Executive Order on Overcriminalization in Federal Regulations

On the whole, the EO discourages the criminal enforcement of regulatory offenses except “where a putative defendant is alleged to have known his conduct was unlawful.” The impact of the EO is not yet clear, but it could have wide-ranging implications.

The EO is meant to tackle what it deems an “absurd and unjust” system in which people are not always aware that their conduct could criminally violate federal regulations due to the “drastically overregulated” system of government. According to the EO, the Code of Federal Regulations (CFR) contains over 48,000 sections and 175,000 pages, which is “far more than any citizen can possibly read, let alone fully understand.” As a result, “no one … knows how many separate criminal offenses” the CFR contains. The EO seeks 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.”

Key Highlights of the EO

1. Reduced Criminal Regulatory Enforcement: The EO discourages criminal enforcement of regulatory offenses, emphasizing that prosecutions should target those who knowingly violate regulations and cause substantial public harm.
2. Disfavors Strict Liability Offenses: Where enforcement is appropriate, the EO encourages agencies to consider civil or administrative actions rather than criminal enforcement of strict liability regulatory offenses.
3. Increased Transparency and Clarity: The EO directs agencies promulgating regulations that impose criminal liability to explicitly describe in the Notice of Proposed Rulemaking the rule or proposed rule that constitutes a criminal regulatory offense, the authorizing statutes, and the required state of mind (mens rea) for each element of such offense. Proposed rules with strict liability implications must undergo additional review.
4. Mandatory Reporting: By May 9, 2026, the head of each agency must provide a report to the Director of the Office of Management and Budget containing a list of all criminal regulatory offenses and associated penalties. This list must be publicly available on the agency’s webpage, updated annually, and should inform decisions on whether to initiate investigations and pursue criminal charges. Enforcement of criminal regulatory offenses not identified in these reports is “strongly discouraged.”
5. Default Mens Rea Standards: Under the EO, the head of each agency is tasked with evaluating “whether there is authority to adopt a background mens rea standard for criminal or regulatory offenses that applies unless a specific regulation states an alternative mens rea.”
6. Guidance on Criminal Referrals: Within 45 days of the EO, each agency must publish guidance describing its plan to address criminal regulatory offenses. The guidance must “make clear that when the agency is deciding whether to refer alleged violations of criminal regulatory offenses to the US Department of Justice, the agency should consider” various factors, including the harm caused, potential gains for the defendant, and the defendant’s awareness of his or her conduct’s unlawfulness.

Notably, the EO expressly excludes two categories of laws and regulations from its scope: (1) immigration laws or regulations and (2) enforcement of laws or regulations “related to” national security or defense. The second category of exclusions — those “related to” national security or defense — could lead to confusion by the agencies about which statutes and regulations are excluded and in what contexts.

It is too soon to fully evaluate the impact of the EO, but from an enforcement standpoint, we can expect agencies to reduce the number of referrals made to the Department of Justice for prosecution of regulatory violations, and we can further expect prosecutors to be less likely to bring charges in those cases that are referred or otherwise investigated based on regulatory violations. Defendants who are investigated or accused of criminally violating regulations will likely rely on the EO in arguing that prosecution is unwarranted, but they could still face prosecution based on the authorizing statute.

From a rulemaking standpoint, the impact of the EO will depend on the nature of the new or revised rules issued based on the EO. Agencies must be careful to ensure that their regulations are consistent with the authorizing statutes. They should also be careful to avoid overstepping by crafting or revising regulations in ways that are not directly supported by the authorizing statutes.

Courts may be hesitant to give deference to agency interpretations in the wake of Loper Bright Enterprises v. Raimondo, 603 US 369 (2024), where the US Supreme Court held that courts should not defer to agency interpretations of laws when a statute is ambiguous. In fact, the degree of deference to criminal statutes even before Loper was subject to significant debate. That issue may have limited actual impact, however, because any truly ambiguous criminal statute should already subject to judicial review based on the Due Process Clause’s fair warning requirements, even though defendants rarely succeed in defeating charges on that ground.

Overall, while the EO aims to reduce the risk of unwarranted criminal penalties, companies and individuals, especially in highly regulated industries, should maintain compliance programs that mitigate the risk of violating regulations, which can still lead to civil, administrative, and in some instances criminal enforcement. We will continue to monitor the impact of the EO in the months and years to come.