Header graphic for print

Global Policy Watch

Key Public Policy Developments Around the World From Covington & Burling LLP

Lock Down of Nuclear Site: False Alarm, with a Lesson Learned

Posted in Compliance Issues, Energy Law, Environmental Law

Last week the Savannah River Site (“SRS”) in South Carolina, a large nuclear facility owned by the U.S. Department of Energy (“DOE”), went into a lock down after electronic and canine scans of a commercial delivery truck attempting to enter the facility indicated possible explosive residue on the vehicle.  Fortunately, the lock down was lifted a few hours later after law enforcement determined that there were no explosives on the truck.  The incident nonetheless attracted significant media attention presumably in view of the activities conducted at the facility, which is operated by private companies under contract with the DOE.  SRS processes and stores nuclear materials in support of U.S. national defense.  It also develops and deploys technologies to treat nuclear and hazardous waste left from the Cold War.

Based on publicly-available information about last week’s incident, SRS contractors did everything right:  they screened the vehicle as it approached the facility, prohibited entry and locked the facility down when a potential threat was detected, and called in law enforcement to secure the area and investigate.  There is, however, one more thing SRS contractors could have done — and still can do — obtain protection under the SAFETY Act, a post-9/11 risk mitigation program administered by the U.S. Department of Homeland Security (“DHS”) to incentivize the development and deployment of anti-terror technology.

The SAFETY Act promotes the creation and use of anti-terror technologies — like the security measures in place at SRS — by, among other things, eliminating liability for providers and users of such technologies.  Specifically, should DHS conclude that an anti-terror technology is effective, has performed as intended, and is safe for its intended use, the DHS determination gives the provider of such technology a rebuttable presumption of immunity from liability should the technology be implicated in tort suits following a terrorist attack.  In addition, even if the presumption can be overcome, the SAFETY Act caps third-party liability arising from an act of terrorism for an approved anti-terror technology at the predetermined amount of the terror insurance limits required to be maintained.  The SAFETY Act also bars claims for punitive damages, precludes state court litigation, and prohibits pain and suffering claims without proof of physical harm. But these potentially significant liability protections are not automatic: companies must submit a confidential application to DHS and pass a rigorous DHS review process to receive the protections.

We have written extensively about the SAFETY Act, including its value to energy sector, which has thus far not availed itself of the Act as a powerful risk mitigation tool.  We also recently blogged about the House Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies’ current initiative to amend the SAFETY Act to include protection not only for acts of terrorism, but also for “qualifying cyber incidents,” explaining that such an expansion would greatly benefit the energy sector, among others.  Last week’s event at SRS, against the backdrop of recent security incidents at other facilities like the Metcalf Substation in California, is a stark reminder that U.S. energy sector and its critical infrastructure are prime targets for terrorist attacks, and such an attack could have significant consequences, including third-party liability.

Although the nuclear industry enjoys some degree of protection via the Price Anderson Act (“PAA”), a legislative scheme that protects nonmilitary nuclear power plants from liabilities resulting from personal injury and property damage, the PAA does not offer complete protection from potential liability associated with an act of terrorism.  In particular, the PAA indemnifies operators of nuclear facilities from public liability resulting from a nuclear incident, which is defined as “any occurrence . . . causing . . . bodily injury, sickness, disease, or death, or loss of or damage to property, or loss of use of property, arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of source, special nuclear, or byproduct material.”  Thus, if, for example, the resulting damage and bodily injury did not arise from the hazardous properties of the nuclear material at the site, the protections of the PAA may not apply to a terrorist attack occurring at a nuclear facility.  For instance, had the security incident at SRS not been resolved, and an explosive-laden truck had gained access and detonated at the site, there could have been a devastating loss of life and property damage based solely on the explosion of the truck and the PAA might not apply.  This latest event should thus serve as a call to action for members of the energy sector to seriously consider the SAFETY Act as an element of their overall risk mitigation strategy.

Tax Transparency In the EU

Posted in EU Law and Regulatory

On 17 June 2015, the European Commission launched a public consultation on further corporate tax transparency, which suggests a variety of tax transparency measures including country-by-country reporting (see here). The consultation is intended to gather feedback on which companies should offer more tax transparency and to whom. The deadline for the consultation is September 9, 2015.

Country by Country reporting – OECD action and EU policy options

Aggressive tax planning and profit shifting have preoccupied governments around the world and as the EU considers its options in this consultation, it is likely to be guided by OECD plans in this area. Country-by-country reporting would require multinational companies to disclose key financial information on every country where they operate. The OECD and G20 countries are finalising a 15-point action plan to tackle base erosion and profit shifting (BEPS). One particular action point, BEPS Action point 13 (BEPS 13), recommends that, at State level, very large multinational enterprises (turnover > EUR750m) provide a Country-By-Country Report (CBCR) to the relevant tax authority. On 8 June 2015, the OECD issued the Implementation Package in relation to this BEPS 13 and the Commission will certainly use these OECD recommendations on country by country reporting standards as a starting point. However, OECD and G20 countries are not obliged to follow or implement the recommendations of the BEPS project, and not all EU Member States are OECD members.

In addition to these measures in the pipeline, regulated credit institutions in the EU are already obliged to disclose country-by-country reports (CBCR) under the Capital Requirements Directive IV (CRD IV), which is being implemented in the EU member states.[1] The Commission may consider extending these requirements to all other sectors.

Details of the Commission’s consultation

The consultation is intended to gather feedback on which types of companies should offer more transparency; to whom they would disclose information (tax authorities or the public) and what type of information should be disclosed. A key element of the consultation is whether any initiative should follow closely the BEPS initiatives of the OECD and G20.

The consultation proposes a range of tentative options to improve tax transparency.

  1. No EU Action
  2. Implementation of BEPS 13 at EU level
  3. Publication of anonymised/aggregated data by the EU tax authorities
  4. Public disclosure of tax-related information by enterprises
  5. Publicly available corporate tax policies published by enterprises in relation to their approach towards tax compliance and planning

The Commission is exploring ways to improve information exchange between tax authorities and the scope of application of the transparency requirements – whether it will follow the same scope as the BEPS requirements or define the scope wider. If the Commission opts for public disclosure requirements, they must consider, what level of information would be necessary to include in a publicly available country-by-country report, with options ranging from disclosing information already required under both CRD IV and BEPS 13; disclosing some additional information such as subsidiary operations in each country, tangible assets, accumulated earnings (normally only available to tax authorities) or even disclosing tax rulings (normally exchanged between tax authorities) and public subsidies received (currently only required from financial institutions). And which companies will be required to disclose this information? The Commission is examining whether non-EU multinationals with branches or subsidiaries in the EU should be covered by any new EU corporate tax transparency rules. Respondents also have the opportunity to estimate the additional costs and resources involved in country-by-country reporting.

Objectives of the Commissions consultation

The consultation is part of a broader Commission action plan against aggressive corporate tax avoidance in the EU. Under this plan, the Commission aimed to re-launch the Common Consolidated Corporate Tax Base (CCCTB), ensure effective taxation and increase transparency. On 18 March 2015, the Commission presented a package of measures to boost tax transparency, including a proposal for the automatic exchange of information on cross-border tax rulings between Member States.

The objective of this consultation is to explore ways to increase pressure on companies to move to a system on the basis of which the country where a business’ profits are generated is also the country of taxation. A Commission impact assessment is being prepared to assess whether providing more information to either tax authorities or to the public would increase public pressure on companies and intra-authority peer pressure on tax authorities in Member States to take measures to stop ‘tax competition’ between Member States. The Commission is also concerned that corporate tax avoidance distorts the internal market and the level playing field between taxpayers – in particular between locally based SMEs and large multinational companies who have the potential to use more sophisticated tax planning tools to spread their tax base internationally.

Maneuvers in the European Parliament

In a parallel legislative procedure and independent of the Commission consultation, on July 8, the European Parliament has adopted certain amendments to the Shareholders Rights Directive that would oblige certain large undertakings to publicly disclose country-by-country reports (see here). The information required by the proposed amendment includes: names, nature of activities and geographical location; turnover; number of employees on a full time equivalent basis; value of assets and annual cost of maintaining those assets; sales and purchases; profit or loss before tax; tax on profit or loss; and public subsidies received. There are also rules concerning disclosure of a summary of tax rulings. However, the Parliament’s amendments did not receive the support of the Commission and the proposals have been sent back to the Parliamentary committee for consideration. The committee has now maximum two months to report on the concerns of the Commission and monitor the progress in the Council of the proposal. Nonetheless, these maneuvers show the European Parliament’s appetite to adopt rules on country-by-country reporting.

Conclusion

The results of this consultation will shape the Commissions thinking on tax transparency and is the first step on the path towards European and perhaps international country-by-country reporting.

Multinational companies with a European presence should expect increased scrutiny in the future – either from tax authorities or the public, or from both. The Commission’s consultation process provides companies with an opportunity to have their say on the scope of this disclosure. Many companies and interest groups have already provided valuable inputs into the CBC reporting initiative in BEPS 13. However, since the EU initiative has the potential to impose different requirements than BEPS 13, close attention should be paid to this consultation. Covington uses the combined expertise of its Tax practice and its Public Policy & Government Affairs practice to provide advice to clients on this consultation.

