On Friday, legislation aimed at protecting the sovereignty of American businesses authored by U.S. Rep. Dan Meuser (R-PA) passed the House Financial Services Committee.
The Protecting U.S. Business Sovereignty Act would direct the Securities and Exchange Commission (SEC) to study the effect that certain mandates in the European Union will have on American businesses, consumers, investors and the economy. It is the first step, Meuser’s office said, in protecting the America companies from “overseas regulations on their U.S.-based operations.”
“I appreciate the Financial Services Committee’s support for this important legislation, and I look forward to working with my colleagues to ensure it is brought to the House Floor for a vote,” Meuser said. “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.”
Meuser said he intended to introduce follow-up legislation with enforcement mechanisms in the coming months.
Meuser said the legislation was in response to a legislative package in the EU from the European Commission, the Corporate Sustainability Due Diligence Directive (CS3D), that would require companies operating in the EU to identify, disclose and take steps to mitigate the “negative impact” of their activities on the environment, pollution, environmental degradation and biodiversity loss.
Part of the “European Green Deal” aimed at reducing the EU’s net greenhouse gas emissions 55 percent by 2030, the goal is to put in place procedures to address environmental impacts by fostering sustainable and responsible corporate behavior throughout a company’s value chain.
Companies non-compliant with the CS3D directive would be liable for damages and could be sanctioned by EU nation supervisory authorities including “naming and shaming,” the Congressman’s office said, as well as removing a company’s goods from market fining the company. Non-EU companies that fail to comply with the CS3D rules, if passed, would be banned from public procurement in the EU.