The Week Ahead in the European Parliament – September 21, 2018

Summary

Next week will be a political group week and a committee week in the European Parliament. Members of the European Parliament (“MEPs”) will hold meetings with their respective political party to prepare the plenary session, to be held from October 1 to 4, 2018, in Strasbourg. During the plenary week, MEPs are expected to vote on the reform of EU rules on audiovisual media, including online streaming platforms, and on new CO2 emission reduction targets for passenger cars.

Next week, a few interesting discussions will take place in committee.

On Monday, September 24, the Committee on Industry, Research and Energy (“ITRE”) will vote on its legislative opinion on the proposal for a single use plastic Directive. The legislative proposal aims to reduce the amount of plastic marine litter from single use plastic items and fishing gear containing plastic. See the Commission proposal here, the draft opinion here , the amendments tabled to the draft opinion here.

On the same day, the Committee on Agriculture and Rural Development (“AGRI”) will debate on a proposal for a Directive on unfair trading practices in business-to-business relationships in the food supply chain. A number of amendments will be discussed, such as the extension of the scope to all agricultural products, the extension of the “buyer’s” definition to include those operators that buy and sell products on the EU market, and also the inclusion of a definition of “unfair trading practice” and the introduction of a payment term for non-perishable products set at 60 days from the receipt of the invoice. See the Commission proposal here, the draft report here, the amendments tabled to the draft report here and here. Continue Reading

U.S. Releases Final List of Tariffs on $200 Billion in Chinese Imports

On September 17, the Office of the U.S. Trade Representative (USTR) released its final list of approximately $200 billion in Chinese imports subject to an additional ad valorem tariff. The final list, which covers 5,745 product categories, will take effect on September 24, 2018. The tariff rate will initially be set at 10 percent and will increase to 25 percent after January 1, 2019. The announcement of the final tariff list does not address whether the Administration will provide a product-level exclusion process from these tariffs, as it has done for two other rounds of tariffs imposed on Chinese imports earlier this year.

The Administration also announced a product-level exclusion process for the products covered by the tariffs on $16 billion in Chinese imports, which were released in August. Exclusion requests for products covered by these tariffs are due by December 18, 2018. As requests are posted to USTR’s docket, parties will have 14 days to file responses either in support of or opposition to a particular request.

Read the Full Article

 

Congressional Forecast: September

The House and Senate are entering their respective final runs before the November midterm elections, following a two-day break for Rosh Hashanah, the Jewish New Year — even though the possibility of Hurricane Florence entering the Washington, D.C. metropolitan area cut short an already shortened week. The pressing items of business are funding the government and the pending Senate confirmation of Brett Kavanaugh to the United States Supreme Court. But several lower-profile issues remain as well.

The Senate convened briefly on Wednesday, Sept. 12, and confirmed the nomination of Charles Rettig to head the Internal Revenue Service. During the third week of September, the Senate is expected to turn to legislation aimed at combating the nation’s opioid epidemic. That bill, H.R. 6, is expected to clear the Senate with a prenegotiated amendment sponsored by Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health, Education, Labor & Pensions Committee. But it is expected that this opioids legislation will still need some work in a conference with the House before it is ready for final enactment.

The Senate is also expected to take up and pass S.2554, the Patient Right to Know Drug Prices Act, which would prohibit the use of gag clauses in Affordable Care Act plans and employer-sponsored insurance. The reach of this prohibition in the bill might be extended by amendment while it is before the full Senate, to also cover self-insured group health plans.

Much of the near-term attention in Congress in the remaining weeks of this final work period will be focused on both the Kavanaugh nomination, currently proceeding through the Senate Judiciary Committee, and on negotiations in conference over multiple packages of appropriations bills — known as “minibuses” — to fund the government over the next fiscal year. The first minibus conference report (covering military construction, Veterans Affairs, energy and water, and legislative branch appropriations bills that fund the U.S. Army Corps of Engineers and the Capitol complex), has emerged from conference and was passed by the Senate before it adjourned for the week. House action appears likely in the coming days.

Two other minibus packages (Interior, transportation, agriculture and financial services; and defense and labor, Health & Human Services and education, respectively), have proceeded into conferences to work out the differences between the House and Senate versions of each. The first of these two minibuses may prove more difficult to navigate through the bicameral conference, because members of the two bodies differ over a number of controversial riders.

