H.R. 9385: Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2026

This bill would bar certain U.S.-based companies from complying with foreign sustainability due diligence regulations. In plain terms, it would stop covered companies from following foreign laws that require them to:

• review the environmental or social effects of their operations or supply chains,
• take steps to address any problems found, and
• report on those findings and actions.

Who would be covered

The bill applies to an “entity integral to the national interests of the United States”, which includes:

• any partnership, corporation, LLC, or similar business organized in a U.S. state, territory, or the District of Columbia that does substantial business in the United States, and
• any other business the President identifies as important to U.S. national interests.

Which foreign laws are covered

The bill would cover foreign sustainability rules generally, and specifically includes the European Union’s Corporate Sustainability Due Diligence Directive, along with any successor or precursor versions of that directive adopted by EU institutions or member countries. It does not apply to foreign rules that are substantially similar to a U.S. law passed by Congress.

Main restriction

Covered companies would generally be prohibited from complying with these foreign sustainability due diligence rules. However, the bill says they may still take actions that are lawful under U.S. law or that they do in the ordinary course of business, including responding to requests from consumers or investors.

Exemptions

A covered company that believes the prohibition would cause it particular hardship could petition the President for an exemption. The bill says such petitions are generally supposed to be granted, unless the President denies one within 30 days by issuing a written explanation saying the exemption would be contrary to the national interests of the United States. In deciding whether to deny a petition, the President must consider things like:

• whether the company would be unable to participate in supply chains for products needed in the U.S.,
• possible local or regional economic and job impacts,
• the direct or indirect effects on the United States, and
• whether denial would prevent the company from divesting from a business in a jurisdiction subject to the foreign rule.

Protection from retaliation and enforcement

The bill would also prohibit anyone from taking adverse action against a covered company because of action or inaction related to a foreign sustainability due diligence regulation. In addition, U.S. courts would not recognize foreign court judgments against covered companies that arise from these foreign sustainability rules, unless Congress later provides otherwise.

The President would be directed to take whatever action is considered in the public interest to protect covered companies from adverse action tied to these foreign rules, taking into account effects on U.S. consumers, businesses, economic/energy/environmental security, and foreign relations.

Violations of the bill or any regulations issued under it could result in a civil penalty of up to $1,000,000.

Relevant Companies

Potentially affected publicly traded companies could include large U.S. companies with significant operations or supply chains in Europe or other jurisdictions that use sustainability due diligence rules, such as:

• XOM — Exxon Mobil Corporation: could be affected if foreign sustainability rules would otherwise require changes to its operations, supply-chain reporting, or due diligence processes abroad.
• CVX — Chevron Corporation: could be affected in a similar way for overseas operations and reporting obligations.
• BA — The Boeing Company: could be affected through foreign supply-chain compliance and reporting requirements.
• F — Ford Motor Company: could be affected by foreign due diligence rules tied to manufacturing and supply chains.
• GM — General Motors Company: could be affected by foreign sustainability compliance requirements for global operations and suppliers.
• WMT — Walmart Inc.: could be affected through requirements related to global sourcing and supply-chain disclosures.
• AMZN — Amazon.com, Inc.: could be affected through overseas logistics, suppliers, and reporting obligations.
• MSFT — Microsoft Corporation: could be affected indirectly through supply-chain and vendor due diligence rules, especially for data center and technology infrastructure projects.
• GOOGL — Alphabet Inc.: could be affected if foreign rules apply to supply chains, operations, or contracted services in Europe.