On May 9, 2025, President Donald J. Trump signed a new Executive Order titled Fighting Overcriminalization in Federal Regulations, marking a significant policy shift in how federal agencies and the Department of Justice (DOJ) approach criminal enforcement of regulatory violations. This order responds to longstanding concerns that U.S. federal regulations have grown so expansive and complex that individuals and businesses—particularly those in highly regulated sectors—can face severe criminal penalties, including jailtime, for conduct that lacks any criminal intent, or "mens rea." Critics have argued that such "overcriminalization" undermines fairness, especially when defendants are not given clear notice of potential criminal liability or when agencies pursue criminal charges for technical violations that do not require proof of an individual defendant's intent to commit wrongdoing.
Executive Order Summary: Transparency, Intent, and Enforcement Priorities
The Executive Order discourages enforcement of "criminal regulatory offenses" and directs the Executive Branch to prioritize prosecutions only for those "who know or can be presumed to know what is prohibited or required by the regulation and willingly chose not comply, thereby causing or risking substantial public harm." The Order expressly discourages pursuing criminal remedies for strict liability offenses—i.e., those that do not require proof of a defendant's intent or knowledge—and instead encourages agencies to prioritize civil or administrative remedies over criminal prosecution, particularly where no willful misconduct is evident.
As a longer-term project, the Executive Order directs all federal agencies, in coordination with the DOJ, to take a number of steps intended to provide better notice about criminal regulatory offenses.
These include:
- Within 45 days, each federal agency is to publish guidance in the Federal Register, describing its plan to address criminally regulatory offenses and to describe the factors the agency uses to determine whether to refer matters to the DOJ for criminal prosecution.
- Within 365 days, each agency must identify and publish a comprehensive list of regulatory offenses enforceable by the agency that carry criminal penalties. These reports must include the statutory authority, the required mental state or "mens rea" for the offense, (if any), and the rationale for criminal enforcement. Importantly, the order states that criminal prosecution should be "strongly discouraged" for any regulatory offense not included in these reports.
- The head of each agency, in consultation with the Attorney General, shall determine whether there is authority to adopt a background mens rea standard for criminal regulatory offenses, i.e., one basic on case law and general principles of criminal liability, that applies unless a specific regulation states an alternative mens rea. Thirty days after submission of "comprehensive list of regulatory" offenses report referenced above, each agency must, in consultation with the Attorney General, submit a report assessing whether the currently applicable mens rea standards for criminal regulatory offenses enforced by the agency are appropriate and, if they are not, present a plan for changing the mens rea.
- Further, the Order directs that in all future notices of proposed rulemaking (NPRMs) and final rules published in the Federal Register expressly disclose if the violation of the rule may constitute criminal regulatory offenses.
- The Order directs agencies to consider certain factors when referring "criminal regulatory offenses" to DOJ. Those factors include "(a) the harm or risk of harm, pecuniary or otherwise, caused by the alleged offense; (b) the potential gain to the putative defendant that could result from the offense; (c) whether the putative defendant held specialized knowledge, expertise, or was licensed in an industry related to the rule or regulation at issue; and (d) evidence, if any is available, of the putative defendant's general awareness of the unlawfulness of his conduct as well as his knowledge or lack thereof of the regulation at issue."
Takeaways
- The Executive Order aims to provide increased notice of federal regulatory offenses that may be criminally punishable and to provide clearer standards for both (i) the circumstances in which those offenses cross the line from a regulatory offense to a criminal one and (ii) the "mens rea" or mental state required for criminal liability, which is often a critical factor in white collar investigations and prosecutions.
- Companies should monitor their regulators' submissions to the Federal Register, which should be published in June, and the reports the agencies must submit within 365 days, to obtain more insight into an agency's views on when, and under what circumstances, criminal prosecution of a regulatory offense is appropriate.
- The Executive Order highlights the importance of being prepared to show good faith (or at least lack of bad faith) where a criminal investigation arises. Effective and robust corporate compliance programs remain essential. Additionally, companies should consider documenting decisions around complex regulatory compliance issues (especially in contexts where criminal violations are possible). Where necessary, sharing that contemporaneous documentation with investigators may be useful in showing good faith efforts to comply.
The Order specifically exempts enforcement of immigration, national security, or defense laws or regulations from the scope of this new policy.
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