Time is running short on these and other appropriations bills, such as the bill that funds the U.S.Department of Homeland Security, which has been slowed by controversy over President Donald Trump’s demand that the bill’s border security funding be augmented to reflect his plan to build a wall on the southern border. With the midterm election looming, whatever appropriations bills do not get done in the next few weeks will likely end up in a continuing resolution funding those portions of the government, likely to be passed sometime in early December.

Depending partly on the timing for resolution of these appropriations bills, Congress seems likely to attempt to finish work on three other bills: a bill reauthorizing the Federal Aviation Administration; a bill reauthorizing the Water Resources Development Act; and a new farm bill.

In particular, WRDA legislation appears most likely to move ahead. On Sept. 10, Senate Environment and Public Works Committee chairman John Barrasso, R-Wyo., and ranking member Tom Carper, D-Del., House Transportation and Infrastructure Committee chairman Bill Shuster, R-Pa., and ranking member Peter DeFazio, D-Ore., and House Energy and Commerce Committee chairman Greg Walden, R-Ore., and ranking member Frank Pallone, D-N.J., announced that they have come to an agreement on a compromise bill.

While not a conference report since the full Senate has not voted on its version, the WRDA compromise bill seems likely to start in the House, with floor action possible soon. Notably — given the tragedy relating to water quality in Flint, Michigan — the bill would include $4.4 billion for the U.S. Environmental Protection Agency‘s Drinking Water State Revolving Fund program, to improve state and locality drinking water infrastructure.

Meanwhile, the farm bill is being negotiated in a 56-person conference between the House and Senate, which formally kicked off on Sept. 5. Potential approval of the bill could give senators and House members from agriculture-heavy states and districts an important deliverable for voters in a number of key contested November races. But politically difficult issues lie ahead for the bill — such as controversial House provisions that would place restrictions on the Supplemental Nutrition Assistance Program, or food stamps.

The Kavanaugh nomination is expected to clear the Senate Judiciary Committee on a party line vote very soon. The nomination should proceed to the full Senate in late September, or early October at the latest. A few senators from each party remain undecided or at least unannounced. Yet the nomination appears to be on secure footing, with Democrats unable to mount a filibuster of the nomination under the revised interpretation of the Senate’s cloture rule that requires only majority support for shutting off debate. After Kavanaugh is confirmed, it appears likely that the Senate will soon thereafter wind down its work until after the election.

For its part, the House is also reconvening later this week, and in addition to possibly considering the WRDA compromise, Republican leadership is planning to vote on several bills reported by the House Ways & Means Committee, and other lower profile legislation, under suspension of its rules. But much attention will be on the House Ways & Means Committee chairman Kevin Brady’s, R-Tex., intended committee markup of Tax Reform 2.0, which — among other items — would make permanent certain changes to the tax code in the 2017 tax reform law, affecting individual taxpayers.

The House Republican Conference is not united on an approach relating to this legislation, with a range of perspectives from leadership and vulnerable incumbents. So it is unclear when, or if, the bill might reach the House floor. Regardless of whether the bill passes the House, since it would be subject to a 60-vote threshold supermajority in the closely divided Senate, the legislation does not appear to have a path forward.

This article was originally published in Law360.

The Heat: Forum on China-Africa Cooperation wraps up in Beijing

Witney Schneidman, Chair of Covington’s Africa Practice, recently participated in a China Global television show to assess the outcome of the 7th FOCAC meeting in Beijing that was held last week between Chinese leaders and more than 50 African leaders. LINK

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

This Week in the European Parliament – September 14, 2018

Summary

Next week will be a constituency week for Members of the European Parliament (“MEPs”).  MEPs will go back to their home countries or convene in their parliamentary delegations to work on non-EU related matters.

However, this past week, the European Parliament held its plenary session in Strasbourg, and voted on interesting reports.

On Wednesday, MEPs approved the Parliament’s position at first reading on the Commission’s proposals for a Directive on new digital copyright rules.  The Parliament’s position was approved by 438 votes to 226, with 39 abstentions.  The text is intended to strike a balance between the extension of copyright law online and the protection of freedom of expression.  Furthermore, small and micro platforms would be excluded from the future Directive’s scope.  See the Parliament’s position here, and the Commission proposal here.

