New Executive Order Seeks to Combat “Overcriminalization in Federal Regulations”
Client Alert | May 16, 2025
Gibson Dunn is monitoring regulatory developments and executive orders closely. Our attorneys are available to assist clients as they navigate the challenges and opportunities posed by the current, evolving legal landscape.
On May 9, 2025, President Trump signed an Executive Order aimed at combatting “overcriminalization in federal regulations.” Reviving an Executive Order that was issued in the last days of the first Trump administration and quickly revoked by President Biden, the new Executive Order seeks to prevent “abuse and weaponization” of criminal regulatory offenses against “unwitting individuals” who lack the “privileges [of] large corporations, which can afford to hire expensive legal teams to navigate complex regulatory schemes and fence out new market entrants.” To advance that goal, the Executive Order is meant to “ease the regulatory burden on everyday Americans and ensure no American is transformed into a criminal for violating a regulation they have no reason to know exists.”
This new Executive Order is likely to lead to fewer U.S. Department of Justice (DOJ) criminal investigations and enforcement actions related to whether an individual or corporation acted in violation of a regulation, especially for individuals accused of strict-liability offenses. But the Executive Order, in combination with the reorganization of certain DOJ components, also may result in more aggressive investigations and severe punishments in those criminal regulatory actions that do proceed. As discussed in this alert, companies should closely follow the agency announcements directed by the Executive Order to assess criminal regulatory enforcement risks; engage with agencies to advocate for clearer and reduced enforcement approaches; and address allegations that could give rise to continuing risk under the Executive Order. Further analysis of the broader enforcement landscape, including consideration of DOJ’s recently announced enforcement priorities, can be found in Gibson Dunn’s forthcoming alert.
Policy: The Executive Order states that “it is the policy of the United States” that “[c]riminal enforcement of criminal regulatory offenses is disfavored,” except as to “the enforcement of the immigration laws or regulations” or “laws or regulations related to national security or defense.”
“Prosecution of criminal regulatory offenses,” the Executive Order explains, “is most appropriate for persons who know or can be presumed to know what is prohibited or required by the regulation and willingly choose not to comply, thereby causing or risking substantial public harm.” Thus, “[p]rosecutions of criminal regulatory offenses should focus on matters where a putative defendant is alleged to have known his conduct was unlawful.”
The Executive Order “disfavor[s]” criminal enforcement of “strict liability offenses” for violations of regulations—a scenario that “allows the executive branch to write the law, in addition to executing it”—and states that “agencies should consider civil rather than criminal enforcement” in such instances, “if appropriate.”
The Executive Order also provides that agencies promulgating regulations “should explicitly describe the conduct subject to criminal enforcement, the authorizing statutes, and the mens rea standard applicable to those offenses.”
Directives: Federal agencies are required under the Executive Order to take the following actions:
- Report on Criminal Regulatory Offenses—Each agency must identify in a public report all criminal regulatory offenses enforceable by the agency or DOJ, with the applicable mens rea standards and potential criminal penalties for each offense. The Executive Order “strongly discourages” criminal enforcement of any offense not identified in these reports.
- Promote Regulatory Transparency—In promulgating new rules, agencies must identify any potential criminal implications for a violation of the rule and “explicitly state a mens rea”
- Establish a Default Mens Rea for Criminal Regulatory Offenses—Each agency, in consultation with the Attorney General, must “examine the agency’s statutory authorities and determine whether there is authority to adopt a background mens rea standard for criminal regulatory offenses that applies unless a specific regulation states an alternative mens rea.”
- Publish Guidance on Criminal Referrals—By June 23, 2025, agencies are required to publish guidance outlining the factors considered when referring regulatory violations to the DOJ for criminal enforcement. The Executive Order notes that agencies should consider factors such as the harm caused; the defendant’s gain; and whether the defendant had specialized knowledge, licensure, or general awareness of the unlawfulness of his or her conduct.
