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Regulatory Enforcement Trends in the New Administration and What They Mean for Your Company
As the Trump administration ushers in a new era of regulatory policy, businesses are closely monitoring shifts in enforcement trends. Understanding these changes is crucial for navigating the evolving regulatory landscape and their impact on effective compliance practices. From a focus on deregulation to an emphasis on enforcement practices across industries, the new administration’s expected approach to compliance and oversight is reshaping the way companies operate. In this blog, we will explore key regulatory enforcement trends we expect to emerge under this leadership and how organizations can prepare for potential challenges and opportunities in the coming years.
1. AI
As public policy makers search for consensus around this ever-evolving technology, for the early part of the new administration at least, we may see continued application of existing regulations and frameworks alongside a push toward “non-regulatory approaches” such as industry/sector-specific policy guidance and the use of voluntary frameworks and standards (such as the NIST AI Risk Management Framework), and test/pilot programs. In addition, the U.S. Justice Department’s updated Evaluation of Corporate Compliance Programs guidance has placed a new emphasis on understanding how technology is used, particularly emerging technologies, and an effective compliance program to mitigate those risks. AI-related enforcement actions are unlikely in the short term. However, companies should use this time to understand how they are using AI and to review and reinforce their control measures against -based misconducts, crimes, and cyberattacks. This effort will help evaluate the beneficial use of AI in governance, monitoring, and oversight.
2. Sanctions and Trade
Sanctions and other trade regulations will likely continue to play a central role in shaping U.S. foreign policy under the new Trump administration. With strong emphasis on “America First,” companies are expected to face heightened scrutiny over their compliance with an evolving set of stringent regulations focused on national and supply chain security. As the first of such measures, President Trump signed an executive order designating Mexican drug cartels as Foreign Terrorist Organizations (FTOs) on the very first day in the office, foreshadowing the liberal use of executive power in this area in the next four years. Enhanced understanding and mitigation of your company’s supply chain vulnerabilities, including any sanction and cybersecurity risks across upstream and downstream business networks is crucial: Know Your Customers, Know Your Employees, Know Your Suppliers, and reinforce your due diligence process.
3. Human Rights and Sustainability
Activities in the first Trump administration are illustrative of where a second Trump administration may take human rights and sustainability enforcement. Some trade-focused bipartisan human rights laws, such as the Uyghur Forced Labor Prevention Act (proposed during the first Trump administration and signed into law by President Biden) which restricts imports from the Xinjiang region of China, are likely to be actively enforced in the new Administration. Some climate-focused programs, however, while unlikely to be repealed by law, may receive less funding. Recent federal government initiatives established through executive orders and other regulatory actions, including the SEC’s climate, fund naming, and ESG disclosure rules, and measures to reduce or eliminate vehicle emissions, may be reversed. In addition, Congress could seek to enact the recommendations of the Republican ESG Working Group Staff Report from the last Congress to limit the use of ESG considerations in financial markets. Nevertheless, as federal initiatives on climate and human rights wane, individual states are expected to fill the gaps by enacting their own laws and regulations. Companies can expect a more complex regulatory landscape and closer scrutiny from state enforcers in these areas.
4. Changing Focus on Antitrust Enforcement
President Trump’s pick as the new FTC Chair, Andrew Furguson, is expected to have different antitrust enforcement priorities than those of his predecessor, Lina Khan. First, Mr. Ferguson, as a Commissioner for the FTC, has dissented from a number of the Commission’s previous actions involving so-called no-poach and non-compete agreements. While he considers it an important part of the FTC’s responsibilities to protect competition in labor markets, the FTC under his leadership may be less aggressive in its approach to labor market-related antitrust enforcement. Second, Mr. Ferguson on the one hand has expressed intentions to address actual and perceived anticompetitive behaviors and censorship in the tech industry. On the other hand, he has also expressed skepticism on regulating nascent technologies, including AI, prematurely. In terms of enforcement, this would mean a more lenient approach to mergers and acquisitions involving new technologies, while continuing vigorous enforcement against excessive market dominance and other anticompetitive behaviors associated with the Big Tech ecosystem.