On Thursday, MEPs also adopted a resolution on a European strategy for plastics in a circular economy.  This follows the Communication on a European strategy for Plastics in a Circular Economy adopted by the European Commission in January 2018.  In its Communication, the Commission introduced initiatives at the EU level to transform the way plastic products are designed, produced, used and recycled.  In its report, the European Parliament calls for a number of additional measures, including a ban on micro-plastics in cosmetics, personal care products, detergents and cleaning products by 2020 and the establishment of a post-2020 policy for the circular economy based on a strong research and innovation pillar.  The Parliament also called for making “circularity first” an overarching principle for non-packaging plastic items, by developing product standards and revising the eco-design legislative framework.  See the adopted resolution here.

On the same day, MEPs approved their report on dual quality products in the EU Single Market.  The objective is to prevent the same branded products from being sold with different characteristics (e.g., lower quality ingredients or less product in the same packaging) depending on the Member States or the regions in which they are placed on the market.  Among others, the report calls on the Commission to amend Annex I of the Unfair Commercial Practices Directive (“UCPD”) to include dual quality as a blacklisted practice under the UCPD.  See the adopted report here.

Also on Thursday, the European Parliament approved a report on the Commission’s Communication on a European One Health Action Plan on Antimicrobial Resistance.  Among its proposals, the European Parliament calls on the European Commission to promote initiatives to encourage the use of single use hand towels in sensitive environments and further study the relation between hand drying and the spread of pathogens.  It also calls on the Commission and EU Member States to develop in cooperation with industry new incentive models that would delink payment from prescribing volumes.  See the adopted report here.

Meetings and Agenda

No official meetings in the European Parliament are planned before September 24, 2018.

Past is Prologue: A New Approach to Cross-Border Application of Dodd-Frank Swaps Provisions

On September 4, 2018, in a speech to the City Guildhall in London, Chairman Giancarlo previewed a new approach to cross-border application of Dodd-Frank swaps provisions, which will be memorialized in a forthcoming white paper.

Chairman Giancarlo began his remarks with a historical overview of cross-border swaps regulation, highlighting post Dodd-Frank reforms. He then summarized the current regulatory regime, emphasizing the substantial progress that has been made in the world’s primary swaps trading jurisdictions to implement commitments made after the 2008 financial crisis at the Pittsburgh G-20 summit.

The Chairman went on to offer a mea culpa and an apologia, stating that the CFTC’s current approach to applying swaps rules to its cross-border activities has resulted in a number of problems. The Mea culpa was offered for the 2013 cross-border guidance which imposed CFTC transaction rules on swaps traded by U.S. persons even in jurisdictions committed to G-20 swaps reforms. Chairman Giancarlo expressed his view that such an approach“alienated many overseas regulatory counterparts and squandered important American leadership and influence in global reform efforts.” The Chairman allowed that CFTC’s “over-expansive assertion of jurisdiction” may have been understandable in 2013 when other G-20 jurisdictions had not yet implemented swaps reforms. However, today, he views the approach as increasingly out of sync with the world’s major swaps trading regimes, which have since adopted comparable swaps reforms. Continue Reading

How Well Do You Know Your Supply Chain? New Policy Developments Affect Defense and Security Contractors

Generating and sustaining the United States’ global economic and military superiority over more than the last half century has depended on a dominant U.S. global economic position and perpetual technological innovation. The United States has increasingly relied on a global industrial supply chain and a relatively open environment for foreign investment in early stage technology development to sustain this dominant position, but in so doing has built risk into the foundation of its competitive advantage. The U.S. Government has growing concerns that these past practices meant to extend the U.S. economic and military advantage are contributing to its erosion. As a result, the Department of Defense (DoD), other Executive agencies, and Congress are taking steps to mitigate risks across the defense industrial and innovation supply chains that provide hardware, software, and services to the U.S. Government. Continue Reading

California Legislature Passes Amendments to Expansive Consumer Privacy Law

Less than three months ago, California enacted the California Consumer Privacy Act of 2018 (“CCPA”). Industry and privacy watch groups alike have scrutinized the law. This summer saw fierce negotiations all in the name of improving the CCPA. Last Friday, on August 31, 2018, the California legislature passed SB 1121 to amend the CCPA.

The CCPA applies to for-profit entities that conduct business in California. It has an expansive definition of personal information, and grants California residents a number of new rights, including rights to request access to and deletion of certain data, and to opt-out of the sale of data. For a more detailed summary of the CCPA, please see our previous blog post.

