Why XPeng Employees Need to Pay Attention to Trump Enforcement Activities

For employees at Chinese companies like XPeng it is important to understand how the Trump Administration’s enforcement of anti-corruption, sanctions and money laundering regulations can affect you. Even in prior administrations, China and Chinese companies have been a favored target of U.S. regulators. The Trump Administration’s ‘America First’ approach to regulation likely means an increase in scrutiny on foreign companies, which can also lead to further scrutiny on employees at those companies. While this may sound worrying, there is good news: Despite a renewed focus on foreign companies, the Trump Administration has shown a commitment to supporting and rewarding whistleblowers, even foreign whistleblowers. This means that there are more opportunities than ever for employees to anonymously report misconduct through U.S. whistleblower programs, and potentially earn a reward for doing so. 

Trump Administration Targeting Foreign Companies 

The Trump Administration, through the Department of Justice (DOJ), has sought to overhaul law enforcement priorities. While much of this focus has been domestic, a number of developments directly affect employees at non-U.S. companies.

Of note, the Administration has expressed concern that foreign companies gain a competitive advantage over U.S. companies through non-compliance:

“The most blatant bribery schemes have historically been committed by foreign companies” (Department of Justice (DOJ) guidelines on FCPA prosecution)

Although not explicitly stated, the DOJ has closed several major investigations into U.S. companies while leaving open those into foreign companies. As a result, we believe foreign companies will face increasing regulatory scrutiny during this Administration, and that scrutiny can reach individual employees.

XPeng employees should pay close attention to these developments. More so than other company, because XPeng has U.S.-listed securities. This means that XPeng employees are potentially subject to a number of U.S. laws that colleagues in other Chinese companies are not. These include:

• The Foreign Corrupt Practices Act (FCPA);
• U.S. sanctions laws; and
• Anti-money-laundering/Bank Secrecy Act (AML/BSA) rules.

While all XPeng employees could be affected by these developments, white-collar employees in sales, business development, compliance or internal audit have a higher likelihood of encountering issues such as: 

• Payments or business involving foreign officials where there is a risk of bribery or kickbacks (FCPA)
• Transactions processed or cleared that involve third parties that pose a risk of involving sanctioned entities or jurisdictions
• Internal controls or compliance programs that fail to monitor or escalate unusual transactions, particularly where they touch U.S. persons or U.S. financial infrastructure (AML/BSA).
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