SB 985, the PROTECT USA Act of 2025, would bar certain U.S.-based entities from complying with foreign sustainability due diligence laws. The bill is aimed at laws like the European Union’s Corporate Sustainability Due Diligence Directive and any similar foreign rules that require companies to assess, address, and report environmental or social impacts across their operations or value chains. It defines covered entities broadly to include businesses that contract with the federal government, U.S.-organized companies, foreign subsidiaries of such companies, and firms tied to extractive industries, manufacturing, defense production, or critical minerals.
The bill creates a general prohibition on compliance with covered foreign sustainability due diligence regulations, while allowing actions taken to comply with U.S. law or ordinary business activities. It also establishes a hardship exemption process in which affected entities may petition the President for relief, with a required decision within 30 days. In addition, the bill bars adverse actions against covered entities for noncompliance, refuses recognition of foreign judgments tied to these regulations, authorizes presidential protective action, creates a private right of action, and sets civil penalties of up to $1 million plus possible federal contracting ineligibility for violators.
If enacted, the bill would add a new federal restriction on how certain U.S. companies and their foreign subsidiaries respond to foreign sustainability due diligence regimes, effectively preempting compliance with those foreign requirements for covered entities. It would affect businesses in agriculture, energy, mining, timber, manufacturing, defense, and critical minerals, as well as federal contractors and other entities deemed integral to U.S. national interests. The measure would also limit enforcement of foreign judgments in U.S. courts, create new civil remedies and penalties, and expand presidential authority to shield covered firms from foreign regulatory pressure.
The available record shows the bill was introduced and referred to the Senate Committee on Foreign Relations, with no recorded votes or committee transcript excerpts available. Based on the text, the bill’s framing is strongly protective of U.S. commercial interests and skeptical of foreign regulatory reach, especially European sustainability rules. The overall tone is assertive and deregulatory from the perspective of affected U.S. firms, emphasizing trade, energy, and national security concerns.
The main point of contention is the bill’s broad prohibition on compliance with foreign sustainability due diligence laws, which could conflict with foreign legal obligations and corporate ESG compliance practices. Supporters would likely view the measure as necessary to prevent extraterritorial overreach and protect U.S. competitiveness, while critics may argue it undermines international cooperation on human rights and environmental accountability, and could expose companies to foreign penalties or market access problems. The breadth of the covered-entity definition, the inclusion of EU directives and successors, and the private enforcement and penalty provisions are likely to be the most disputed features.