Rep. Meuser Introduces Bill to Protect the Sovereignty of U.S. Businesses from European Union Mandates

WASHINGTON, D.C. — Today, Congressman Dan Meuser (PA-09) introduced the Protecting U.S. Business Sovereignty Act. The legislation directs the Securities and Exchange Commission (SEC) to conduct a study on the effect certain mandates in the European Union will have on American companies, consumers, investors, and the economy as a whole. The bill serves as the first step in protecting the sovereignty of American companies from overseas regulations on their U.S.-based operations. Follow-up legislation with an enforcement mechanism will be introduced following the study.

The Protecting U.S. Business Sovereignty Act comes in response to a legislative package from the European Commission, the Corporate Sustainability Due Diligence Directive (CS3D). The directive would require companies operating in the European Union to identify, disclose, and take steps to mitigate the “negative impact” of their activities on the environment, pollution, environmental degradation, and biodiversity loss.

Companies deemed non-compliant with the standards set forth in the CS3D directive will be liable for damages and can be sanctioned by national supervisory authorities. Sanctions include “naming and shaming,” removing a company’s goods from the market, or fines of at least 5% of net worldwide turnover. Further, non-EU companies that fail to comply with the rules would be banned from public procurement in the EU.

Rep. Meuser said, “The SEC and the European Union have no jurisdiction in dictating carbon emission standards on U.S. companies. The U.S. is doing many things regarding fossil fuels, and in fact, we are the only industrialized country in the world to reduce carbon emissions in recent years. However, this bill isn’t about climate change, it’s about following the law and protecting the sovereignty of American businesses. The European Union should not have the authority to issue mandates on divisions of U.S. companies operating on American soil. The American-based operations of U.S. companies should be beholden to U.S. law and no other governing body. My bill is the first step in ensuring we preserve and protect the sovereignty of American companies that have a presence in the European Union, and I look forward to introducing legislation with an enforcement mechanism in the coming months.”

Text of the bill can be found here.

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