Impact of political transitions on anti-corruption efforts and compliance

With elections, political transitions, and changing priorities in key jurisdictions across the globe, businesses will need to adapt to a shifting political, ideological and legal environment. 

This evolving political landscape will undoubtedly have an impact on the enforcement of financial crime measures and the compliance strategies employed by corporations globally.  Anti-bribery and anti-corruption (ABAC) compliance has long been an area of legal examination, but the growing politicisation of enforcement is likely to add new complications to an already demanding area of law. 

This article provides a critical analysis of the key political transitions that may affect anti-corruption policy in 2025.

Political Transitions and Their Impact on Anti-Corruption Enforcement

The United States: A Potential Shift Towards Geopolitical Enforcement

In the U.S, the Foreign Corrupt Practices Act (FCPA) has long been a foundation of global anti-corruption enforcement. However, the political rhetoric surrounding the FCPA during President Trump’s first tenure led to concerns that his administration might weaken enforcement of this critical law. The beginning of his second term has further raised new uncertainties, especially given the potential for the FCPA to be utilised in support of broader foreign policy objectives. Buoyed by his election victory, he signed an executive order directing the DOJ to halt prosecuting Americans accused of bribing foreign government officials to win business.

The order instructs the U.S. attorney general to pause prosecutions under the Foreign Corrupt Practices Act of 1977 until revised enforcement guidance that promote American competitiveness are issued.

According to the White House, the FCPA puts U.S. firms at a disadvantage to foreign competitors because they cannot engage in practices that are “common among international competitors, creating an uneven playing field.” However, adopting this policy in favour of U.S. exporters may well contrast starkly with U.S. laws being leveraged as a geopolitical tool to make it more difficult for foreign products and services to be imported. 

The U.S. government may initiate investigations with less robust evidentiary requirements, potentially using corruption charges to advance goals other than pure law enforcement, namely those with political or economic outcomes. This "weaponisation" of law may not only assist a protectionist economic policy but could lead to the targeting of foreign nationals or entities, even in the absence of substantive evidence of corruption. 

For non-U.S. businesses wanting to do business in the U.S., this could signal increased scrutiny - particularly for foreign officials or companies seen as adversaries to U.S. interests.

Moreover, this shift in enforcement priorities could have implications for corporate compliance strategies, particularly with respect to the due diligence required when entering new markets or dealing with foreign entities. 

Germany: Strengthening Anti-Corruption Laws in the Face of Electoral Pressures

Germany is similarly facing significant economic pressures and political upheaval. According to the UK House of Commons Library, UK GDP in Q3 2024 was 2.9 percent above its pre-pandemic level of Q4 2019. This compares with Eurozone GDP being 4.6 percent higher, with GDP in Germany only 0.1 percent higher. As a consequence of this economic slow-down and a potential shift to the right, namely through the AFD party, future German policy on ABAC may be pulled in two completely opposing directions. As with the U.S., this may encourage a more protectionist, alleged pro-Germany first economic policy, challenging the influence of the EU. 

The Council of Europe’s Group of States Against Corruption (GRECO) and the Organisation for Economic Co-operation and Development (OECD) have both issued negative assessments of Germany’s anti-corruption enforcement, citing insufficient implementation of international anti-bribery conventions and a lack of fulfilment with anti-corruption standards.

In response to these concerns, Germany has introduced key legislative reforms, including a new criminal offence for improper lobbying under Section 108f of the German Criminal Code. This reform is aimed at addressing the growing unease over the unlawful advocacy of interests by elected officials. These measures signal a marked effort to enhance transparency and integrity in political processes, though their practical enforcement will likely depend on the outcome of the approaching elections. 

The future direction of anti-corruption enforcement in Germany will largely depend on the political priorities of the new government, which may either accelerate or delay the implementation of additional changes, such as the German Money Laundering Act and the Combatting Financial Crimes Act. A shift to the right may see little advancement in the implementation of stronger ABAC laws against German businesses. However, pressure on importers may increase - notwithstanding Germany’s obligations to comply with EU laws.