The consultation will close on September 9, 2015 and the Commissions impact assessment will be published in Spring 2016.

___________________
[1] Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV).

 

China Issues Draft Network Security Law

Posted in Asia, China, Intellectual Property Protection

Close on the heels of a sweeping new National Security Law, the Standing Committee of the National People’s Congress released last month for public comment a very significant draft Network Security Law (“Draft Law”), also referred to as the draft Cybersecurity Law.

Since it came into power in 2012, China’s current leadership has attached an unprecedented level of attention to network security, which it sees as a core aspect of national security. Marking the establishment of a new Central Leading Group for Cyberspace Affairs in 2014 that he himself would lead, President Xi Jinping declared that “network security and informatization are key strategic issues related to national security and development,” and that “national security no longer exists without network security.” President Xi went on, in those remarks, to call for the development of a legal infrastructure for the administration of cyberspace, with particular emphasis on the protection of “critical information infrastructure” (see further discussion below). The resolution of the Fourth Plenum of the Central Committee of the Chinese Communist Party in October 2014 echoed this theme.

The focus on network security appears to stem from the explosive development and extensive usage of network and information technologies, made more pressing by Edward Snowden’s disclosures in 2013 regarding activities of the US National Security Agency (NSA). Since the Snowden leaks, it has been repeatedly reported that the Chinese government is working actively to wean government networks and financial systems off of IT products and services from foreign companies. The Draft Law is the government’s latest effort to consolidate existing security-related requirements and grant government agencies more security-related powers. On its face, the Draft Law does not discriminate against foreign products and services. However, designed to “safeguard cyberspace sovereignty and national security,” it could be implemented to become an additional hurdle for foreign companies seeking to access China’s vast market if and when it comes into effect.

The draft Network Security Law is a major, high-level step in implementing the government’s priorities in cyberspace and on information networks more broadly. The Draft Law is engineered to govern most activities that take place over “computer networks,” defined broadly in Article 65(1) to encompass essentially any “network or system, composed of computers or other terminals together with relevant devices, that serves to collect, store, transmit, exchange, or process information following predefined rules and procedures.” Compared to the much more general terms in the National Security Law, the seven chapters and 68 articles of the Draft Law provide more details on, among other things, security requirements for network-related products and services; data privacy; and monitoring and emergency response systems. The Draft Law attempts to (1) sort out and develop, in a more systematic way, existing but scattered legal requirements (e.g., obligations of network users to provide real identities and obligations of network operators to protect personal information of users), and (2) implement new, high-priority mandates such as provisions on the protection of critical information infrastructure.

Foreign investors should pay particular attention to the following proposals in the draft Network Security Law:

  • Procurement-Related Security Reviews for Network Products and Services. The Draft Law proposes that network products and services that operators of “critical information infrastructure” procure must pass a security review if they “may affect national security.” “Critical information infrastructure” is a new term that is defined broadly by the draft to include networks and systems in sensitive areas such as public communications, radio and television, energy, transportation, water, finance, utilities, healthcare, social security, military, and government administration. Furthermore, the definition also contains a loose catch-all for networks and systems that “have a large number of users.” The draft does not explain what would constitute a “large number,” but one could imagine it being interpreted broadly to cover, for instance, websites run by online service providers. This new security review requirement could have a significant impact on information technology companies that supply products or services to operators of “critical information infrastructure,” such as banks, utility companies, transport companies, and major websites.
  • Data Localization Requirements. Operators of what is deemed to be critical information infrastructure must store “important data” such as users’ personal information collected and generated during operations within PRC territory. If they seek to store or transfer such data overseas for business reasons, their request must pass a new government security assessment. The draft is unclear as to what, beyond personal information, would be considered to be “important data” for these purposes.
  • Government National Security Standards. The Draft Law proposes to formulate and revise national and industry standards on network safety management and on network products, services, and operations; grant government support to key industries and innovation projects related to network security technology; adopt a multi-level protection system on network security; and publish a catalogue on key network equipment and network security products. Given past experience, it is possible, if not likely, that such standards and policies may be formulated in a way that favors homegrown technologies, products, and services, particularly given the emphasis on national security.
  • Data Privacy Requirements. The Draft Law also consolidates a number of rules on data privacy and protection that are currently scattered across a range of laws and regulations, and adds some new ones — e.g., an expanded definition of personal information and notification requirements for data breaches. A discussion of the data privacy implications of the draft can be found on Covington’s privacy blog, Inside Privacy, here.

Companies, industry associations, and governments — both foreign and domestic — are advised to pay close attention to the development of this draft law as it may have important implications for the business environment in China. Those with more significant interests in the country may seek to further engage with Chinese policymakers to ensure that their interests are taken into consideration.

To learn more about the contents of the draft Network Security Law, read our e-alert on the topic here.

Material for this post was supplied by Shirleen Hong of Covington & Burling LLP.

OPINION: Bipartisan Trade Secrets Legislation Is Back

Posted in Congressional Action

Bipartisan, bicameral legislation is back. Acting to secure the valuable trade secrets of America’s most innovative and creative companies, a bipartisan group in both the Senate and the House introduced legislation on July 29 that will create a federal civil remedy for trade secret misappropriation.

Trade secrets are increasingly important to companies in all industry sectors and all sizes. From product designs for jet engines to the literal and figurative “secret sauce,” which can include the source code and data analytics that power Silicon Valley, trade secrets are an essential form of intellectual property. Often developed at great cost, they give companies a competitive edge in today’s challenging global markets and drive key segments of the U.S. economy. But trade secrets lack federal civil protection.

The Defend Trade Secrets Act of 2015 (S. 1890 and H.R. 3326) will fix that. The legislation will provide trade secret owners with the same access to federal court that copyright, trademark and patent owners already enjoy. The legislation is based on the same standards for trade secret protection, and remedies for misappropriation, that are found in the Uniform Trade Secrets Act and the Economic Espionage Act of 1996 (“EEA”), which will preserve the settled expectations about balance in trade secret law.

The act is supported by companies and associations in a broad array of industries, including biopharmaceutical, software, semiconductors, consumer goods, medical devices, automobiles, heavy equipment, chemicals, aerospace and agriculture. They know the risk of trade secret theft: Businesses are increasingly the target of sophisticated efforts to steal their proprietary information. Would-be thieves are looking to short circuit the years of expensive research and development that go into the innovative products and technologies produced by market-leading companies.

In this digital age, greater connectivity, increased data storage, and globalized supply chains have made trade secrets more vulnerable than ever before. But our laws remain stuck in a different era. The only civil remedy available to combat trade secret theft is an array of state laws that made sense when trade secret theft was largely a local matter — when a company’s greatest risk was that a competitor down the street would steal its customer list. But state laws are less appropriate for addressing the increasingly interstate and international nature of trade secret theft that occurs today. A federal civil remedy is needed.

The EEA makes it a federal crime to steal a trade secret used in interstate commerce, but, as a criminal law, it has important limitations. First, the U.S. Department of Justice lacks the resources to investigate and bring criminal charges in every case of interstate theft. (Indeed, the FBI reported in July that it has seen a 53 percent increase in its trade secret theft caseload in just the last year.) And, second, criminal law punishes the defendant, but the process for compensating the victim is unwieldy.

The Defend Trade Secrets Act fills this gap in trade secret law by creating a uniform, national standard for trade secret misappropriation, harmonizing U.S. law, and providing companies the tools to protect themselves. And, in narrow circumstances, the law provides for ex parte seizure relief when time is of the essence and the thief would not obey an injunction. The bill includes safeguards to ensure this relief is not abused.

For many of the most innovative companies, the Defend Trade Secrets Act is critical to their continued growth and ability to maintain good, well-paying jobs in the United States. Once a trade secret has been divulged or is made known to a competitor, trade secret protection may be lost forever, and the harm from disclosure is often irreparable.

Last year, Sen. Orrin Hatch, R-Utah, and Sen. Christopher Coons, D-Del., introduced the Defend Trade Secrets Act of 2014 (S. 2267), and similar legislation, the Trade Secrets Protection Act of 2014 (H.R. 5233), was subsequently introduced in the House of Representatives. Both the Senate and House Committees on the Judiciary held hearings on the legislation. The House Judiciary Committee voted without dissent to report the bill favorably just before the elections, and it was never considered by the full House.

The legislation, introduced last week by Sens. Hatch and Coons and four other senators in the Senate, and by Rep. Doug Collins, R-Ga., and Rep. Jerrold Nadler, D-N.Y., with 14 cosponsors in the House, builds on the hard work done in the last Congress on this important issue. It reflects a consensus that among our most valuable currency in the global marketplace is our knowledge and creativity. We must foster and protect it to continue to lead the world in creating new and original technologies, products and services. The Defend Trade Secrets Act will give companies an important tool with which to do that in an increasingly competitive world.

