What Is the Foreign Corrupt Practices Act?
The Foreign Corrupt Practices Act (FCPA) is a federal law that bars U.S. companies from bribing foreign officials to win or keep business. It reaches Metro Detroit auto suppliers building in Mexico, defense contractors bidding on foreign government work, and freight companies crossing the Ambassador Bridge.
Chapman, Dowling & Mallek advises companies nationwide on FCPA defense. Our Detroit corporate compliance lawyer gets involved before and after a problem surfaces.
Where Does Automotive Supply Chain FCPA Risk Come From?
Bribery cases seldom begin with an executive handing over cash. They often begin with someone your company pays to work abroad, which is why third parties matter in cross-border compliance. Outside parties that can create exposure include:
- Freight forwarders
- Foreign customs brokers
- Overseas distributors
- Local sales agents
Say a broker pays a customs official to lower the duty on a load of auto parts. Your Michigan headquarters can be held responsible if it knew about the payment or ignored clear warning signs. The law has a narrow exception for small payments that expedite routine tasks, but it does not cover payments that influence an official’s decision.
What Are the Foreign Corrupt Practices Act Penalties?
Penalties depend partly on what your company did before trouble started. Prosecutors review your compliance program when deciding on charges, and the Justice Department’s FCPA compliance program guidelines ask about:
- Screening of agents and distributors
- Anti-bribery training for staff
- Rules for personal phones and messaging apps
When a case is charged, a company can be fined up to $2 million per bribery violation under 15 U.S.C. § 78dd-2, and an officer or employee can face up to five years in prison. Tips can start these cases, since the SEC pays whistleblowers 10% to 30% of penalties over $1 million.
How Has FCPA Enforcement Changed?
Federal FCPA enforcement shifted in 2025. In February, an executive order paused new FCPA enforcement while the Justice Department reviewed its approach. In June, the department issued new guidelines that focus on cases involving drug cartels and transnational criminal organizations, serious bribery schemes, and misconduct that harms U.S. companies or national security. Prosecutors were also directed to focus on individuals rather than routine business practices.
The law itself has not changed. Bribing a foreign official is still a federal crime, and the SEC can still bring civil cases against public companies. Most FCPA charges must be brought within five years, so payments made today could still be prosecuted later under different enforcement priorities. A strong compliance program remains the best protection for Michigan companies doing business abroad.
FCPA Questions From Michigan Suppliers and Buyers
Two questions come up often for Southeast Michigan manufacturers, and both have direct answers.
Does the FCPA Apply to Private Tier-1 and Tier-2 Suppliers in Michigan?
Yes, it does. The bribery rules cover every U.S. business, public or private, along with its owners and employees. Only the accounting rules are limited to publicly traded companies.
What Happens if We Discover an FCPA Violation During a Merger?
You may avoid prosecution if you report it. The Justice Department’s safe harbor policy for corporate acquisitions. gives a buyer six months after closing to report the misconduct and one year to fix it. A buyer that also cooperates is presumed to avoid charges, though it must give up profits tied to the misconduct.Confirm the current terms with counsel, since the Justice Department revised its corporate enforcement policies in 2025.
Have Our Detroit Corporate Compliance Lawyer Review Your Overseas Operations
A new plant in Mexico, a foreign bid, or a letter from federal investigators is a good reason to have your program checked. Former federal prosecutor Ron Chapman leads our team, and our attorneys work closely with your in-house staff and investigators. Call or text the 24-hour hotline at (346) 242-7626, or contact us online to schedule a free consultation with Chapman, Dowling & Mallek.