Dive Brief:

• The U.S. slid in a global index measuring the perception of public sector corruption, Transparency International said, flagging doubts about ethics standards adopted by the Supreme Court.
• “The Supreme Court instituted a new ethics code in 2023, after a number of high-profile and widely publicized ethical scandals, but serious questions remain about the lack of meaningful, objective enforcement mechanisms and the strength of the new rules themselves,” Transparency International, a corruption watchdog, said in a report.
• The U.S. last year dropped to 28th from 24th in the Corruption Perceptions Index ranking of 180 countries, lagging France, Taiwan and Barbados, Transparency International said. Denmark’s public sector is deemed least corrupt and ranked first in the index. Transparency International bases the index on 13 different assessments of public sector corruption from organizations including the World Bank and World Economic Forum.

Dive Insight:

The decline in the global perception of U.S. anti-corruption safeguards preceded an executive order by President Donald Trump last week pausing enforcement of the Foreign Corrupt Practices Act, which bars companies operating in the U.S. from bribing officials abroad.

Under the order, the Justice Department will suspend prosecutions of executives accused of bribing foreign officials, review past actions under the FCPA and prepare new enforcement guidelines.

“U.S. companies are harmed by FCPA over-enforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field,” the Trump administration said in a statement following signing of the order on Feb. 10.

Trump cast the suspension of FCPA, enacted in 1977, as a gain for both U.S. competitiveness and national security.

“It’s going to mean a lot more business for America,” he said when signing the order.

Yet the order may prompt doubts about the commitment of U.S. companies to avert bribery and increase pressure on executives to act unethically, according to Transparency International U.S. Executive Director Gary Kalman.

“On a global stage, it will likely raise questions about how U.S. companies are operating overseas,” Kalman said Thursday. “Even honest companies that win merit-based contracts will face questions as to how they got a contract.”

Also, executives “will likely see increased pressure to engage in corrupt practices,” he said in an email reply to questions.

Finally, foreign regulators may pull back from tougher enforcement, Kalman said.

“Other countries were beginning to step up their enforcement of foreign anti-bribery laws,” he said, noting “they didn’t want the U.S. to police their businesses.

“I think we may see that global move toward more consistent enforcement drop off,” Kalman said.

The DOJ and Securities and Exchange Commission last year filed 26 FCPA-related enforcement actions, the Trump administration said. At least 31 companies were under investigation by the end of 2024.

Federal officials have launched an average of 36 FCPA enforcement actions during the past decade, “draining resources from both American businesses and law enforcement,” the Trump administration said.

Yet nine out of the 10 companies that have faced the highest sanctions under the FCPA are based abroad, according to the FCPA Clearinghouse at Stanford Law School. The nine companies have paid a total of more than $12.8 billion in sanctions.