SAFETY First: Using the SAFETY Act to Bolster Cybersecurity

Posted in Congressional Action, Intellectual Property Protection

We have already seen tremendous fallout from recent cyber attacks on Target, the U.S. Office of Personnel Management, Sony Pictures, and J.P. Morgan.  Now imagine that, instead of an email server or a database of information, a hacker gained access to the controls of a nuclear reactor or a hospital.  The potential consequences are devastating: death, injury, mass property destruction, environmental damage, and major utility service and business disruption.  Now what if there were a mechanism that would incentivize industry to create and deploy robust and ever-evolving cybersecurity programs and protocols in defense of our nation’s critical infrastructure?

In late 2014, Representative Michael McCaul (R-TX), Chairman of the House Committee on Homeland Security, proposed legislation that would surgically amend the SAFETY Act, which currently offers liability protection to sellers and users of approved anti-terrorism technologies in the event of litigation stemming from acts of terrorism.  Rep. McCaul’s amendment would broaden this protection to cybersecurity technologies in the event of “qualifying cyber incidents.”  The proposed legislation defines a “qualifying cyber incident” as an unlawful access that causes a “material level[] of damage, disruption, or casualties severely affecting the [U.S.] population, infrastructure, economy, or national morale, or Federal, State, local, or tribal government functions.”  Put simply, under the proposed legislation, a cyber incident could trigger SAFETY Act protection without being deemed an act of terrorism.

The House Committee on Homeland Security plans to reconsider Representative McCaul’s 2014 amendment in the coming weeks.  In anticipation, the Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies held a hearing last week to examine whether the SAFETY Act framework ought to be leveraged as a tool in our effort to prevent the next big cyber attack.  As foreshadowed during the hearing testimony, we believe the time is right to seriously consider an extension of the SAFETY Act:

  1. Incentivize Cybersecurity Development: In its present form, the SAFETY Act has proven to be an effective tool to facilitate the development–and use–of anti-terrorism technologies. The protection has allowed companies to lean forward in innovation and deployment of anti-terrorism products and security programs, without the fear of unbounded liability. Although some cyber technologies are beginning to engage in the SAFETY Act program, those technologies are only protected in the case of an act of terrorism (which is a high bar–the Boston Marathon bombing was not declared an act of terrorism). This broadened scope of liability protections for proven cybersecurity technologies will incentivize providers of cybersecurity technologies to innovate, as the likelihood of requiring such protection is higher when, as with most cyber attacks, the perpetrator and his/her motives are not always known. Thus, the SAFETY Act can only reach its full cyber potential with an amendment.
  2. Furthermore, the SAFETY Act application process requires applicants to demonstrate the proven effectiveness of their technology, including the technology’s ability to adapt to evolving threats. Furthermore, an applicant must demonstrate to OSAI the continuous improvement of its technology in order to earn renewal of its protection. In other words, the SAFETY Act application process alone often compels an applicant to improve its technology.
  3. The Timing is Perfect: Not only is the country’s attention already focused on cybersecurity following high-profile cyber attacks, the Office of SAFETY Act Implementation (“OSAI”), which reviews all applications for protection has demonstrated the ability to evolve and address emerging technologies of increasing complexity and varying deployments. For instance, OSAI has recently granted protection to the Port Authority of New York/New Jersey for a sophisticated set of anti-terrorism technologies deployed at the World Trade Center and at multiple airports, and to four large sports stadiums for their multilayered security programs. Furthermore, waiting for a tragic cyber attack will ultimately make this effort more difficult, as the cybersecurity provider and insurance markets will dry up for fear of enterprise-threatening litigation.
  4. Complements Current Information-Sharing Bills: The attention from cyber attacks has sparked Congress to introduce information-sharing bills focusing on cybersecurity. Amending the SAFETY Act complements, and does not conflict with, these efforts. The amendment would broaden protection to include attacks that materially damage and severely affect the nation beyond information-sharing activities. It is also unclear whether the information-sharing bills as currently drafted would cover “downstream” suppliers of cyber technology to information-sharing companies, thus potentially eliminating some of their incentive to innovate. Working together, the information-sharing bills and an amended SAFETY Act would provide a “belt and suspenders” incentive regime, ultimately serving to improve the nation’s cyber profile.
  5. Stimulate the Cybersecurity Insurance Industry: The current market for cybersecurity insurance is quite limited, especially for key sectors, such as the energy, health, and financial industries. When available, such insurance is expensive and often contains significant exclusions. Amending the SAFETY Act to explicitly cover non-terror-based cyber incidents will expand the market, as sellers of cybersecurity technologies would be required to obtain certain levels of cybersecurity insurance in order to retain the protection offered by the SAFETY Act.

Markup if the amendment is expected by mid-September, and coalitions of industry are already forming in support of the amendment.

This Week in Congress — August 3, 2015

Posted in Congressional Action

With the House of Representatives having started its August recess last week, the Senate is the only game in town this week, as its members look to wrap up what remaining work they can and head home till after Labor Day.

The Senate starts the week on Monday with a cloture vote on a motion to proceed to legislation to defund Planned Parenthood.  The bill is a response to the recent release of a series of undercover videos in which Planned Parenthood officials discuss selling fetal body parts.  The vote, which will require a majority of 60 to pass, is doomed to fail as every Democrat and some Republicans have announced they intend to oppose the motion.

After the cloture vote, the Senate is expected to move to cybersecurity legislation, S. 754, the Cybersecurity Information Sharing Act (CISA), introduced by Intelligence Committee Chairman Richard Burr (R-NC).  The legislation is intended to encourage private sector entities to share information with the government regarding hacks and other cyber intrusions into their systems by providing legal immunity for those who do so.  The bill was reported by the Intelligence Committee 14-1.  Despite the lopsided vote in committee, a number of amendments that are intended to enhance privacy safeguards in the bill are expected.  Beyond germane amendments, it is unclear whether senators on either side of the aisle will use this final legislative vehicle before the August break to seek votes on unrelated, politically contentious matters.  The course of the debate and the prospects of completing consideration of CISA this week are therefore uncertain.  If the debate bogs down, look for the Senate to head home by the middle of the week.

Even if the Senate does pass its version of CISA this week, the bill will still have to be reconciled with two different bills, one from the Intelligence Committee and one from the Homeland Security Committee, that the House has passed before Congress can vote on a final cybersecurity bill.  Therefore, the road to final legislative action on the subject is far from clear.  And none of these various cybersecurity bills deal with what is perhaps the public’s main interest in the issue, which is the treatment of so-called “data breach” events in which customer data or other private information is stolen during a cyber-intrusion.

Besides the Planned Parenthood and cybersecurity bills, the Senate is likely to vote this week to confirm Adm. John Richardson to be Chief of Naval Operations.  Adm. Richardson was approved last week by the Armed Services Committee.

Once it completes its action for the week, the Senate will join the House in recess until after Labor Day.  The congressional calendar when both chambers return will be filled with time-sensitive and highly controversial issues, starting with the need to find a means of funding the government beyond the September 30 end of the fiscal year.  Last week, Speaker John Boehner acknowledged what had long been evident, that Congress would be unable to enact appropriations bills and would, instead, have to fund the government through a continuing resolution.  In addition to having to figure out a way to fund the government, Congress will have to address the Iran nuclear deal when it returns.  Under legislation enacted earlier this year, Congress has 60 days from the submission of the proposal by the President to reject the deal.  That timeline runs out in mid-September, so we can expect debate over the Iran nuclear deal to absorb much of the time in both chambers when Congress returns.  Given the confluence of a number of complex and controversial issues that will require action and the limited number of days available to Congress in September (fewer than a dozen due to the late Labor Day and the Jewish holidays), the August recess looks as if it is the calm before a hurricane of activity when Congress returns.

The hearing schedule is lighter than normal this week, but there are a few hearings of great interest.  The Foreign Relations Committee continues with its review of the Iran nuclear deal with a closed briefing and it also will hold a hearing on nuclear proliferation on Tuesday.  The Banking Committee will hold a hearing on Wednesday looking at the impact of  the Iran deal on terrorist financing, in light of Iran’s record as the leading support of global terrorism.  Opponents of the deal fear that the lifting of sanctions will give the Iranian government and its terrorist proxies the ability to obtain more weaponry and expand their activities throughout the region and the world.  Under Secretary of State Wendy Sherman for political affairs and Acting Under Secretary of the Treasury Adam Szubin for terrorist and financial crimes will testify, along with a second panel of experts.

Other notable hearings this week include a rare look at the federal prison system by the Homeland Security and Governmental Affairs Committee on Tuesday, a review of the Higher Education Act by the Health, Education, Labor and Pensions Committee on Wednesday, and oversight of the Navy’s nuclear carrier program by the Armed Services Committee.  Finally, on Wednesday the Judiciary Committee will hold an oversight hearing of the Justice Department’s decision to restrict access of its Inspector General with respect to certain criminal investigative records.  Judiciary Committee Chairman Charles Grassley (R-IA) is a leading backer of the various agency inspectors general and will certainly use the hearing to attack the Justice Department’s decision.

With the Senate leaving town by the end of this week, both chambers will be dark until after Labor Day.  This column too will take a break during the recess and will resume as Congress prepares to return to session in September.