The United Kingdom: A Push for Corporate Transparency and Enhanced Enforcement

The appointment of Baroness Hodge as the Anti-Corruption Champion in December 2024 indicates the UK government’s renewed commitment to tackling corruption in both the public and private sectors. Baroness Hodge's leadership is expected to shape the UK’s anti-corruption agenda moving forward, particularly with the implementation of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). 

However, some would argue that the new UK Government is walking a tightrope in promoting issues such as greater anti-corruption enforcement while simultaneously encouraging a loosening of regulatory controls.  

The ECCTA represents a considerable step towards increasing corporate transparency, particularly in the realm of company formation and ownership disclosures. Effective February 2025, the Registrar will gain new powers to query and reject false or suspicious information on the register; reforming and streamlining the process for striking off companies that have been created for illegal purposes. This should enhance the UK’s ability to combat corporate secrecy and reduce the risk of corruption through shell companies.

Additionally, the UK is set to implement the Failure to Prevent Fraud offence in September 2025. This new offence will impose liability on corporations that fail to demonstrate that they have adequate procedures in place to prevent fraud. Failure to comply may expose relevant companies to significant reputational and commercial risk. However, they will also come at a cost – at least in the short to mid-term.  

Many would argue that a more robust anti-corruption message does more good than harm for business as it encourages confidence in doing business with those playing by the rules. 

President Trump may not support this view.

International Cooperation in Anti-Corruption Enforcement

Worldwide cooperation among enforcement agencies has become essential to combat cross-border corruption. The UK, for instance, continues to enhance its collaborative efforts under the Crime (International Co-operation) Act 2003, which allows prosecutors to request evidence from foreign jurisdictions for use in domestic proceedings. However, as the political climate shifts, will we see a reversal of this?

The Serious Fraud Office (SFO), for example, has made notable strides in international collaboration. Its strategic vision for 2024-2029 emphasises global cooperation and seeks to strengthen the SFO’s reputation as a thought leader in anti-corruption enforcement. One successful example of this is the 2020 Deferred Prosecution Agreement with Airbus, which involved cooperation between authorities in the U.S., France, Sri Lanka, Malaysia, and Indonesia.

For businesses engaged in international operations, greater global cooperation will remain a vital part of their operations as anti-corruption enforcement will increasingly involve joint investigations and prosecutions.

Corporate Challenges and Compliance Strategies

The Growing Role of Whistleblowing and Anti-Corruption Clauses in Corporate Contracts

With the increasing emphasis on corporate transparency, albeit with fairly mixed results, companies are incorporating anti-corruption clauses into sales and service contracts to proactively mitigate bribery risks. These clauses normally outline specific compliance expectations and instruments for reporting violations. Companies should ensure that such clauses are drafted with care and that they align with both local and international anti-corruption laws to avoid potential liability.

Moreover, we are also seeing growing recognition of the importance of incentivising whistleblowers. The DOJ’s Corporate Whistleblower Awards Pilot Program was a clear hint that the U.S. wanted increased reporting of corporate misconduct at a high level. However, with President Trump’s arrival this may be a case of ‘watch this space.’ In the UK, the current Government has similarly suggested that enhanced protections for whistleblowers would be introduced - potentially with financial incentivisation. 

Conclusion: Preparing for an Evolving Landscape

2025 has already shown itself to be politically and economically volatile. Legal professionals must be prepared for a rapidly changing business environment including anti-corruption landscape. The shifting priorities in the U.S., Germany, and the UK underscore the need for businesses to reassess their existing approaches to compliance.

Corporations, in particular, must be flexible within this politicised legal environment. Companies will similarly need to adapt to significantly changing rules of engagement. The compliance roadmap is difficult to predict as national interests become more important than international initiatives. 

We continue to advocate the need for robust internal controls, comprehensive due diligence procedures, and effective methods for reporting misconduct. However, having ‘Global Compliance Policies’ may become ever more difficult to implement for businesses. Close collaboration with legal advisors will therefore be essential in what is likely to be very choppy waters throughout 2025 and beyond.