Last week, the U.S. Embassy in Paris issued a letter and certification form to multiple French companies requiring companies that serve the U.S. Government to certify their compliance with U.S. federal anti-discrimination laws. This certification request was issued in furtherance of President Trump’s Executive Order 14173 on Ending illegal Discrimination and Restoring Merit-Based Opportunities, issued on January 21, 2025. This Order addresses programs promoting Diversity, Equity and Inclusion (DEI) and requires that government contractors’ employment, procurement and contracting practices not consider race, color, sex, sexual preference, religion or national origin in ways that violate the United States’ civil rights laws.
Certification Contents
- The certification requires U.S. Government contractors to certify that they comply with all applicable U.S. federal anti-discrimination laws and do promote DEI in violation of applicable U.S. federal anti-discrimination laws.
- While the letter was issued by the U.S. Embassy in Paris and is arguably limited to contractors serving that embassy, the requirement under the Executive Order extends to all contractors doing business with any U.S. Government agency.
- Any company submitting the certification with knowledge that it is false will be deemed to have violated the U.S. False Claims Act, which imposes liability on individuals and companies who defraud governmental programs.
Implications for French Companies
- This letter raises questions about the extraterritorial application of U.S. laws to foreign companies and their reach. In particular, while the Executive Order clearly applies to companies (irrespective of nationality) that directly supply or provide services to the U.S. Government, it is unclear whether, for example, the French parent of a U.S. subsidiary providing services to the U.S. Government would be subject to the certification.
- The issue is complicated by the fact that French law in some ways conflicts with the provisions of the Executive Order – for instance, requiring that mid-sized and large companies have a minimum percentage of women sitting on their boards.
- Neither the Executive Order nor the documents mention any exemptions or carve-outs for suppliers and service providers.
Conclusion
The U.S. Embassy’s certification requirement underscores the current complexities faced by international businesses in dealing with the U.S. Government. French companies should consider carefully assessing their DEI programs and overall compliance with U.S. federal laws while continuing to adhere to their own legal obligations, striking a careful balance as best they can.
