With some around the world still in a state of shock over the election of President Trump we have had little time to think about what the compliance implications may be. Whilst his acceptance speech was short on policy there could be some compliance ramifications. In the coming days seasoned Trump-watchers are likely to have more to add on the likely compliance agenda for 2017 and there are people in the US better placed to comment. With that in mind however here’s some quick initial thoughts:
President-elect Trump has previously been a critic of the US Foreign Corrupt Practices Act of 1977 (FCPA) and in particularly what he seems to suggest has been an over-aggressive enforcement strategy adopted by previous US administrations. In 2012 for example he spoke out about the FCPA action against Walmart over its payments in Mexico. He said that the law was a “horrible law and it should be changed” and that it disadvantaged US corporations, despite the fact that US corporations currently only make up three of the top ten FCPA largest enforcement actions. Whether President Trump will want to repeal the FCPA is probably a more long term question. More likely in the short term could be a damping down of the enforcement regime – FCPA’s early history was not one of aggressive enforcement and there could be a possible return to that strategy. How this would square against an election promise to clamp down on corruption and his supposedly “crooked” opponent however remains to be seen. President-elect Trump also hinted on Twitter as recently at 18 October 2016 that corruption would be one of the core elements of his term in office tweeting “and now bribery? So CROOKED. I will #draintheswamp”.
Any reduction in FCPA activity could cause implications with cross-border enforcement. The Director of the Serious Fraud Office, David Green, hinted today that there would need to be a reassessment of the working relations between the SFO and the US authorities if that happened saying “I suppose if there was a policy of less enforcement, then our relationship would have to be reassessed”.
We have talked in our Privacy Shield FAQs about the many challenges that Privacy Shield faces. One of the issues that we highlighted from the very start was the fact that in some respects Privacy Shield relies on executive actions, including Presidential Policy Directive 28, which could be overturned by any new President. If the new administration feels unable or unwilling to give the promises that the Obama administration gave Privacy Shield faces a rocky future. As we have outlined in our FAQs it is already subject to various legal and regulatory challenges and it is also subject to annual review. The fact that there is a new administration must add to the uncertainties Privacy Shield faces.
But what is the likelihood of the new President overturning President Obama’s work? President-elect Trump’s views on the NSA are hard to determine at this stage. On 26 October 2013 he tweeted “can you imagine the anger and disgust when the heads of other countries found out that their cell phones were being tapped by NSA. Obama mess”. He had however seemingly suggested that the NSA extend their powers on 23 October 2013 when he said “why doesn’t President Obama call upon the NSA to fix the badly broken website – then they could spy on all of the many cheaters and arrest them!”. On 27 July 2013 he had also seemingly supported Edward Snowden saying “#snowden not a traitor. Shared info with fellow Americans who have a right to know about NSA snooping [expletive deleted]”.
President-elect Trump’s businesses have also not been clear of privacy issues. In August 2016 a UK newspaper claimed that one of his golf resorts in Scotland had admitted it had failed to comply with UK data protection laws although the resort claimed that the failure was a “clerical error” rather than a deliberate attempt to avoid its legal obligations.
Whatever the new President’s views he is likely to need to act swiftly once he assumes office to give Privacy Shield any hope of a lasting future. However speaking in Brussels on 9 November 2016 the Chairwoman of the US Federal Trade Commission, Edith Ramirez said that she felt that the Trump administration was unlikely to make dramatic changes on privacy and data security enforcement given the concerns about privacy amongst US voters “with any change in administration, there are always going to be, of course, shifts and different approaches taken” she said “but I believe there will be a continued emphasis placed on these very important issues. I certainly know, from my work at the FTC, that these are issues that are of significant importance to American people”.
A feature of the election has been a possible review of America’s relations with Russia. This could have implications for the US sanctions regime – again however there are some inconsistencies. On 4 October 2016 President-elect Trump said that Mrs Clinton’s “close ties to Putin” deserved scrutiny. He has also made allegations of connections between people in the Clinton camp and President Putin. If there is to be a thawing of relations with Russia a review of the sanctions regime could be one way of signalling a desire to move on from the past.
Clearly it is very early to be making predictions as to how the world of global compliance will change. Other election statements – like the lack of evidence of climate change – could drive additional policy changes. It would be fair to say however that the new administration is likely to be less predictable than the Obama administration and that in itself means that organisations are going to have to invest more in compliance awareness and planning.
For more information please contact Jonathan who is a lawyer with Cordery in London where his focus is on compliance issues.
Office: +44 (0)207 075 1784
*Tweets courtesy of Trump Twitter archive
We are grateful for the team at MLex (mlex.com) for some of the information contained in this alert.