5. Immigration
As a key pillar of the election, all eyes are on the Trump administration’s immigration enforcement changes. In particular, Guidepost’s Immigration Practice team anticipates an increase in enforcement and investigative actions of I-9 compliance audits, unannounced worksite visits, E-Verify reports focusing on employers with high numbers of Final Non-Confirmation Reports, among others. Additionally, there is potential immigration policy changes that may significantly impact U.S. businesses if changes to the H-1B visa program are made, which might limit access to skilled foreign labor. At the same time, we can expect immigration-related labor enforcement to rise at the DHS, DOL, and DOJ.
As is normal with all changes in presidential administrations that also involve a change in political party, the new Trump administration’s regulatory enforcement priorities may result in significant shifts across multiple critical areas. More importantly, those of the Trump administration may prove less predictable than those of recent administrations that also involved a change in party control. Businesses must remain informed and proactive, focusing on effectively navigating an evolving regulatory framework designed to address emerging technological challenges, national security, and global economic tensions. To manage these potential regulatory and enforcement shifts, companies should consider the following next steps:
- AI: Organizations utilizing AI and other emerging technologies should conduct risk assessments on these technologies and document steps taken to mitigate risks arising from them. In particular, organizations should ensure that those technologies have a risk framework in place that assesses their impact on the organizations’ ability to comply with relevant laws and regulations. Further, emerging technologies, including AI, should be considered in your organization’s overall compliance risk assessment.
- Sanctions and Trade: When was the last time you reviewed all counterparties in your supply chain? What exactly do you know about them? For example, where are they located, where do they do business, and who do they do business with? When was the last time you assessed your due diligence process? Identify the ways in which new trade policies and regulations could affect your business and consider updates to your supply chain related processes to ensure any new regulatory factors and metrics are captured at appropriate points in the process.
- Human Rights and Sustainability: Under the Trump administration, scrutiny over companies’ sustainability efforts at the federal level may wane. However, companies should closely monitor state- and local-level environmental regulations and international sustainability standards, as they are likely to remain strict. Even amid shifting federal priorities, ESG remains a significant compliance risk. Companies must ensure transparency and accuracy in ESG reporting and disclosure, closely monitor ESG-branded products, activities, and advertisements, and ensure that human rights and sustainability are incorporated into risk assessments to maintain credibility and investor trust while preventing enforcement actions for making false representations about their programs.
- Antitrust: Ensure that horizonal or vertical collaborations with other companies, especially those involving information gathering, sharing, and manipulation, are not, and may not be perceived to be, anticompetitive. Further, consider using AI and your company data to monitor and prevent anticompetitive conduct by employees, directors, and officers; and
- Immigration: Take a proactive approach to assessing your workforce compliance program: employers that may not have recently assessed their level of compliance should conduct an internal or external audit to ensure your I-9s are fully compliant with U.S. regulations. Employers should maintain and develop a robust I-9 compliance framework and be vigilant for any changes in visa requirements, as well as evolving document and identity fraud typologies.
To navigate the complexities of regulatory compliance effectively, organizations should consider engaging a third-party compliance consultant, such as Guidepost. This approach can significantly lessen the burden on internal staff, allowing more time to focus on core business activities. Additionally, by leveraging the broad expertise of a specialized consultant, companies can benefit from tailored compliance strategies and stay ahead of regulatory changes.
Crystal R Jezierski
Senior Managing Director
Crystal R. Jezierski works with clients to manage governance and risk requirements and to design, implement, and lead compliance programs. Ms. Jezierski is a compliance expert and former compliance executive with 25 years of government and private sector experience. She has served as associate general counsel, assistant secretary for the U.S. Chamber of Commerce, senior vice president for Global Ethics at Walmart, a partner with the global law firm Baker McKenzie and as chief counsel for Oversight and Investigations with the Judiciary Committee of the U.S. House of Representatives.
Akiko K. Goldberg
Managing Director
Akiko K. Goldberg is a multilingual attorney with over 14 years of experience managing complex multijurisdictional and cross-border investigations and litigation. She has significant experience in advising on compliance issues particularly regarding financial institution compliance.
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