What does the anti-regulation bent of the Trump administration mean for three of the most talked about cross-border enforcement initiatives of the last decade: anti-corruption, anti-money laundering and economic sanctions?

Crystal ball gazing is a favorite Washington pastime usually guided by a combination of hope and self-interest and is generally no more accurate than blindfolded dart throwing. However, in this case we think there are two reasons why our prediction -to expect continued robust enforcement - is right. First, each of these enforcement intiatives has been reinforced by high evolved compliance regimes that have become embedded in the best-practice expectations and oversight infrasturctures of well-run businesses. Second, the Trump administration acknowledges and embraces the fact that these laws are at the core of enforcement efforts to "level the playing field" for American companies and retard foreign competitors' ability to use fraudulent conduct to enhance corss-border business. 

Many of the most celebrated enforcement actions of the last decade were not developed by prosecutors but rather were the product of whistleblowers and self-reporting based on internal compliance procedures. The result is that today fraudulent conduct is increasingly identified and exposed without government initiation. While there is frequent debate about whether these "self-reporting" expectations should be carved back, robust compliance has become "good governance" and whistleblowing is part of the new reality for global business. In sum, the pipeline for corruption, money laundering and economic sanctions cases is virtually out of the administration's control and it is unlikely that relevant authorities will turn their back on fraudulent conduct once exposed. Similarly, the public has come to expect a well-run business will develop and deploy meaningful compliance policies- whether to catch financial fraud or to protect the markets from crisis- and it strains credulity to think that anything will change that public expectation and the pressure it creates for commitment by businesses.

Furthermore,  nothing we have seen from  the Trump administration  causes us to anticipate  a  radical departure from  the decades-long trajectory towards increasingly robust enforcement in these  areas.   From the Attorney General down,  FCPA enforcement  has been singled  out as  a priority.   On April  24, 2017, Attorney General Jeff Sessions said that the  FCPA is a "critical"  enforcement priority for the  Department of Justice.   Sessions specifically stated that the  Department of Justice will continue to strongly enforce the  FCPA and other anti-corruption  laws.   Sessions said that the  DOJ wants to  "create  an even playing field for law-abiding companies"  because  corruption  "harms free competition,  distorts  prices and  often  leads to substandard  products and  services coming into this country."

The same  level  playing  field  principles  apply for anti-money laundering  and  economic sanctions enforcement.   Anti-money laundering  enforcement identifies and  penalizes wrongdoers by seizing their ill- gotten gains.   In this respect, the financial  system  plays a critical  role  in the global  fight against corruption  and terrorism - one of the current administration's top priorities - by identifying  suspicious transactions and bringing them  to  light.

Similar to AML  and  FCPA,  sanctions enforcement is the punishment of those  who seek to undermine economic policies  established  by the  current administration to punish  rogue  nations whose policies are viewed  as  a danger to the country.   One  need  only remember the "Panama  Papers"  scandal,  a  massive data  leak spotlighting the  use  of off-shore  and  shell  corporations for money laundering  and tax and  economic sanctions evasion, to be reminded that scrutiny of cross-border transactions is  not simply the  domain  of government inquiry.   And  as with that scandal,  once disclosed, enforcement  is  impossible to avoid.   Given the stated positions of the Trump administration,  it is  hard to believe that they will turn a  blind eye toward institutions doing  business with  money launderers,  aiding the bomb  building objectives of countries  like  North  Korea, or failing to  identify transactions that fill the coffers of terrorist organizations  like  ISIS.

So what does this mean?   Punishing  bad actors  is always good  politics.   From  our perspective, the Trump administration's  rhetoric about scaling  back regulation has nothing to do with  enforcement and  is  unlikely to meaningfully impact regulations viewed  as critical to advancing  administration  objectives.  Although the enforcement priorities of the current administration  may continue evolving,  we see  no evidence that the requirements for meaningful  compliance  oversight, backed  by enthusiastic enforcement,  are  going  away anytime soon.

The best strategy for looking  around the enforcement corner  remains  investing  in  comprehensive compliance programs and  undertaking  serious  internal  investigations when  circumstances  merit.   Compliance with  anti-corruption,  anti-money  laundering  and  economic sanctions  is a  cost of doing  business in  a  globalized economy.   The challenge  is to integrate a compliance program that effectively decreases  risk while at the same time  furthering  business objectives.   Adopting well-crafted,  risk-based  processes  and  procedures that are robustly implemented  by compliance staff and monitored  on an ongoing basis will continue to be the right way to  meet this challenge  by adding value to the business overall and  enhancing the  effectiveness of existing  compliance  procedures.