As Europe grapples with a persistent decline in public trust and increasing exposure to high-profile corruption scandals, the European Union is stepping up its efforts to harmonise anti-corruption measures across its member states. The proposed EU Anti-Corruption Directive aims to create a unified legal framework, enhance enforcement tools, and embed robust preventative measures within national policies.
At the same time, shifts in global enforcement—exemplified by President Trump’s pause of the Foreign Corrupt Practices Act (FCPA)—have raised serious questions about the international landscape of bribery and corruption. All in all, businesses should be cautious about the rapidly developing anti-corruption landscape.
The urgent need for an EU anti-corruption Directive
Recent studies estimate that European countries lose approximately €990 billion to corruption every year. With scandals exposing vulnerabilities in the current framework, the need for cohesive and comprehensive anti-corruption legislation has never been more pressing. Traditionally, each EU member state has adopted its own set of laws to combat corruption, creating a patchwork of standards that criminals can easily exploit. This fragmentation not only hinders cross-border cooperation but also enables corrupt practices to flourish in jurisdictions with more lenient regulations.
Key provisions of the EU anti-corruption directive
The proposed Directive, initially unveiled by the European Commission on 3 May 2023, introduces several pivotal measures:
Criminalisation and standardised penalties: New and updated rules aim to criminalise various corruption offences while standardising penalties across the EU, ensuring that no member state serves as a weak link.
Widening the scope of accountability: The Directive proposes to broaden the list of persons of interest. For example, it extends scrutiny to any individual entrusted with tasks of public interest or charged with public service responsibilities, including EU decision-makers such as Commissioners and Members of the European Parliament (MEPs).
Prevention strategies and victim rights: Member States will be required to develop and periodically update national strategies against corruption. The Directive also seeks to introduce robust provisions regarding the rights of victims, ensuring that individuals harmed by corruption have access to justice and compensation.
Sanctions under CFSP: An allocated sanctions regime under the Common Foreign and Security Policy (CFSP) will be established to address major global corruption cases, reinforcing the EU’s commitment to fighting corruption beyond its borders.
The trilogue negotiations—ongoing discussions among the European Parliament, the Council of the European Union, and the European Commission—are critical to finalising the Directive. While the Parliament and Commission have largely embraced an ambitious agenda, some Member States within the Council have attempted to water down certain measures, particularly in areas such as the criminalisation of abuse of office and stringent transparency requirements. This internal tug-of-war highlights the delicate balance between national interests and the collective ambition of the EU to create a robust anti-corruption framework.
The broader context: Divergent global regulations
The fragmented approach to anti-corruption legislation in the EU has created significant disparities. For example, the definition and regulation of lobbying activities vary widely. In countries like Poland, a narrow definition has led to only a handful of individuals being required to register, while in France and Germany, a more comprehensive framework has resulted in thousands of registered lobbyists. Similarly, transparency in political financing is inconsistent, with only a few member states mandating full disclosure of private donors.
Other countries, such as Italy, have recently decriminalised certain abuses of office, further complicating the harmonisation efforts and creating environments where corruption can go unchecked.
These inconsistencies not only undermine the effectiveness of national anti-corruption efforts but also complicate cross-border investigations and enforcement actions. By establishing a common legal framework, the EU hopes to eliminate these loopholes and ensure that all member states adhere to minimum standards of accountability and transparency.
Global implications: Trump’s FCPA pause
In a striking contrast to Europe’s push for stronger anti-corruption measures, the global landscape has been rocked by significant policy shifts in the United States. President Donald Trump’s suspension of FCPA enforcement practices sent a powerful—and controversial—message to multinational corporations worldwide.
On February 10, 2025, President Donald Trump signed an executive order directing the Department of Justice (DoJ) to pause enforcement of the Foreign Corrupt Practices Act (FCPA), a 1977 law prohibiting US companies and individuals from bribing foreign officials to secure business deals. The administration argues that stringent enforcement of the FCPA places American businesses at a disadvantage compared to international competitors who may not adhere to similar anti-bribery standards.
Attorney General Pam Bondi has also directed the DoJ’s efforts away from FCPA enforcement, instead focusing on the risks of foreign bribery related to cartels and criminal networks, which a previous EO by President Trump has designated as terrorist organisations.
While the intention behind this move is to bolster American economic interests, pausing FCPA enforcement introduces significant compliance risks that could outweigh any short-term competitive gains.
FCPA’s impact on European business practices
This relaxation of enforcement in the United States could have profound implications for businesses operating in Europe:
Competitive disadvantage: Companies that adhere to strict anti-bribery measures may find themselves at a competitive disadvantage if rivals in other jurisdictions, particularly those benefiting from a lenient U.S. regulatory environment, adopt more aggressive practices to cut costs or secure contracts.
Undermining global norms: The FCPA has served as a global benchmark for anti-corruption practices. A pause in its strict enforcement risks diluting this benchmark, potentially leading to a “race to the bottom” in corruption standards worldwide.
Erosion of corporate culture: The relaxed stance may also influence corporate cultures, especially in multinational corporations that operate under dual pressures from US and EU regulations. If a significant portion of their operations is governed by lax US enforcement, these companies might be less motivated to invest in robust anti-corruption compliance measures in Europe, creating a risk of a breach in the EU.
Prioritising anti-bribery compliance in an era of regulatory complexity
Establish a clear policy:
Create a detailed, written policy on bribery and corruption, with a strong focus on the entryway to corporate corruption: gifts and hospitality. Define what’s acceptable, including any monetary limits or circumstances that require extra scrutiny, and make sure all employees understand the guidelines.
Implement an approval process:
Introduce a formal process where any offer or acceptance of gifts and hospitality is reviewed and approved by a designated compliance officer or committee. This ensures that no gift or event slips through without proper oversight.
Document everything:
Maintain a robust record-keeping system. Document the details of all gifts and hospitality provided or received—including value, purpose, and the parties involved. This not only provides transparency but also helps in audits and investigations if needed.
Know the legal limits:
Stay updated on local and international anti-bribery laws, as thresholds and regulations can vary by jurisdiction. Regularly review your policy to align with any changes in legislation.
Provide regular training:
Offer frequent training sessions for all employees, focusing on anti-bribery compliance and the specifics of managing gifts and hospitality. Real-life examples and scenarios can help clarify what is and isn’t acceptable.
Conduct risk assessments:
Periodically assess the risks associated with gifts and hospitality in your industry. Identify areas where there might be vulnerabilities, and adjust your policies and controls accordingly.
Encourage a culture of transparency:
Foster an environment where employees feel comfortable reporting any concerns or potential breaches. Having a confidential whistleblower mechanism can help detect and address issues early on.
Review third-party relationships:
Ensure that your business partners, suppliers, and contractors are also compliant with anti-bribery regulations. This might include due diligence processes and contractual clauses requiring adherence to your standards.