SB 1121 largely preserves the substance of the CCPA, but it contains the following technical edits:

  • Immediate Implementation With Tolled AG Enforcement. SB 1121 changes the implementation date of the CCPA. Under the original CCPA, implementation was delayed until January 1, 2020. Under SB 1121, the Act takes effect immediately, but the Attorney General may not bring an enforcement action until six months after the publication of the Attorney General’s final implementation regulations or July 1, 2020 — whichever is earlier. This tolled AG enforcement does not affect the timing of private litigation, which is limited to certain data security breach scenarios.
  • Clarified Exemptions for Certain Regulated Activities. SB 1121 clarified exemptions for data already regulated under the Gramm-Leach-Bliley Act (“GLBA”), the Driver’s Privacy Protection Act (“DPPA”), and the Health Insurance Portability and Accountability Act (“HIPAA”). As originally enacted, the CCPA exempted data handled pursuant to the GLBA and the DPPA only if the CCPA conflicted with those laws. Under SB 1121, data handled pursuant to the GLBA and DPPA is exempt from the CCPA — period. SB 1121 clarifies that the CCPA does not apply to a provider of health care or another entity governed by HIPPA. SB 1121 also clarifies that the CCPA does not apply to information collected (1) by an entity governed by HIPPA or (2) as part of a clinical trial.
  • Private Right of Action. SB 1121 limits private rights of action to situations which meet the following two characteristics: (1) there is a data security breach involving unredacted or unencrypted personal information and (2) the breach was caused by the company’s failure to maintain reasonable security measures. SB 1121 notes that there is no private right of action when the company cures the alleged violation within thirty days and provides the consumer an express written statement that the violations have been cured and no further violations of the act shall occur. It also eliminates the requirement that potential plaintiffs notify the Attorney General of their suit. The Attorney General requested that this requirement be deleted in his August 22, 2018 letter.
  • Press Activities and the First Amendment. SB 1121 clarifies that the CCPA’s consumer rights and business obligations do not apply to the extent they infringe on non-commercial activities of the press. The law remains vulnerable to the extent it infringes upon other activities protected under the First Amendment.
  • Local Law Conflicts. SB 1121 adds a clause to prevent confusion created by the enactment of conflicting local laws; that clause takes effect immediately.

The CCPA requires the Attorney General’s office to promulgate implementation regulations, which will further clarify the CCPA’s substantive requirements. In the meantime, SB 1121 awaits the governor’s signature.

Covington AI/IoT Update: EPA and NHTSA Seek Comment on Autonomous and Connected Vehicles

On Friday August 24, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) published a proposed rule in the Federal Register: The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (“Proposed Rule”).  83 Fed. Reg. 42817.

The long-anticipated rulemaking has garnered media attention for its proposed measures to indefinitely freeze fuel economy and greenhouse gas emissions standards, and to strip California’s long-held authority under the Clean Air Act to set its own tailpipe emissions rules.  EPA’s decision to reconsider its own determination that the previous standards were appropriate as set through the year 2025 has been challenged in court by eighteen states, private parties, and environmental NGOs.

But another set of stakeholders may be interested in the rule: autonomous and connected vehicles manufacturers and parts suppliers.  Buried deep within the Proposed Rule is a request for comment from EPA and NHTSA as to how incentives such as eligibility for credits under the rule’s off-cycle program might be deployed to “facilitate increased use of these technologies, including some level of assurance that they will lead to future additional emissions reductions.”  83 Fed. Reg. 43463.  The Proposed Rule acknowledges that connected and autonomous cars have the potential to impact vehicle emissions in the future, “with their aggregate impact being either positive or negative.”  Id.

EPA and NHTSA go into some detail as to how a credit regime for connected and autonomous vehicles might work.  For example, allocating set credit amounts allocated for vehicles capable of Vehicle-to-Vehicle (V2V) or Vehicle-to-Infrastructure (V2I) communications as an incentive to enable future transportation system efficiencies.  Similarly, the Proposed Rule discusses providing credits for vehicle automation, so long as such credits incentivized emissions reductions.  EPA also seeks comment as to whether connected and autonomous vehicles that are placed in ridesharing or “other high mileage applications” should be eligible for credits under the final rule.  Such credits would contemplate the per-mile emission reduction benefits that might accrue across fleets of shared vehicles.