Monday, August 3, 2015 

House Committees 

Biscayne National Park Access Issues
Natural Resources & Small Business
Committees Joint Hearing
Aug. 3, 10 a.m., William F. Dickinson Community Center, 1601 N. Krome Ave., Homestead, Fla.

Tuesday, August 4, 2015 

Senate Committees

Environmental Litigation Oversight
Environment and Public Works
Full Committee Hearing
9:30 a.m., 406 Dirksen Bldg.

Nuclear Proliferation Oversight Issues
Foreign Relations
Full Committee Hearing
10 a.m., 419 Dirksen Bldg.

Federal Prison System Oversight
Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Foster Care Issues
Finance
Full Committee Hearing
10 a.m., 215 Dirksen Bldg.

Pending Nominations
Foreign Relations
Full Committee Confirmation Hearing
2:30 p.m., 419 Dirksen Bldg.

Intelligence Issues
Select Intelligence
Full Committee Closed Briefing
3 p.m., 219 Hart Bldg.

Wednesday, August 5, 2015

Senate Committees

Iran Sanctions Relief
Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

Higher Education Act Reauthorization
Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., 430 Dirksen Bldg.

Oversight of Inspector General Access to Records
Judiciary
Full Committee Hearing
10 a.m., 106 Dirksen Bldg.

Thursday, August 6, 2015

Senate Committees

Intelligence Issues
Select Intelligence
Full Committee Closed Briefing
2:30 p.m., 219 Hart Bldg.

Regulatory Oversight Issues
Homeland Security and Governmental Affairs – Subcommittee on Regulatory Affairs and Federal Management
Subcommittee Hearing
9 a.m., 342 Dirksen Bldg.

Navy Aircraft Carrier Program Review
Armed Services
Full Committee Hearing
9:30 a.m., G50 Dirksen Bldg.

Obama in Kenya: A report from the field and a recap of the Global Entrepreneurship Summit

Posted in Africa

The nation of Kenya was gripped by a palpable sense of excitement and outsized expectations prior to President Obama’s arrival on Friday, July 24. On the day the president arrived, offices in Nairobi were closed, banks shut down early, and the city’s emptied streets were adorned with American flags and ubiquitous posters conveying the message, “Welcome Home Obama.” One television station devoted full-time coverage to the visit.

The tenor of expectation was captured by Macharia Gaitho, a columnist for the Daily Nation, who wrote that Obama’s trip to Kenya was “the most important visit by a foreign leader since independence.” While seemingly excessive, several well-regarded business leaders strongly agreed with the sentiment.

There was no question that Obama’s visit would be a boost to Kenya’s confidence, shaken by al-Shabab’s horrific attacks on the Westgate Mall and Garissa University, and the uncertainty of the nation’s relationship with the U.S. given the International Criminal Court indictments of President Uhuru Kenyatta (since dropped due to a lack of evidence) and Vice President William Ruto. Many Kenyans have also questioned why it took Obama six years since coming into office to visit his father’s homeland.

However, all doubts about Kenya’s standing with the U.S. seemed to evaporate when President Obama bound down the steps of Air Force One and embraced a waiting President Kenyatta at the foot of the stairs. The president then received a bouquet of flowers from a nine-year-old girl and proceeded to greet the dignitaries aligned on the red carpet.

Most emotive was the president’s warm embrace of his older half-sister, Auma Obama, last in the greeting line. Auma then got into the president’s limousine and the two took off, embedded in a large train of security vehicles, for the hotel and a family reunion.

Twenty-seven years earlier, in a story that was repeated often in the press over the weekend, Auma had picked up a 25-year-old Barack Obama at Jomo Kenyatta International Airport on his first visit to Kenya. Shortly after leaving the airport, her aged VW Beetle broke down. The story added poignancy to the sight of the two leaving the airport in the presidential limousine as well as a sense that a definitive new chapter in U.S.-Kenyan relations was beginning. And, as Auma quipped two days later while introducing her half-brother for his speech to the nation, she appreciated the returned favor of a ride from the airport.

President Obama uses the energy around his visit to promote entrepreneurship

At the core of Obama’s visit was a debate over Kenya’s identity. Was the nation a “hotbed of terror” as CNN reported on the eve of Obama’s arrival, or, as President Kenyatta rebutted in his opening to the Global Entrepreneurship Summit, a “hotbed of vibrant culture, spectacular natural beauty, and infinite possibility”?

The president’s participation in the Global Entrepreneurship Summit (GES) in Nairobi underscored his belief that entrepreneurship is the “spark of prosperity,” and that people around the world, especially young people, want to start businesses to improve their lives and communities. He similarly expressed his belief in a rising continent during the trip, declaring on several occasions that “Kenya’s on the move, Africa’s on the move,” and emphasizing the country’s strong middle class, high economic growth, and entrepreneurial spirit. He also noted that, in 2006 when he visited South Korea, the Asian nation’s economy was 40 times larger than Kenya’s, and, since then, that gap has been cut in half. The president, though, was not overly optimistic: In his frank, even personal, speech to the nation, Obama still identified corruption, tribalism, and ethnicity, and a lack of investment in women and girls’ education as the country’s most significant challenges, specifically pointing out that corruption costs the nation 250,000 jobs a year.

Western and African entrepreneurs face different challenges

Against this backdrop, the Global Entrepreneurship Summit provided the rationale for Obama’s visit to Kenya. The GES, launched in 2009 in Cairo, is especially relevant in Africa where 10-12 million youth enter the labor market every year, and youth remain almost twice as likely to be unemployed as their elders. Over the course of two days at the sprawling United Nations campus on the outskirts of Nairobi, entrepreneurs from Kenya, Africa, and more than 100 countries had the opportunity to network with each other, interact with leading start-up executives from the U.S., and hear from venture capitalists from Silicon Valley.

A principal theme that emerged from numerous conversations and panels was the difference in scale and experience between entrepreneurs in the U.S. and Africa. Entrepreneurs in the U.S. want to “disrupt” existing platforms to enhance their impact and value. Entrepreneurs in Africa share the desire to impact their communities and generate income, but they largely have to create systems and platforms that do not exist.

One venture capitalist from Silicon Valley commented that capital is usually invested in start-ups that already have products and have identified employees for key functions. Start-ups in Africa, however, are frequently self-funded and dependent on finding a commercial niche that enables them to be sustainable. Most will never attract venture capital, and finding skilled employees is a major problem. As one entrepreneur from Ethiopia remarked, her business is “me, myself, and I,” even though she has hired 10-20 employees to fill orders as they come in. Western entrepreneurs think about their businesses as being part of an eco-system. In Africa, it seems that entrepreneurs are more focused on being part of a value chain and finding a market for their products. As one conference participant put it, entrepreneurship in Africa is about turning challenge into opportunity.

Compelling start-ups abound around the African continent

Many African entrepreneurs at GES presented compelling stories. As Dr. Shadi Sabeh, the founder of the Brilliant Footsteps Academy in Sokoto, Nigeria, put it, “My goals are to make money, positively impact my community, and do what I love to do, which is to teach.” Sabeh’s school, which has grown to a staff of 120 and 500 students in three years, is dedicated to integrating formal and informal Islamic instruction in an effort combat extremism and promote peace in northern Nigeria.

Hello Tractor, founded by Jehiel Oliver, is a startup in Abuja, Nigeria that uses mobile phone technology and GPS to make tractors available to farmers on a rental basis to lower the cost of the machines, enhance their use, and ensure they have proper maintenance. The start-up has received $180,000 in funding and aims to service 110,000 farmers and create 1000 jobs.

Eco-pads is a start-up in Kampala, Uganda founded by Lucy Athieno with a $25,000 grant from the U.S. African Development Foundation that makes re-useable sanitary napkins available to 800 girls to enable them to stay in school. Sales have more than doubled in size over the last year.

Tamarind Nott started a company in 2012 that relies on the traditional knowledge of the Himba women in Namibia to produce a skin cream called Namibian Myrrh that is available in Namibia and, via web sales, in South Africa.

U.S. companies provide mentoring for African and global entrepreneurs

Several American companies clearly had relevance for African entrepreneurs. A representative from a leading ride-sharing service noted that companies need to be clear about what is negotiable and what is non-negotiable. For example, given that some developing market legal systems are not ready for a shared economy, it is possible to pay for an ride in Nairobi by cash whereas the company requires electronic payments in most other markets.

A former representative from a leading social media platform noted that its service was developed by engineers in California for smartphone high-speed connectivity. In Lagos, however, as the company’s engineers have come to understand, most smartphones did not have enough memory and only 2G networks are available, so they have had to rework the platform for the Nigerian market. The lesson imparted here: New products should be adaptable to different environments.

Perhaps most interesting to me for African entrepreneurs was Ross Baird of the successful Village Capital who emphasized that it is essential to know where the market will be in 20-30 years and discussed how to position a company to grow into that market. As a result, Village Capital has focused on early phase investments in African start-ups at a range between $50,000 and $500,000. The firm has made 114 venture deals of less than $1 million over the last year. Village Capital has also pioneered (and recommended) peer-to-peer due diligence—in which 10-12 entrepreneurs collectively determine where their investments will have the largest impact—which has now become a key part of investment decisions. In addition, Baird noted that a focus on women entrepreneurs has also been a priority, as women-owned businesses generally have a track record of success, and last year 30 percent of Village Capital’s investments went to women-owned businesses.