Historical Context: As noted, the new Executive Order mirrors President Trump’s January 2021 order titled “Protecting Americans from Overcriminalization through Regulatory Reform” (EO 13980),[1] which was intended to shield Americans from “unwarranted criminal punishment for unintentional violations of regulations.” That prior order required agencies to make explicit the mens rea element of criminal offenses and to focus enforcement on individuals who “know what is prohibited or required by the regulation and choose not to comply.” It also similarly stated that strict liability offenses were “disfavored” and that administrative or civil remedies should be pursued instead, “when appropriate.”
The new Executive Order also reflects ongoing legislative debate. Dating back to 2015, various Republican Senators and Representatives have proposed legislation seeking to establish a default mens rea standard for criminal offenses that lack an expressly required state of mind. Most recently, Representative Andy Biggs (R-AZ-5) introduced the Mens Rea Reform Act of 2025, H.R. 59, which, like its predecessors, would “establish [ ] a default mens rea standard . . . for federal criminal offenses—statutory and regulatory—that lack an explicit standard.” The bill is currently pending in the House Judiciary Committee.
Potential Enforcement Implications: It is uncertain what effect the new Executive Order will ultimately have on enforcement actions, especially those involving corporations, but we expect that it may result in fewer but more severe regulatory prosecutions.
The specific terms of the Executive Order afford plenty of leeway for corporate enforcement actions. By its terms, the Executive Order is focused on avoiding the prosecution of “unwitting individuals” for violations of regulations “they have no reason to know exist,” and contrasts such individuals with “large corporations” that “can be presumed to know what is prohibited or required by [a] regulation.” The Executive Order is also seemingly aimed at reducing the prosecution of conduct that allegedly violates a regulation interpreting or implementing a statute (where the “executive branch . . . write[s] the law, in addition to executing it”), as opposed to conduct that allegedly violates the express terms of a statute. That may be a meaningful distinction in the enforcement of statutes like the Federal Food, Drug, and Cosmetic Act that specify particularized violations and remedies, including strict-liability misdemeanor offenses, and are applied more frequently to corporations than individuals. Indeed, as described in Gibson Dunn’s forthcoming alert, DOJ’s Criminal Division announced, just days after the issuance of the Executive Order, that it “will prioritize investigating and prosecuting. . . . [v]iolations of the Federal Food, Drug, and Cosmetic Act,” among other areas.[2] The Executive Order’s explicit carveouts for conduct affecting immigration, national security, and defense also exempt a potentially broad range of corporate conduct from its mandates, especially under the administration’s expansive interpretation of those terms to date. And it may not prove challenging for prosecutors to assert that an investigation involving a possible regulatory offense is seeking to identify potentially knowing or intentional misconduct, or that the conduct under investigation “caus[ed] or risk[ed] substantial public harm.”
At the same time, the Executive Order’s clear policy statement is that “[c]riminal enforcement of criminal regulatory offenses is disfavored,” and DOJ leadership will presumably assess proposed investigations and enforcement actions with that policy in mind. Such assessments likely will lead to fewer DOJ actions involving alleged regulatory offenses, against both individuals and corporations. The policy also may be achieved, in part, by DOJ leadership’s significant streamlining of DOJ enforcement components that specialized in the enforcement of crimes related to regulated products or services, as well as the reduction (or elimination) of associated regulatory agencies. As a result, we expect that certain regulatory enforcement actions will be less frequent, especially those of the sort pursued by the Biden administration and relating to alleged violations of technical environmental, tax, and agency-reporting regulations.
Although the Executive Order will likely lead to less criminal enforcement of regulatory offenses, it may also increase the severity of allegations and punishments in those matters that do proceed. For example, DOJ has historically charged defendants with stand-alone, strict-liability misdemeanor offenses only in conjunction with a negotiated plea bargain; the offenses are almost never charged in a case that will be litigated. That has particularly been true of Federal Food, Drug, and Cosmetic Act misdemeanors charged under the “Responsible Corporate Officer Doctrine” (also known as the “Park Doctrine”), which allows prosecution of individuals without intent, knowledge, or direct participation in the alleged misconduct if they were “responsible corporate officers” who could have prevented it.[3] Park charges are almost exclusively brought in connection with negotiated resolutions, in which an executive accepts responsibility without admitting knowledge of or participation in misconduct in exchange for not being charged with more serious crimes. The predecessor Executive Order that President Trump issued in his first term (EO 13980) acknowledged this reality and included an exception for strict-liability misdemeanor prosecutions concluded via plea agreement. The new Executive Order includes no such exception. As a result, defendants against whom investigations proceed may now have fewer and more severe settlement options, likely encountering demands to plead guilty to a knowing violation or face trial. Yet either option risks significant costs and ramifications, including with respect to a defendant’s ability to contract with the federal government or receive federal funds.
