US companies can now bribe officials in Nigeria, other countries

US companies can now bribe officials in Nigeria and other countries without fear of repercussions, as the US government has suspended a law that allows it to prosecute its citizens for bribing foreign officials to secure contracts.

On Monday, President Donald Trump signed an Executive Order directing the country’s Justice Department to pause prosecutions under the Foreign Corrupt Practices Act (FCPA), the US law prohibiting American citizens and businesses from bribing foreign government officials to gain or retain business.

The president asked the US attorney general to pause prosecution under this law until a revised enforcement guidance that promotes American competitiveness is issued.

The law, enacted in 1977 under President Jimmy Carter’s administration, applies to US and foreign companies listed on the country’s stock exchanges.

In the past, the law has been used to prosecute businesses involved in corruption activities abroad including in Nigeria.

However, President Trump insisted that the law disadvantages US firms by prohibiting practices common among foreign competitors, creating an uneven playing field.

“Future FCPA investigations and enforcement actions will be governed by this new guidance and must be approved by the attorney general.

“American national security depends on America and its companies gaining strategic commercial advantages around the world, and President Trump is stopping excessive, unpredictable FCPA enforcement that makes American companies less competitive,” Mr Trump’s executive order reads, according to Reuters.

Anti-corruption effort

The suspension of the FCPA will likely increase unethical practices and weaken global anti-bribery efforts, experts say.

The act has been a cornerstone of US anti-corruption policies, holding multinational companies accountable for unethical business practices abroad.

A notable case involving Nigeria was the 2009 prosecution of officials of Kellogg Brown & Root (KBR), a subsidiary of US oil and energy contractor Halliburton, for bribing Nigerian government officials. The US government ordered the company to pay a $402 million fine.

Similarly, in 2023, the US indicted Glencore Plc, a global trading and mining firm, for paying $100 million in bribes to officials in developing countries, including Nigeria, to secure contracts and evade audits.

Outside Nigeria, in 2017, Halliburton was fined $29.2 million for bribing Angolan officials to obtain lucrative deals.

With the FCPA now on hold, there are concerns that enforcement actions will decline and unethical business practices will worsen.

According to Transparency International, the US anti-corruption watchdog, the FCPA made the US a leader in addressing global corruption.

The organisation said Mr Trump’s executive order could pave the way for eliminating the country’s fight against global corruption.