Election-Driven Regulatory Shifts: Building Risk and Compliance Strategies for 2025

Election-Driven Regulatory Shifts: Building Risk and Compliance Strategies for 2025

According to an article by Navex, the 2024 elections worldwide signal significant shifts in enforcement and regulatory landscapes. In the US, a unified Republican government may streamline federal legislation, particularly on AI, tariffs, sanctions, and ESG, while global regulatory trends continue to evolve.

Here are some of the regulatory shifts the article highlights:

Artificial Intelligence (AI):

The EU’s AI Act sets the global benchmark, while US federal action remains fragmented, with states stepping in. A federal AI law that aims to harmonize standards is plausible. Compliance teams should inventory AI usage, assess risks like bias and data leaks, and align high-risk applications with EU AI Act safeguards.

Tariffs:

Proposed universal tariffs on US imports could spark global trade instability. Companies must assess supply chain vulnerabilities, especially in China, and prepare for potential supplier relocations and modern slavery audits.

Sanctions:

Potential shifts include lifting Russian sanctions if the Ukraine conflict is resolved and reimposing strict measures on Iran. To navigate increasing geopolitical complexity, companies should expand their sanctions compliance programs and adopt automated risk assessment tools.

Environmental, Social, and Governance (ESG):

Despite US federal rollbacks, EU and California mandates will intensify. To prepare for these expanding disclosure requirements, firms should collect ESG data and audit third-party compliance.

Compliance must transcend political shifts. The article suggests continuing best practices, such as proactively addressing supply chain and third-party risks, fortifying due diligence, and championing ethical practices to navigate emerging challenges and maintain resilience.