Newsweek (Apr. 2, 2025), https://www.newsweek.com/denmark-netherlands-react-trump-dei-ultimatum-2054062.
16. Agreement on Government Procurement (GPA 2012), World Trade Organization (Apr. 6, 2014), https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm.
17. "European Countries Push Back Against Trump's Anti-DEI Crusade: Here Are All the Companies Rolling Back DEI Programs," Forbes (Apr. 2, 2025), https://www.forbes.com/sites/conormurray/2025/04/02/european-countries-push-back-against-trumps-anti-dei-crusade-here-are-all-the-companies-rolling-back-dei-programs/.
18. "A Trump Gas Deal Risks EU's Green Goals, Finland Warns," Politico (Jan. 28, 2025), https://www.politico.eu/article/finland-energy-environment-minister-kai-mykkanen-donald-trump-gas-deal-fossil-fuels-climate-change/.
19. S.B. 13, 87th Leg. (Tex. 2021).
20. WH Client Alert: President Trump Announces Significant Reciprocal Tariffs and Elimination of De Minimis Exemption (Apr. 3, 2025).
21. "Trump announces 90-day pause on 'reciprocal' tariffs with the exception of China," CNN Business (Apr. 9, 2025), https://www.cnn.com/2025/04/09/business/reciprocal-tariff-pause-trump/index.html.
22. WH Client Alert: The EU Anti-Coercion Regulation: A New Tool Against Economic Pressure (Apr. 2, 2025).
23. WH Client Alert: As Tariffs Increase, So Too May the Use of False Claims Actions to Pursue Customs Fraud (Mar. 10, 2025).
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