EPA Issues New Criminal Prosecution Referral Policy Amid Overcriminalization Debate

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On May 9, 2025, President Trump issued Executive Order No. 14294, “Fighting Overcriminalization in Federal Regulations” (EO) with the asserted aim of easing the regulatory burden on "everyday" citizens. In particular, the EO alleges that many regulatory crimes are “strict liability” offenses (i.e., they do not require a guilty mental state) and therefore businesses that can hire expensive legal teams to guide them through complex regulatory schemes are less likely to face criminal penalties over "average Americans."

While the EO suggests its primary goal is to level the playing field for participants of all sizes and resources navigating complex regulatory schemes, the EO is consistent with the Trump Administration's overall desire to ease the regulatory burden on big corporations, new market participants, and individuals alike. To that end, the EO makes several broad statements concerning United States public policy, including that criminal enforcement of criminal regulatory offenses are disfavored, strict liability offenses are disfavored, and that prosecution of criminal regulatory offenses is most appropriate for persons who know what is prohibited or required and willingly choose not to comply and thereby cause or risk "substantial" public harm. In turn, the EO directs federal prosecutors to focus their efforts on crimes involving intentional or willful misconduct (with substantially harmful results), as opposed to regulatory crimes involving mere knowledge or negligence.

The EO also includes directives for federal agencies in order to align with these public policy statements. One such directive mandates that each agency issue guidance describing how it will address “criminally liable regulatory offenses.” The EO advises that the guidance should "make clear" that when the agency is weighing whether to refer an alleged offense to the Department of Justice (DOJ) the agency should consider factors relating to:

  1. harm or risk of harm associated with the offense;
  2. potential gain to the defendant from committing the offense;
  3. whether the defendant had specialized knowledge or expertise related to the rule or regulation, including a license in the specific industry; and
  4. what evidence is available of the defendant's awareness of the unlawfulness of his conduct, as well as the defendant's knowledge or lack thereof of the regulation or law at issue.

Accordingly, on July 31, 2025, EPA published in the Federal Register "Guidance on Referrals for Potential Criminal Enforcement" (Guidance) in response to the directive described above. In this Guidance, EPA proffers that it is the agency's "general policy," "subject to appropriate exceptions and to the extent consistent with law," to apply the four factors identified in the EO when deciding whether to refer a criminal offense to the DOJ. Of note, EPA further states that historically it has already considered each of these factors in formal policy as well as in practice—in both the prosecution referral context but also in deciding whether to open a formal investigation in the first place.

EPA cites (in a footnote) its 1994 guidance document "The Exercise of Investigative Discretion" (“1994 Policy”) to support its claim that these factors are already incorporated into EPA's criminal enforcement decision-making tree. Critically, the 1994 Policy notes that criminal enforcement authority should target the most "significant and egregious violators." Moreover, the 1994 Policy outlines that harm and culpability are two key factors when pursuing a criminal investigation, with harm accounting for actual harm, the threat of harm, actual discharges or emissions, and whether there is a deterrent purpose in punishing the specific type of harm at issue; and culpability focusing on history of repeated violations, deliberate or intentional misconduct, concealment or falsification of records (which generally signals a guilty mind), tampering of equipment, and those that choose to operate outside the proper license or permit to avoid a regulatory scheme entirely. The 1994 Policy also emphasizes that less flagrant violations with lesser environmental consequences should be addressed through other avenues, like administrative or civil monetary penalties.

EPA’s citation to the 1994 Policy in the new Guidance may be a subtle attempt by the agency to counter the claim that environmental violations are over-criminalized, as the 1994 Policy already considers factors similar to those outlined in President Trump’s EO focused on combatting “overcriminalization.” In this context, while the new Guidance incorporates the EO’s factors directly, EPA’s standard approach to criminal investigations—and by extension, criminal prosecutions—is unlikely to shift significantly given the already existing framework.

With that in mind, those in the regulated community should not view President Trump’s EO and EPA’s Guidance as a major policy shift or a “get out of jail for free card” for environmental violations. While companies may have some leverage now to fight criminal prosecutions of strict liability crimes concerning complex or vague regulations, companies should nevertheless continue to operate as usual with an emphasis on compliance, correcting deficiencies as they arise, and seeking out advice when what the law requires is blurry. Compliance with the law (as opposed to ignorance of the law) is still the best shield against enforcement of any kind.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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