Obama and Kenya

In the course of his visit, Obama signed a number of agreements related to fighting terrorism, obstructing corruption, and promoting trade and investment. Yet perhaps his most significant “deliverable” was the candor with which he spoke to the Kenyan people and his example of overcoming tremendous odds to assume the most powerful position on earth. This message also resonated with the approximately 1500 entrepreneurs who participated in GES and frequently face significant challenges in ensuring the success of their businesses.

When President Obama began his speech to the nation, he noted that he was the first U.S. president to visit Kenya. He also noted that he was the first Kenyan-American to be elected president of the United States, an observation he has rarely, if ever, publicly made before. In doing so, Obama emphasized his connection to the Kenyan people in a way that only he could and, as one Kenyan put it, redefined the Kenyan dream.

Witney Schneidman is a nonresident fellow at the Africa Growth Initiative in the Global Economy and Development program of the Brookings Institution. A version of this piece was first posted on Brookings’ Africa in Focus blog.

This Week in Congress – July 27, 2015

Posted in Congressional Action

Highway funding remains at an impasse in Congress this week, as the House and Senate continue to debate how to extend funding for the program and for how long that extension should last.  The House already passed a five-month extension, but the Senate is attempting passage of a long-term bill.  Meanwhile, the July 31 expiration date of the current program is approaching.

The Senate formally proceeded to consideration of a three-year, roughly $40 billion highway bill on Thursday by a vote of 51-26 after a 62-36 vote to invoke cloture on the motion to proceed to the bill, and remained in session over the weekend to begin consideration of amendments.  Majority Leader Mitch McConnell filed cloture on two amendments that were offered to the bill on Friday: his own amendment to repeal the Affordable Care Act and an amendment by Senator Mark Kirk (R-IL) and Senator Heidi Heitkamp (D-ND) to reauthorize the Export-Import Bank.  Even though the House has voted more than 50 times to repeal the Affordable Care Act in part or in full, the Senate has not gone on record in the 114th Congress to overturn President Obama’s signature law.  It is unlikely that the Majority Leader’s amendment will garner enough support, given that Republicans control 54 seats in the chamber and the amendment would need 60 votes to pass.  Conversely, even though several conservative Republican Senators oppose reauthorization of the Export-Import Bank, the Kirk amendment is expected to pass because of strong Democratic support for the agency.  The charter of the Export-Import Bank expired at the end of last month, and the highway bill has been viewed as the must-pass vehicle to which the Senate could attach reauthorization language.  House leaders oppose the Senate effort to add the reauthorization of the Bank to the highway bill, while President Obama is demanding it be included in any highway reauthorization bill sent to him for signature.

At this point, Leader McConnell is seeking to block any other non-germane amendments from coming up before a final vote on the highway bill.  Majority Leader McConnell has “filled the tree,” preventing other amendments from being offered, but he is likely working with the bill managers for an agreement on the number of germane amendments that can be considered before moving towards final passage.  Leader McConnell also proposed an amendment that would extend the highway program for two months if a deal on the longer-term bill cannot be achieved.

House Republican leadership is strongly opposed to the Senate highway bill.  The House passed its own bill two weeks ago that would provide for a five-month extension of the current highway program, using $8 billion in offsets, largely from enhanced tax-compliance measures, that will supplement Highway Trust Fund receipts derived from the gas tax.  Republican leadership supported the short-term measure, hoping the extension will allow Congress more time to negotiate a longer-term reauthorization before the December deadline contained in the House bill.  Should the Senate pass its long-term reauthorization this week, chances for passage in the House are slim.  House Republicans and Democrats alike have voiced concerns about the funding offsets currently included in the Senate bill.  House conservatives are also opposed to resurrecting the charter for the Export-Import Bank, should it be included in the Senate bill.  The Senate may be forced to take up the short-term House extension if a strategy for the long-term bill is not reached, especially given the congressional calendar- the current program has a July 31 deadline and congressional recess is scheduled to begin for the House of Representatives at the end of this week.  How House leaders will respond to a two-month extension of the highway program, if that is all the Senate can pass, is unclear at this point.  Given that a two-month extension would end concurrent with the end of the fiscal year, given how few days Congress will be in session in September and how much needs to be done to keep the government open past the end of the month (discussed below), House leaders may continue to insist on their five-month extension of the program.  And how the Export-Import Bank fits into the highway dynamic further complicates the discussion.  As a result, it should be a very interesting week as House members look to their August recess (the Senate is scheduled to be in session for the first week of August).

The House is scheduled to return on Monday, and take up 17 bills under suspension of the rules.  More than half these bills are from the Homeland Security Committee, while two each are from the Resources, Judiciary, and Veterans Affairs Committees, with the remaining three bills from other committees.  On Tuesday the House is expected  to take up H.R. 427, the Regulations from the Executive in Need of Scrutiny (REINS) Act of 2015, a bill that aims to increase transparency in the federal regulatory process.  The REINS Act would require federal agencies to submit any major rule with an annual economic impact of $100 million or more to Congress for approval before the rule could take effect.  This legislation passed the House previously in 2011 and 2013 but it stands no chance of passage in the Senate and is opposed by the President.  When debate on the REINS Act is completed, the House will consider H.R. 1994, the VA Accountability Act, an oversight and reform proposal for the Department of Veterans Affairs.  Among other provisions, this bill would further curtail employee-appeal rights for VA employees faced with termination.  Another veterans bill that the House may consider this week prior to the August recess is the VA Budget and Choice Improvement Act, legislation to direct the Secretary of Veterans Affairs to develop a plan to consolidate VA programs  that furnish hospital and medical care to veterans at non-VA facilities into a single, new program.  Finally, the House floor schedule leaves room for the chamber to consider the conference report on the National Defense Authorization Act if the House-Senate conference is able to complete its work on the legislation.

Congressional leaders acknowledged this week what has been clear all along, that efforts to pass appropriations bills to fund the government past the end of the fiscal year on September 30 have failed.  Speaker of the House John Boehner (R-OH) conceded to reporters last week that Congress will have to pass a continuing resolution (CR) to fund the government when the current fiscal year ends.  Speaker Boehner acknowledged that there are limited legislative days on the calendar in September when Congress returns from the August recess, and there is not nearly enough time to wrap up the annual appropriations process in both chambers.  Even though the House Appropriations Committee has cleared all 12 of the annual appropriations bills, only half of those bills have been approved by the full House and a seventh bill was pulled from the floor due to a dispute over the Confederate battle flag.  The Senate Appropriations Committee has also been successful in marking up the 12 annual bills, but Senate Republicans have been unable to bring a single funding measure to the floor due to a Democratic filibuster focused on the funding levels in the bills.  Republican majorities in both chambers worked under the spending limits established in the 2011 sequester, but Senate Democrats have blocked the entire appropriations process due to objections of those spending limits and so-called “budget gimmicks” that increased only defense funding for FY 2016.  Further, President Obama has pledged to veto any appropriations measure at current funding levels.  Congressional Democrats have been pushing for a bipartisan summit to negotiate a new budget framework, but Republicans have not indicated a willingness to work out a deal to increase the spending caps.  Even though a CR will be necessary to avoid a government shutdown this fall, it remains unclear how long the extension will last and how leadership and appropriators in both chambers will come to agreement.

Iran remains a major focus of congressional scrutiny this week.  As established by the Iran Nuclear Review Act (P.L. 114-17), the House and Senate have 60 days to review and consider the multilateral nuclear agreement, reached by international negotiators earlier this month, and ultimately vote for approval or disapproval.  The 60-day clock started on July 20, when the Administration officially presented the agreement to Congress.  After testifying before an intense hearing in the Senate Foreign Relations Committee last week, Secretary of State John Kerry, Secretary of Energy Ernest Moniz, and Secretary of the Treasury Jacob Lew will appear as witnesses before the House Foreign Affairs Committee on Tuesday morning.  The House Select Intelligence Committee will also have a closed session on Tuesday to discuss Iran issues, while the House Armed Service Committee will hold a Wednesday hearing on the regional implications of the Iran deal.  Congressional Republicans have been highly critical of the terms reached by international negotiators and the Islamic Republic.  Press reports indicate Speaker Boehner has stated that the House will do “everything possible” to block the Iran nuclear deal.  While House Republicans may have enough votes to pass a resolution of disapproval to block the deal should the majority decide not to support it, Senate Republicans would have to peel off a number of Democrats in order to be able to invoke cloture and pass a disapproval resolution.  And if a disapproval resolution can be passed by both chambers, President Obama has pledged to “veto any legislation that prevents the successful implementation of this deal.”  It is not clear whether enough Democrats in either the Senate or the House would support an effort to override a presidential veto.  One core problem for opponents of the deal in Congress is that the President and his international partners secured United Nations Security Council approval for the deal last week.  In effect, the international sanctions that wrought havoc on the Iranian economy and forced Iran to the negotiating table will come to an end.  Even if Congress rejects the deal and can somehow override the President’s veto, which as noted is highly unlikely, the impact of U.S. rejection of the deal will be marginal at best, and Iran has effectively prevailed in vindicating its interests.  Whether the deal in fact will make the region safer, only time will tell, and proponents of the deal have the hope of success as their basic argument.