This potential trend toward fewer but more severe regulatory prosecutions may also be accelerated by President Trump’s restructuring of the prosecutors based in DOJ’s Washington, DC, headquarters to consolidate criminal enforcement work in the Criminal Division. That consolidation may lead to more aggressive actions in those prosecutions that advance.
For instance, DOJ leadership has announced that the Civil Division’s Consumer Protection Branch (CPB) will be divided, with its civil work remaining in the Civil Division and its criminal work (and most of its personnel) moving to a consumer protection unit of the Criminal Division’s Fraud Section. For more than fifty years, CPB attorneys used both civil and criminal tools to enforce laws administered by the U.S. Food and Drug Administration, Federal Trade Commission, Drug Enforcement Administration, Consumer Product Safety Commission, and National Highway Traffic Safety Administration. CPB also oversaw all prosecutions by U.S. Attorney’s Offices under consumer protection laws like the Federal Food, Drug, and Cosmetic Act. CPB’s flexibility in remedies and familiarity with complex statutes allowed it to pursue investigations and reach resolutions involving complicated dynamics, often using civil or misdemeanor remedies to secure relief for consumers—collecting more than $20 billion in penalties and restitution since 2017—while allowing defendants to preserve important business functions. Both by their new placement in the Criminal Division and because of the new Executive Order, prosecutors investigating consumer protection matters may have less flexibility moving forward. In addition, criminal resolutions involving such offenses will now track the Criminal Division’s resolution templates and compliance requirements, which are more robust and have less consideration for the role of regulatory agencies than those used in most matters by CPB.
Industry Opportunities: This shifting enforcement landscape presents both opportunities and obstacles for companies. Companies should consider the following actions in the short and long term:
- Monitor Agency Reports: Companies should pay close attention to all agency reports listing which criminal regulatory offenses are enforced by that agency, along with the offense’s mens rea standard. Considering the president’s directive that criminal enforcement of offenses not listed in these reports is “strongly discouraged,” the reports may be important guides for companies seeking to identify areas of enforcement risk.
- Review and Update Compliance Programs: Given the Executive Order’s implication that “large corporations” with “expensive legal teams to navigate complex regulatory schemes” likely “can be presumed to know what is prohibited or required by . . . regulation,” it is important for companies to maintain effective internal audit and compliance programs to help demonstrate that any regulatory noncompliance was not “willingly” pursued.
- Advocate for Civil or Administrative Enforcement: Companies under investigation for regulatory offenses should evaluate the applicability of the Executive Order and, if appropriate, advocate for civil or administrative enforcement instead of criminal action. The Executive Order also provides an opportunity for industry to engage with agencies to advocate for reforms on the use of criminal enforcement in the regulatory context.
- Investigate Allegations of Fraud: Following the Executive Order and the restructuring of DOJ components, it is perhaps more likely that regulatory violations may be pursued under fraud theories and statutes. Companies should diligently investigate and address internal and external allegations of wrongdoing, particularly those that could form the basis of a claim of fraud against the government.
Gibson Dunn is monitoring regulatory developments and executive orders closely. Our attorneys are available to assist clients as they navigate the challenges and opportunities posed by the current, evolving legal landscape.
[1] https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-protecting-americans-overcriminalization-regulatory-reform/.
[2] Memorandum from Matthew R. Galeotti, Head of the Criminal Division, U.S. Department of Justice to All Criminal Division Personnel re Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime (May 12, 2025).
[3] 421 U.S. 658, 672 (1975).
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