Robert Appleton Featured in RANE Network Article on How Trump’s Designation of Cartels as FTOs Raises Legal and Compliance Risks for Global Businesses

Olshan white collar litigation partner Robert Appleton was featured in a RANE Network article entitled “Trump’s Designation of Cartels as FTOs Raises Legal and Compliance Risks for Global Businesses.” In the article, Bob explains that the U.S. has intentionally developed relationships with authorities abroad to coordinate in investigating priority cases. The U.S. has spent two decades nurturing these relationships, particularly in Europe, Latin America, Australia and Africa, all of whom have become very close partners in cross-border criminal cases, and Bob warns that severing them will make bringing cross-border cases more challenging. Reflecting on his experience conducting export trade, international money laundering, and international fraud and corruption prosecutions in the DOJ, Bob remarks that he regularly needed to work closely with authorities from multiple countries to gather evidence and he questions the ability of the U.S. to pursue cases involving priority issues like immigration and cartels without Mexico’s willing involvement and participation. The concern is compounded, he says, when he imagines how tariffs might factor into the equation, adding that he cannot imagine these authorities will be too disposed to help in a timely and comprehensive manner. Furthermore, Bob believes non-U.S. regulators may increase white-collar crime investigations and enforcement proceedings to fill the void left by the U.S. In this event, U.S. companies may be targeted to maintain a level playing field since the DOJ has indicated that it may still wield the FCPA to target foreign companies paying bribes to obtain resources deemed by the administration to be of national or economic security to the U.S. Bob notes that EU regulators have already signaled that they are gearing up to increase enforcement in money laundering and cross-border fraud, although he is less confident in their ability to prosecute sophisticated corruption cases as these non-U.S. enforcement bodies have significantly smaller budgets, fewer resources, limited extraterritorial laws to address cross-border crime and less-developed infrastructure. This may give rise to more cases brought against individuals, as it is generally easier for the European Union to bring cases against individuals than companies due to the legal standing of individuals and the complexity of corporate structures, which can make it harder to pinpoint responsibility and enforce legal actions. While the U.S. may be retreating from robust FCPA enforcement for now, Bob says companies should remain mindful of both the FCPA’s five-year statute of limitations, extending beyond this current administration, and the potential rise in prominence of anti-corruption laws of other countries and non-U.S. enforcement. He explains that he has clients who have spent years developing robust anti-corruption and AML compliance programs who are now, considering Trump’s EO, wondering if they should maintain these compliance efforts. The consensus in the legal community, Bob notes, is that they should because the FCPA has a statute of limitations that is longer than the current presidential administration, and, should the next president hold a different position on anti-corruption priorities than Trump, it might aggressively target FCPA violations to make up for the gap in enforcement. He warns that Trump’s deprioritization of FCPA enforcement for domestic companies will not be an adequate defense in the event of any future prosecution, as an executive order does not invalidate a statute passed by Congress. Lastly, Bob recommends that organizations be especially diligent in hiring decisions and personnel, and ensure they know their counterparties. He reminds companies that sanctions are still in place and that he expects this administration will actively use them as a tool to forward its goals.