Also possible for upcoming consideration in the Senate is a comprehensive energy reform bill, set to be considered by the Senate Energy and Natural Resources Committee this Tuesday.  The bipartisan measure was introduced last week by Committee Chairwoman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA).  Assuming the bill is approved by the Committee, as is likely given the bipartisan agreement, the bill is a candidate for floor consideration after the August recess.

Cybersecurity legislation is also of interest on Capitol Hill this week. There are two hearings scheduled in the House: the Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies meets on Tuesday to discuss best practices and the House Select Intelligence Committee meets Thursday for a hearing on global cybersecurity threats. On the other side of the Capitol, Senate Republican leadership has indicated they would like to bring to the floor the Cybersecurity Information Sharing Act (CISA), a bill that would encourage greater exchange of public and private data on hackers, before the recess, once consideration of the highway bill is completed.  The House has passed its version of CISA earlier this year.

A detailed hearing schedule for the House and Senate is included below:

Tuesday, July 28, 2015

House Committees

Congressional Budget Process
House Budget
Full Committee Hearing
10 a.m., 210 Cannon Bldg.

HHS Policy Review
House Education and the Workforce
Full Committee Hearing
10 a.m., 2175 Rayburn Bldg.

Defense Department Anthrax Shipments
House Energy and Commerce – Subcommittee on Oversight and Investigations
Subcommittee Hearing
10 a.m., 2123 Rayburn Bldg.

FCC Oversight
House Energy and Commerce – Subcommittee on Communications and Technology
Subcommittee Hearing
10:15 a.m., 2322 Rayburn Bldg.

Dodd-Frank Assessment
House Financial Services
Full Committee Hearing
10 a.m., 2128 Rayburn Bldg.

Iran Nuclear Deal
House Foreign Affairs
Full Committee Hearing
10 a.m., 2172 Rayburn Bldg.

Heroin Abuse
House Judiciary – Subcommittee on Crime, Terrorism, Homeland Security and Investigations
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

Coastal Zone Management Law
House Natural Resources – Subcommittee on Energy and Mineral Resources
Subcommittee Oversight Hearing
10 a.m., 1334 Longworth Bldg.

Interior Department Law Enforcement Issues
House Natural Resources – Subcommittee on Oversight & Investigations
Subcommittee Oversight Hearing
10:30 a.m., 1324 Longworth Bldg.

Ex-Im Bank
House Oversight and Government Reform
Full Committee Hearing
10:30 a.m., 2154 Rayburn Bldg.

Intelligence Report and Iran Issues
House Select Intelligence
Full Committee Closed Hearing
10 a.m., HVC-304 Capitol Visitor Center

Space Exploration
House Science, Space and Technology
Full Committee Hearing
10 a.m., 2318 Rayburn Bldg.

Maritime Measures
House Transportation and Infrastructure – Subcommittee on Coast Guard and Maritime Transportation
Subcommittee Hearing
10 a.m., 2253 Rayburn Bldg.

Medicare Regulations and Rural Health
House Ways and Means – Subcommittee on Health
Subcommittee Hearing
10 a.m., 1100 Longworth Bldg.

Financial Services Bills
House Financial Services
Full Committee Markup
2 p.m., 2128 Rayburn Bldg.

Iran-North Korea Relations
House Foreign Affairs – Subcommittee on Asia and the Pacific; House Foreign Affairs – Subcommittee on Terrorism, Nonproliferation, and Trade; House Foreign Affairs – Subcommittee on the Middle East and North Africa
Subcommittees Joint Hearing
3 p.m., 2172 Rayburn Bldg.

Cybersecurity Best Practices
House Homeland Security – Subcommittee on Cybersecurity,  Infrastructure Protection and Security Technologies
Subcommittee Hearing
2 p.m., 311 Cannon Bldg.

Sanctions, Divestment and Boycotts
House Oversight and Government Reform – Subcommittee on National Security
Subcommittee Hearing
2 p.m., 2247 Rayburn Bldg.

Multiemployer Pension Plan Issues
House Ways and Means – Subcommittee on Select Revenue Measures
Subcommittee Hearing
2 p.m., 1100 Longworth Bldg.

Senate Committees

Crude Oil Export Issues
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

Business Meeting (20 Agenda Items)
Senate Energy & Natural Resources
Full Committee Business Meeting
10 a.m., 366 Dirksen Bldg.

Diplomatic Security Training Facility
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Intelligence Issues
Senate Select Intelligence
Full Committee Other Event
2:30 p.m., 219 Hart Bldg.

Joint Committees

Dynamic Scoring
Joint Economic
Full Committee Hearing
2 p.m., 216 Hart Bldg.

Wednesday, July 29, 2015

House Committees

Dodd-Frank and Global Derivatives
House Agriculture
Full Committee Hearing
10 a.m., 1300 Longworth Bldg.

Iran Deal’s Regional Implications
House Armed Services
Full Committee Hearing
10 a.m., 2118 Rayburn Bldg.

ISIS and the Role of Women
House Foreign Affairs
Full Committee Hearing
10 a.m., 2172 Rayburn Bldg.

TSA and Aviation Security
House Homeland Security
Full Committee Hearing
10 a.m., 311 Cannon Bldg.

Internet Connectivity Issues
House Judiciary – Subcommittee on Courts, Intellectual Property and the Internet
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

Endangered Species Act Consultation
House Natural Resources
Full Committee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

EPA Management Issues
House Oversight and Government Reform
Full Committee Hearing
9 a.m., 2154 Rayburn Bldg.

NRC Licensing Process
House Science, Space and Technology – Subcommittee on Energy
Subcommittee Hearing
9 a.m., 2318 Rayburn Bldg.

Benghazi Events
House Select Committee on Benghazi Attack
Full Committee Hearing
10 a.m., HVC-210 Capitol Visitor Center

Veterans Affairs Measures
House Veterans’ Affairs
Full Committee Markup
10:30 a.m., 334 Cannon Bldg.

Pakistan and Minority Rights
House Foreign Affairs – Subcommittee on Africa, Global Health, Global Human Rights and International Organizations
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Press Rights in the Americas
House Foreign Affairs – Subcommittee on the Western Hemisphere
Subcommittee Hearing
3 p.m., 2172 Rayburn Bldg.

Senate Committees

Bankruptcy Overhaul
Senate Banking, Housing and Urban Affairs – Subcommittee on Financial Institutions and Consumer Protection
Subcommittee Hearing
10 a.m., 538 Dirksen Bldg.

Wireless Broadband Spectrum
Senate Commerce, Science and Transportation
Full Committee Hearing
10:30 a.m., 253 Russell Bldg.

North Korea and National Security
Senate Foreign Relations – Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy
Subcommittee Hearing
10 a.m., 419 Dirksen Bldg.

Higher Education Renewal and Campus Assaults
Senate Health, Education, Labor and Pensions
Full Committee Hearing
9 a.m., 216 Hart Bldg.

Government Affairs Nomination and Measures
Senate Homeland Security and Governmental Affairs
Full Committee Markup
10 a.m., 342 Dirksen Bldg.

Shipyards Practices
Senate Armed Services – Subcommittee on Readiness and Management Support
Subcommittee Hearing
2:30 p.m., 232A Russell Bldg.

Substance Abuse in Native Communities
Senate Indian Affairs
Full Committee Oversight Hearing
2:15 p.m., 628 Dirksen Bldg.

IRS Targeting Overview
Senate Judiciary – Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts
Subcommittee Hearing
2 p.m., 226 Dirksen Bldg.

Homeless Veterans Issues
Senate Veterans’ Affairs
Full Committee Hearing
2:30 p.m., 418 Russell Bldg.

Thursday, July 30, 2015

House Committees

Avian Flu Response
House Agriculture – Subcommittee on Livestock and Foreign Agriculture
Subcommittee Hearing
8:30 a.m., 1300 Longworth Bldg.

U.S. Border Violence
House Oversight and Government Reform
Full Committee Hearing
9 a.m., 2154 Rayburn Bldg.

U.S. Power Supply Vulnerabilities
House Science, Space and Technology – Subcommittee on Oversight; House Science, Space and Technology – Subcommittee on Energy
Subcommittees Joint Hearing
9 a.m., 2318 Rayburn Bldg.

Global Cybersecurity Threats
House Select Intelligence
Full Committee Hearing
9 a.m., HVC-210 Capitol Visitor Center

Senate Committees

Corporate Tax Code
Senate Homeland Security and Governmental Affairs – Permanent Subcommittee on Investigations
Subcommittee Hearing
9:30 a.m., 342 Dirksen Bldg.

Intelligence Issues
Senate Select Intelligence
Full Committee Other Event
2:30 p.m., 219 Hart Bldg.

