S. 985: Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025

This bill, titled the "Prevent Regulatory Overreach from Turning Essential Companies into Targets Act of 2025," seeks to prohibit influential entities, particularly those in the extractive and manufacturing sectors that are crucial to U.S. national interests, from complying with certain foreign sustainability regulations. Specifically, it targets regulations like the Corporate Sustainability Due Diligence Directive from the European Union.

Key Provisions

• Definition of Entities: The bill defines "entities integral to the national interests of the United States" as those doing business with the Federal Government, generating significant revenue from extracting or manufacturing raw materials, or involved in national defense.
• Prohibition on Compliance: These entities are generally prohibited from complying with foreign sustainability due diligence regulations, including assessments and reporting on environmental or social impacts unless they fall under specific exceptions.
• Exceptions: Entities can still undertake actions necessary to comply with U.S. laws or conduct ordinary business activities without violating this prohibition.

Petition Process for Hardship Relief

Entities that feel they may suffer undue hardship due to the law can petition the President for an exemption. The President must respond within 30 days, granting or denying the request and providing reasons for the decision. Factors the President will consider include the economic impacts on the entity and the U.S. economy as a whole.

Protection Against Adverse Actions

The bill prohibits adverse actions against these entities for complying or not complying with foreign sustainability regulations. Any foreign judgment against them relating to these regulations will not be recognized in U.S. courts unless specifically provided for by Congress.

Enforcement and Penalties

• President's Enforcement Powers: The President is empowered to protect U.S. entities from adverse actions related to foreign regulations.
• Civil Actions: Entities can pursue civil actions if they face violations of these protections. Courts may award various forms of relief, including compensatory damages.
• Punishments for Violations: Violating the prohibition could result in civil penalties up to $1 million, and the entity may be barred from federal contracts for a certain period.

Relevant Companies

• XOM (Exxon Mobil Corporation) - Likely to be affected as a major player in extracting fossil fuels, facing restrictions from compliance with foreign sustainability regulations.
• CVX (Chevron Corporation) - Similar to Exxon, Chevron is deeply involved in fossil fuel extraction and might be impacted by non-compliance with EU sustainability directives.
• FCX (Freeport-McMoRan Inc.) - Engaged in mining, and could face implications regarding sustainability assessments required by foreign regulations.
• NEM (Newmont Corporation) - A leading mining company that could be subject to restrictions based on this bill's stipulations regarding foreign compliance.
• PKG (Packaging Corporation of America) - A manufacturer that could be implicated if the bill affects compliance requirements related to the sustainability of the manufacturing process.