Trump’s Executive Order Pauses FCPA Enforcement: Implications for Adani and Global Business Ethics
In a major policy shift, US President Donald Trump signed an executive order on Monday directing the Department of Justice (DOJ) to pause prosecutions under the Foreign Corrupt Practices Act (FCPA).
This law, in place for nearly 50 years, prohibits American entities from bribing foreign officials to secure or maintain business deals. Trump’s move comes as a significant development, particularly concerning Indian billionaire Gautam Adani, who was under DOJ investigation for alleged bribery and fraud.
Trump’s executive order pauses the enforcement of the FCPA and tasks Attorney General Pam Bondi with reviewing past and ongoing cases under the law. The move signals a sharp departure from the previous Biden administration’s aggressive stance on corporate corruption and international business ethics.
The timing of this decision is particularly noteworthy, as Indian Prime Minister Narendra Modi is set to visit the US on February 12 for a two-day trip, during which he will hold bilateral talks with Trump.
Under Biden’s DOJ, Gautam Adani and his conglomerate were reportedly under investigation for alleged fraudulent activities and bribery related to securing solar energy contracts in India. Trump’s decision to halt FCPA prosecutions could significantly impact the Adani case, potentially stalling or even nullifying legal action against him in the US.
The DOJ was reportedly probing whether Adani Group violated the FCPA by bribing Indian government officials to secure business contracts while raising funds in the US under false pretenses. The allegations suggested that Adani Green executives offered bribes worth $265 million to state officials in Odisha, Andhra Pradesh, Tamil Nadu, Chhattisgarh, and Jammu & Kashmir to obtain lucrative power contracts.
With the DOJ’s enforcement powers now effectively frozen, any ongoing investigations into Adani’s dealings in the US could be delayed or significantly weakened.
Adani Group has already been under intense scrutiny following a damning report by Hindenburg Research, which accused the conglomerate of stock manipulation, accounting fraud, and corruption.
The report raised concerns over alleged financial irregularities and the company’s dealings with foreign government officials. If US authorities were planning to act on these allegations using the FCPA, Trump‘s executive order could disrupt any forthcoming legal actions.
However, while the US may be stepping back, global regulators, including those in the UK and EU, might still continue their scrutiny of Adani’s business practices. Investors, too, will likely keep a close watch on how the situation unfolds.
With the US seemingly backing off, the focus now shifts to Indian regulators such as the Securities and Exchange Board of India (SEBI) and the Enforcement Directorate (ED). If these agencies decide against deepening their investigations, Adani could escape immediate legal troubles. However, if domestic or international pressure mounts, Indian authorities might be forced to act.
Trump has long criticized the FCPA, arguing that it puts American businesses at a disadvantage in global markets. According to the executive order’s fact sheet, the FCPA’s strict enforcement has led to an “uneven playing field” where US companies are unable to engage in common international business practices.
“U.S. companies are harmed by FCPA overenforcement because they are prohibited from engaging in practices common among international competitors, creating an uneven playing field,” the fact sheet stated.
During a press briefing, Trump further elaborated on his reasoning:
“It turns out that in practicality it’s a disaster. Nobody wants to do business with the Americans.”
However, his decision has drawn sharp criticism from anti-corruption advocates and business leaders who argue that the FCPA helps maintain ethical business practices worldwide.
Richard Nephew, a senior research scholar at Columbia University and former anti-corruption coordinator at the State Department, expressed his concerns on X (formerly Twitter):
“This is a horrible idea that US companies DO NOT WANT. Sure, you may find one or two, but most appreciate the fact that FCPA allows them to be firm in refusing bribes because most private sector companies—sensibly—see bribery as an unproductive cost.”
Trump’s decision marks a significant shift in how the US approaches corporate ethics and international business. While some argue that it could boost US companies’ competitiveness abroad, critics warn that it might embolden corruption and weaken global anti-bribery norms.
For Adani Group, this move is undeniably a major reprieve, at least for now. However, whether this pause leads to a complete rollback of investigations or if other legal avenues remain open will depend on how US authorities interpret and implement the order in the coming months.