Ghana Set to Ban Non-Degradable Plastics

Posted in Africa

According to news reports, the Ghanaian Ministry of Environment, Science, Technology and Innovations will “sanction a directive in two weeks” banning the production and importation of non-degradable plastic products.

Like many countries, Ghana’s rapid development has put significant pressure on sanitation management systems in the country’s urban centers.  However, the issue became a national priority when waste-clogged drains and gutters contributed to last month’s tragic floods in the capital city of Accra.  The proposed ban follows weeks of comments from President John Mahama, Vice-President Kwesi Amissah-Arthur and the general public about the role that plastic waste in particular played in the disaster.  Ghana will be joining a host of other African countries that have instituted similar measures to curb or outright ban the import, manufacture and/or use of plastics especially very thin plastics.  The list of countries that have instituted similar measures includes  Botswana, Burundi, Kenya, Mauritania, Tanzania, Rwanda, Senegal, South Africa, and Uganda.

This post can also be found on Cov Africa, the firm’s blog on legal, regulatory, political and economic developments in Africa.

This Week in Congress – July 20, 2015

Posted in Congressional Action

Congress will be focusing on two major deadlines this week, as members stare down the July 31 expiration of the current highway program and start the clock, set by bipartisan legislation approved earlier this year on review and consideration of the multilateral nuclear deal reached last week with Iran.

The Senate is scheduled to return on Tuesday with a cloture vote scheduled on H.R. 22, the legislative vehicle for the Senate version of a multi-year highway-funding reauthorization. The current extension expires July 31, leaving Congress once again scrambling to produce a long-term reauthorization that is adequately funded, or continue enacting short-term extensions.  The House unexpectedly trumped the Senate by moving first on a highway bill last week, passing legislation by a vote of 312-119.  The House-passed bill would provide for a five-month extension of the current program, using $8 billion in offsets, largely from enhanced tax-compliance measures, that will supplement Highway Trust Fund receipts derived from the gas tax.  Republican leadership supported the measure, hoping the short-term extension will allow Congress more time to negotiate a longer-term reauthorization in the coming months.

Across the Capitol, Senate Majority Leader Mitch McConnell (R-KY) is aiming for the Senate to produce a multi-year proposal, which is strongly supported by Senate Democrats, who have threatened to oppose another short-term extension of the highway program.  Republicans and Democrats are engaged in talks to find sufficient support for such a bill.  Last week, Senate Finance Committee Chairman Orrin Hatch (R-UT) offered offsets of $80 billion to pay for a six-year highway bill.  Many of the components of the proposal were immediately attacked by different senators.  Included among Chairman Hatch’s offsets was a proposal to save $32 billion from changes to federal employee retirement programs, which was promptly attacked by Democratic senators, and a proposal to save $17 billion from a reduction in interest paid to banks by the Federal Reserve, which was promptly opposed by Fed Chairman Janet Yellen and Senate Banking Committee Chairman RIchard Shelby (R-AL). Although other portions of Chairman Hatch’s proposed offsets are less controversial, with an increase in the federal gas tax off the table due to opposition from Republican leaders in both chambers, it remains unclear if the Senate can reach a consensus before July 31 on the funding for a long-term highway bill.  If not, it is likely to follow the House and approve an extension to the end of the year, during which time leaders in both chambers will continue to look for funding mechanisms, including the possibility of some type of international corporate tax reform, to cover the cost of a long-term highway bill.

As has been widely discussed for weeks, the Senate highway bill is the likely vehicle for consideration of the reauthorization of the Export-Import Bank, which technically expired at the end of June.  In a test vote last month, more than 60 senators voted in favor of extending the Bank’s charter, showing that Bank proponents have the votes needed to cut off a filibuster, which has been threatened by Senator Ted Cruz (R-TX), a vocal critic of the Bank.  Inclusion of the Bank’s reauthorization will make a short-term highway bill more palatable to Democrats in both chambers. House Republican Majority Leader Kevin McCarthy (R-CA) and House Ways and Means Committee Chairman Paul Ryan (R-WI) have expressed their opposition to including the reauthorization of the Export-Import Bank in the highway bill.

The House has a very light schedule this week and its upcoming agenda is unknown, largely due to patent-litigation reform and Interior Appropriations measures being scrapped from floor consideration.  As highlighted in last week’s column, the House has not yet found a strategy for moving forward with consideration of the Interior-Environment Appropriations bill, which ended prematurely in a dispute over the Confederate battle flag.  Also noteworthy is the continued absence of the patent-litigation reform bill, H.R. 9, from the floor schedule.  H.R. 9 had initially been included for July action in Majority Leader Kevin McCarthy’s planned schedule for the month after a lopsided vote in favor of the bill in the Judiciary Committee..  Press reports indicate that rising opposition to the bill from various industries has weakened support for the bill and resulted in a postponement of the bill’s consideration until after the August recess in order to allow bill sponsor, Judiciary Committee Chairman Bob Goodlatte (R-VA) to rebuild support for the measure, which had passed in the previous Congress with 325 votes in favor.  With little on the House schedule and a short-term extension of the highway program passed, it may be a strategic move for House leadership to adjourn for the scheduled August recess at the end of this week instead of the following week to preclude the Senate from sending a new version of the highway bill, with the Export-Import Bank extension included in it, back to the House for consideration.  Such a maneuver would force the Senate simply to accept the short-term, House-passed highway bill and leave supporters of the Export-Import Bank in both chambers struggling to find another must-pass vehicle for their effort to restore the Bank’s charter, which would have to await September, at the earliest.

The House is scheduled to return on Tuesday and take up four non-controversial bills under suspension of the rules.  On Wednesday, the House will turn to H.R. 1734, the Improving Coal Combustion Residuals Regulation Act of 2015.  The bill would eliminate the implementation issues associated with the Environmental Protection Agency’s final rule on coal ash and set up enforceable state permitting programs. After that bill, the House is expected to take up H.R. 1599, the Safe and Accurate Food Labeling Act of 2015.  This legislation would require a national standard for labeling laws related to genetically-modified organisms (GMOs) in foods, rather than the patchwork of state laws that have been enacted or are under consideration by state legislatures across the country.

The VA Accountability Act, H.R. 1994, an oversight and reform proposal for the Department of Veterans Affairs, may also be considered by the House this week.  Among other provisions, this bill would further curtail employee-appeal rights for VA employees faced with termination.  Additionally, there is potential for the House to take up a bill tackling comprehensive energy policy, currently being crafted by the House Energy and Commerce Committee, and legislation to increase transparency in the federal regulatory process.  Two other items that could be considered this week, depending on whether bicameral conference committees can wrap up their work, are the conference report on customs enforcement legislation and the conference report on the National Defense Authorization Act.

Off the floor, much of the debate on the Hill this week will be centered on the Iran Nuclear Agreement, reached by international negotiators last week.  The Obama Administration will be ramping up its lobbying efforts to drum up congressional support for the agreement. Press reports indicate that Vice President Joe Biden and the President’s deputy National Security Advisor, Ben Rhodes, have already begun briefings with Democratic members, who will be crucial to congressional approval of the agreement.  As established by the Iran Nuclear Review Act (P.L. 114-17), the Administration has five days to certify the international agreement and present it to Congress.  The House and Senate then have 60 days to review and consider the agreement, and ultimately vote for approval or disapproval.  President Obama has pledged to “veto any legislation that prevents the successful implementation of this deal.”  While House Republicans may have enough votes to pass a resolution of disapproval to block the deal should the majority decide not to support it, Senate Republicans would have to peel off a number of Democrats in order to pass a disapproval resolution.  And if a disapproval resolution can be passed by both chambers, it is not clear whether enough Democrats in either the Senate or the House would support an effort to override a presidential veto.  Even though a vote is not expected until members return from recess in September, both chambers will start their review of the deal this week.  The Senate Foreign Relations Committee is scheduled to hold a hearing on Thursday, with Secretary of State John Kerry, Secretary of Energy Ernest Moniz, and Secretary of the Treasury Jacob Lew appearing as witnesses.  Prior to the hearing, it is expected that Secretaries Kerry, Moniz, and Lew will hold a closed-door briefing of the nuclear agreement for all Senators.  On Wednesday, the House Financial Services Committee will meet to discuss the Iran agreement and its potential effect on terrorist financing.

Immigration policy will be the focus of other committee activity this week, following the fatal shooting of a San Francisco woman over the Fourth of July weekend by a person with a felonious history who was in the country illegally and who is reported to have been deported from the U.S. five times.  The Senate Judiciary Committee will meet on Tuesday to discuss immigration enforcement and public safety, while the House Judiciary Subcommittee on Immigration and Border Security will hold a Thursday hearing on sanctuary cities, i.e., those communities that have policies in place declining to assist or actively defying federal immigration laws and orders. San Francisco is one such city.

The Senate Armed Services Committee on Tuesday will take up the nomination of General Mark A. Milley, to be Chief Of Staff of the Army.  With the Army about to shrink from 490,000 to 450,000 soldiers, its smallest size since World War Two, Gen. Milley will face a daunting task if he is confirmed, as is expected.

