Pause of FCPA unlikely to affect investigations by US SEC, say experts

The recent executive order by US President Donald Trump, pausing enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days, has added significant uncertainty to ongoing cases involving Indian companies or operations in India, but the investigations may still move forward under the jurisdiction of the Securities and Exchange Commission (SEC).

 

The FCPA is jointly enforced by the Department of Justice (DOJ) and the SEC in the United States, applying criminal and civil penalties, respectively.

 

“While most cases under the FCPA and SEC investigations against multinational corporations (MNCs) operating in India have been settled with the SEC by way of paying fines, as of date, only the matter involving Gautam Adani and Sagar Adani, executives of Adani Green Energy, and Cyril Cabanes, an executive of Azure Power Global, continues to be pending as they have chosen the litigation route and are challenging the allegations made against them,” said Ekta Rai, an advocate practising in the Delhi High Court.

 

Companies such as AAR CORP, Deere & Company, and SAP SE have already reached settlements, suggesting that other entities under investigation may follow suit, said Arman Roop Sharma, partner at law firm Anand Sharma & Associates.

 

“These settlements typically involve monetary penalties, corporate governance improvements, and ongoing monitoring,” he added.

 

In October 2024, the SEC announced a settlement with Moog, a New York-based global manufacturer of motion control systems for military aircraft, commercial aircraft, space and defence, and industrial operations, to resolve violations of books and records and internal accounting controls provisions of the FCPA. Moog agreed to pay disgorgement, prejudgment interest, and a civil monetary penalty totalling nearly $1.7 million.

 

“Moog’s case highlights how foreign companies operating in India can face penalties for misconduct through their subsidiaries. Similar cases may emerge involving other firms with Indian operations,” Sharma said.

 

India has emerged as the third most common country targeted for FCPA enforcement, tied with Mexico, since 2010, according to US government data.

 

As per Section 2 of the executive order passed on February 10, 2025, for the next 180 days, the Attorney General will review guidelines for FCPA investigations and enforcement.

 

“During this period, no new investigations will start, existing cases will be reviewed, and any prior or new actions post-review will follow the new guidelines. Remedial measures for past actions may be taken or recommended to the President,” said Akshat Pande, managing partner of law firm Alpha Partners.

 

Experts say that pending FCPA cases involving Indian companies and those with India-related links indicate a growing focus on corruption enforcement, particularly in high-stakes industries such as defence, aviation, and energy.

 

“The outcomes of these cases will likely follow past patterns, including significant financial penalties, disgorgement, and compliance commitments,” Sharma said.

 

“The impact of the suspension on cases relating to India will be that the investigation will be reviewed by the Attorney General and no punitive action will be taken,” said Shashank Agarwal, an advocate practising in the Delhi High Court.

 

The US Presidential Executive Order also mandated a review of existing FCPA cases in light of the updated enforcement guidelines, which are yet to be issued and will likely apply retrospectively, said Kunal Gupta, partner in the white-collar crimes (investigation) practice at law firm Trilegal.

 

“Therefore, pending matters are also expected to experience a halt in investigation and enforcement proceedings. While the order does not currently impact the SEC’s civil enforcement actions concerning new and pending matters, this position may also change in the future,” he said.

 

Nevertheless, as the FCPA continues to be in effect, the possibility of further policy shifts and the risk of prosecution by future administrations remain, he added.

 

“In addition, the halt on FCPA investigations and enforcement will not affect any actions under domestic anti-bribery laws. Therefore, a strong case may be argued that continuing to undertake internal investigations, voluntarily disclosing potential violations, and implementing remedial measures may help companies secure a potential DOJ declination going forward,” he said.

 

List of the SEC’s FCPA enforcement actions in 2024 related to India 

AAR CORP 

An Illinois-based global provider of aviation services and products agreed to pay approximately $30 million in disgorgement and prejudgment interest to resolve FCPA anti-bribery, recordkeeping, and internal accounting controls charges arising out of conduct in Nepal and South Africa.

 

Additionally, Deepak Sharma, a former senior executive at an AAR subsidiary, agreed to pay $184,597 in disgorgement and prejudgment interest, $130,835 of which was deemed satisfied by a forfeiture order with the DOJ, to resolve charges related to the same schemes.

 

According to the SEC orders, from 2015 through 2018, Sharma orchestrated and implemented a bribery scheme to win a contract for the sale of two Airbus A330 aircraft, valued at approximately $210 million, to Nepal Airlines, a government-owned airline. Sharma was also involved in a bribery scheme involving a contract for AAR to provide aviation services to a subsidiary of government-owned South African Airways.

 

Cyril Cabanes 

The SEC charged a former director on the board of Azure Power Global Limited, a renewable energy company based in India, for his alleged role in authorising bribes in connection with a massive bribery scheme to secure multi-billion-dollar energy projects for Azure and Adani Green Energy Limited.

 

BIT Mining 

Formerly known as 500.com Limited, BIT Mining agreed to pay a $4 million civil penalty to resolve charges that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the FCPA from 2017 to 2019 by engaging in a widespread bribery scheme to influence numerous foreign officials, including members of Japan’s parliament, in efforts to establish an integrated resort casino in Japan.

 

RTX Corporation 

Agreed to pay over $124 million in disgorgement, prejudgment interest, and a civil penalty (to be offset by $22.5 million to be paid to the DOJ) to resolve FCPA anti-bribery, recordkeeping, and internal accounting controls charges arising out of conduct in Qatar.

 

Moog Inc 

A New York-based global manufacturer of motion control systems for aerospace, defence, industrial, and medical markets agreed to pay over $1.5 million in disgorgement, prejudgment interest, and a civil penalty to resolve charges related to bribes paid by its wholly owned Indian subsidiary, Moog Motion Controls Private Limited.

 

Deere & Company 

The SEC alleges that from at least late 2017 through 2020, employees of Wirtgen Thailand, a wholly owned subsidiary of Deere & Company, bribed Thai government officials and private company employees to win multiple government contracts and sales. The company agreed to pay nearly $10 million in disgorgement, prejudgment interest, and a civil penalty to resolve FCPA violations.

 

SAP SE 

Agreed to a settled cease-and-desist order for violating FCPA provisions and to pay $98 million in disgorgement and prejudgment interest (to be offset by up to $59 million to be paid to South African authorities).

 

Source: US Securities and Exchange Commission website