Shift In Foreign Corruption Policy Could Amplify Risk of Extortion for Global Businesses

Trump’s Enforcement Priorities

President Donald Trump has indicated his intent to use the ATA and related statutes in addition to existing tools to combat cartels and other TCOs, even while he has deprioritized FCPA enforcement. In one of his first actions after inauguration, President Trump signed an executive order directing the State Department to designate cartels and other TCOs as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). See, EO 14157 (Jan. 20, 2025).
On Feb. 20, 2025, the State Department designated eight TCOs, including organizations with significant operations in Mexico, Central America, and Venezuela, as FTOs and SDGTs pursuant to the Executive Order. 90 Fed. Reg. 10030 (Feb. 20, 2025).
On Feb. 5, Attorney General Pam Bondi issued a memorandum, “Total Elimination of Cartels and Transnational Criminal Organizations,” that directed the Department of Justice’s FCPA enforcement efforts to “prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs, and shift focus away from investigations and cases that do not involve such a connection.”
Five days later, Trump issued an executive order directing that the Department of Justice (DOJ) “cease initiation of any new FCPA investigations or enforcement actions, unless the attorney general determines that an individual exception should be made.” EO 14207 (Feb. 10, 2025). It appears likely that any exceptions granted by the attorney general will relate to cases with a connection to cartels or TCOs, particularly those that are subject to FTO/SDGT designation.

The Extortion Threat Presented By TCOs

Organized crime and threats of extortion or other harm have long been major concerns for companies operating in Latin America, where security-related expenses and losses due to crime impose considerable financial burdens. According to a 2024 survey by the American Chamber of Commerce Mexico, which polls its member companies:

• 12% of respondents reported that organized crime has taken partial control of their sales, distribution, and/or pricing.
• 49% stated that their trucks had been attacked.
• 45% reported receiving demands for protection payments.

These figures highlight the widespread and persistent nature of the problem.
TCOs also have corrupted many government officials in Latin America, as reflected by the recent federal indictments and prosecutions of many leaders arising out of unlawful relationships with TCOs, including the former President of Honduras; the leadership of Venezuela; and the governor of Mexico’s Tamaulipas State.
Moreover, in some places with weak or corrupted governments, TCOs have assumed state-like functions, providing public protection and other public services.