Finally, there is a the prospect that a conference committee will be organized on legislation to reauthorize the Elementary and Secondary Education Act (ESEA), also known as No Child Left Behind.  Both chambers have now passed reauthorization legislation, a significant accomplishment, given that Congress has been unable to generate a rewrite of NCLB since its expiration in 2007.  The conference committee will have many difficult issues to work out, because the bills are very different, with the House having passed with only Republican support a measure that strictly limits the federal role in schools, while the Senate was able to produce a much more bipartisan product.

A full schedule of House and Senate hearings is detailed below:

Monday, July 20, 2015 

Senate Committees 

Milwaukee School Program
Senate Homeland Security and Governmental Affairs
Full Committee Field Hearing
July 20, 6 p.m., Krier Center, St. Marcus Lutheran School, 2215 N. Palmer St., Milwaukee, Wis.

Tuesday, July 21, 2015

House Committees

VA Procurement Issues
House Veterans’ Affairs – Subcommittee on Oversight and Investigations
Subcommittee Hearing
4 p.m., 334 Cannon Bldg.

D.C. Metro Safety Assessment
House Oversight and Government Reform – Subcommittee on Government Operations; House Oversight and Government Reform – Subcommittee on Transportation and Public Assets
Subcommittees Joint Hearing
5 p.m., 2154 Rayburn Bldg.

Senate Committees

Army Chief of Staff Nomination
Senate Armed Services
Full Committee Confirmation Hearing
9:30 a.m., 216 Hart Bldg.

Immigration Enforcement and Public Safety
Senate Judiciary
Full Committee Hearing
10 a.m., 226 Dirksen Bldg.

Labor Department Issues
Senate Health, Education, Labor and Pensions – Subcommittee on Employment and Workplace Safety
Subcommittee Hearing
2:30 p.m., 430 Dirksen Bldg.

U.S. Ambassador Nominations
Senate Foreign Relations
Full Committee Confirmation Hearing
2:30 p.m., 419 Dirksen Bldg.

Wednesday, July 22, 2015 

House Committees

Agriculture Department Oversight
House Agriculture
Full Committee Hearing
10 a.m., 1300 Longworth Bldg.

Federal Reserve Proposals
House Financial Services – Subcommittee on Monetary Policy and Trade
Subcommittee Hearing
10 a.m., 2128 Rayburn Bldg.

Social Cost of Carbon
House Natural Resources
Full Committee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Tax Compliance and Small Businesses
House Small Business
Full Committee Hearing
11 a.m., 2360 Rayburn Bldg.

Brownfields Program
House Transportation and Infrastructure – Subcommittee on Water Resources and Environment
Subcommittee Hearing
10 a.m., 2167 Rayburn Bldg.

Veterans Health Measures
House Veterans’ Affairs – Subcommittee on Health
Subcommittee Markup
10 a.m., 334 Cannon Bldg.

MedPAC Issues
House Ways and Means – Subcommittee on Health
Subcommittee Hearing
10 a.m., B-318 Rayburn Bldg.

Broadband Infrastructure Investment
House Energy and Commerce – Subcommittee on Communications and Technology
Subcommittee Hearing
2:30 p.m., 2322 Rayburn Bldg.

Iran Deal and Terrorism Financing
House Financial Services
Full Committee Hearing
2 p.m., 2128 Rayburn Bldg.

U.S. Commerce in Africa and Middle East
House Foreign Affairs – Subcommittee on the Middle East and North Africa
Subcommittee Hearing
2 p.m., 2172 Rayburn Bldg.

The Crisis in Burundi
House Foreign Affairs – Subcommittee on Africa, Global Health, Global Human Rights and International Organizations
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Land Use Bills
House Natural Resources – Subcommittee on Indian, Insular and Alaska Native Affairs
Subcommittee Hearing
2 p.m., 1334 Longworth Bldg.

Senate Committees

Financial Stability Oversight Council
Senate Banking, Housing and Urban Affairs – Subcommittee on Securities, Insurance and Investment
Subcommittee Hearing
10 a.m., 538 Dirksen Bldg.

Transportation Department Nomination
Senate Commerce, Science and Transportation
Full Committee Confirmation Hearing
10 a.m., 253 Russell Bldg.

Higher Education Reauthorization
Senate Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., 430 Dirksen Bldg.

U.S. Electric Grid Issues
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Judiciary Nominations
Senate Judiciary
Full Committee Confirmation Hearing
10 a.m., 226 Dirksen Bldg.

Tax Compliance Overhaul
Senate Small Business and Entrepreneurship
Full Committee Hearing
10 a.m., 428A Russell Bldg.

Supreme Court Activism
Senate Judiciary – Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts
Subcommittee Hearing
1:30 p.m., 226 Dirksen Bldg.

Indian Gaming Issues
Senate Indian Affairs
Full Committee Oversight Hearing
2:15 p.m., 216 Hart Bldg.

Indian Affairs Measures
Senate Indian Affairs
Full Committee Markup
2:15 p.m., 216 Hart Bldg.

Medicare Provider Enrollment Fraud
Senate Special Aging
Full Committee Hearing
2:15 p.m., 562 Dirksen Bldg.

Thursday, July 23, 2015

House Committees

Obama Administration’s Overtime Proposal
House Education and the Workforce – Subcommittee on Workforce Protections
Subcommittee Hearing
10 a.m., 2175 Rayburn Bldg.

Banking Capital and Liquidity Issues
House Financial Services
Full Committee Hearing
10 a.m., 2128 Rayburn Bldg.

‘Sanctuary Cities’
House Judiciary – Subcommittee on Immigration and Border Security
Subcommittee Hearing
10 a.m., 2141 Rayburn Bldg.

National Parks Outlook
House Natural Resources – Subcommittee on Federal Lands
Subcommittee Oversight Hearing
10 a.m., 1324 Longworth Bldg.

Water Management Bills
House Natural Resources – Subcommittee on Water, Power and Oceans
Subcommittee Hearing
10:30 a.m., 1334 Longworth Bldg.

National Park Service Concessions
House Oversight and Government Reform – Subcommittee on the Interior
Subcommittee Hearing
9 a.m., 2154 Rayburn Bldg.

Ex-Im Bank
House Oversight and Government Reform
Full Committee Hearing
Noon, 2154 Rayburn Bldg.

EPA Renewable Fuel Mandate
House Science, Space and Technology – Subcommittee on Energy; House Science, Space and Technology – Subcommittee on Oversight
Committee Joint Hearing
10 a.m., 2318 Rayburn Bldg.

Ongoing Intelligence Activities
House Select Intelligence – Department of Defense Intelligence and Overhead Architecture Subcommittee
Subcommittee Hearing
9 a.m., HVC-304 Capitol Visitor Center

Small Businesses and App Technology
House Small Business – Subcommittee on Health and Technology
Subcommittee Hearing
10 a.m., 2360 Rayburn Bldg.

IRS Audit Selection Process
House Ways and Means – Subcommittee on Oversight
Subcommittee Hearing
10 a.m., 1100 Longworth Bldg.

U.S.-South China Sea Security
House Foreign Affairs – Subcommittee on Asia and the Pacific
Subcommittee Hearing
2172 Rayburn Bldg.

Terrorism and U.S.-Russia Relations
House Foreign Affairs – Subcommittee on Europe, Eurasia and Emerging Threats
Subcommittee Hearing
2 p.m., 2255 Rayburn Bldg.

Mexico and North American Energy
House Foreign Affairs – Subcommittee on the Western Hemisphere
Subcommittee Hearing
2 p.m., 2200 Rayburn Bldg.

Senate Committees

U.S. Bank Holding Companies
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
9:30 a.m., 538 Dirksen Bldg.

Finance Nominations
Senate Finance
Full Committee Confirmation Hearing
10 a.m., 215 Dirksen Bldg.

Health Information Technology
Senate Health, Education, Labor and Pensions
Full Committee Hearing
10 a.m., 430 Dirksen Bldg.

General Services Administration Nomination
Senate Homeland Security and Governmental Affairs
Full Committee Confirmation Hearing
10 a.m., 342 Dirksen Bldg.

Iran Nuclear Agreement Review
Senate Foreign Relations Committee
Full Committee Hearing
TBD

Friday July 24, 2015

House Committees

Hazardous Waste E-Manifest Law Implementation
House Energy and Commerce – Subcommittee on Environment and the Economy
Subcommittee Hearing
9 a.m., 2322 Rayburn Bldg.

Health Law State Insurance Marketplaces
House Energy and Commerce – Subcommittee on Oversight and Investigations
Subcommittee Hearing
9:15 a.m., 2123 Rayburn Bldg.

DATA Act Implementation
House Oversight and Government Reform – Subcommittee on Information Technology
Subcommittee Hearing
9:30 a.m., 2154 Rayburn Bldg.

Public and Private Sector Cybersecurity
House Science, Space and Technology – Subcommittee on Research and Technology; House Science, Space and Technology – Subcommittee on Oversight
Subcommittees Joint Hearing
9 a.m., 2318 Rayburn Bldg.