EPA and NHTSA are careful to note that none of these technologies has yet to prove its emissions reduction capability.  The Proposed Rule accordingly asks for comment that illustrates how manufacturers using such connected, autonomous, and ridesharing technologies would demonstrate “real world emissions benefits.”  Many observers have noted that such benefits would accrue with the increased usage of autonomous and connected vehicles so long as those vehicles were low- or zero-emission vehicles.  This is an idea that has been tested to some degree already in the states: in California, for example, the Zero Emission Vehicle (ZEV) Regulation has contemplated that manufacturers placing zero emission vehicles into “Advanced Technology Demonstration Programs” could earn additional ZEV credits.  But as a general matter, this so-called “transportation systems” credit opportunity has not driven a significant portion of the California ZEV credit generation.

Comments are due for this Proposed Rule by October 23, 2018.  Please feel free to contact Jake Levine at jclevine@cov.com for further information.

Smart Power: Investing in Youth Leadership and Development

“So, young people…my message to you is simple, keep believing, keep marching, keep building, keep raising your voice. Every generation has the opportunity to remake the world.”

-President Barack Obama, 2018 Nelson Mandela Annual Lecture, South Africa

Of the many statistics that define Africa’s complexity, this may be the most important one: With 200 million people between ages 15 and 24, Africa has the youngest population in the world. This demographic is expected to double by 2045. The question is whether Africa’s youth population is a “ticking time bomb,” a concern expressed by Zambia’s finance minister, Alexander Chikwanda, or, if the continent’s demography will contribute to sustained economic growth and diversification. Despite fast economic growth from 2000 to 2015, the absolute number of poor has increased in Africa and about 70 percent of young people live below the poverty line.

Engaging Africa’s youth is therefore critical, and has to become a top policy priority for African governments and other stakeholders. It is encouraging that some progress has been made. For example, the African Union’s theme for 2017 was “harnessing demographic dividends through investment in youth.” Aligned with this is recent Africa Growth Initiative research that contends governments need better policies and well-trained civil servants in order to enhance job creation, implement pro-poor policy interventions, and ensure effective public service delivery.

A step in this direction occurred last month in Johannesburg, when 200 young leaders from across Africa gathered for the inaugural meeting of the Obama Foundation Leaders: Africa program. The initiative’s goal is to equip these emerging leaders with the tools and inspiration they need to tackle some of the toughest challenges facing their communities, countries, and the continent. Working with President Obama and others, the young leaders took part in skills workshops, engaged with each other, and participated in a town hall with the president.

The gathering coincided with Mandela Day—a celebration of Nelson Mandela’s life—100 years after his birth. Despite the huge strides made by Mandela and others in Africa, the continent still struggles with corruption, slow-moving bureaucracies, and underperforming civil servants. These constraints have far-reaching effects. As President Obama noted in his remarks for the 2018 Nelson Mandela Annual Lecture: “In fact, it is in part because of the failures of governments and powerful elites to squarely address the shortcomings and contradictions of this international order that we now see much of the world threatening to return to an older, a more dangerous, a more brutal way of doing business.”

Despite these shortcomings, President Obama’s message was one of hope based on the belief that the next generation of leaders will utilize technology, innovation, and entrepreneurship to improve governance and opportunities. Indeed, a recent study by the African Union and the OECD found that government action is key to overcoming challenges related to growth, jobs, and inequalities. Elemental to this is the need for government institutions to deliver services efficiently and to create a regulatory environment that fosters development, economic growth, and job creation for today’s youth. Young leaders need to become change agents in the public and private sectors in order to ensure that the continent’s youth population contributes fully to the region’s progress. I have personally observed the positive impact of youth leadership initiatives in Africa, as a member of the Global Advisory Board of IREX, a nonprofit organization that manages YALI’s Mandela Washington Fellows program, and a board member of Emerging Public Leaders.

The Young African Leaders Initiative (YALI), created by the Obama administration and continued by the Trump administration, seeks to achieve this goal. In reality, YALI is one of the most innovative and impactful initiatives implemented by the U.S. in Africa; the fifth class of YALI’s Mandela Washington Fellows recently completed six weeks of leadership training in the U.S. and a summit in Washington with senior administration and congressional officials. Since YALI’s first class of fellows arrived in the U.S. in 2014, nearly 4,000 young Africans have participated in the program. Not only are the Fellows transformative leaders in the areas of public service, business and nonprofits, but more than 77 percent report sustained relationships with other fellows across the 49 countries of sub-Saharan Africa from which they are selected.

Another innovative program, Emerging Public Leaders (EPL), is a public service leadership organization providing high performing African youth with the tools and experiences necessary to become future public leaders and change agents. Through its highly selective Public Service Fellowship, EPL recruits and places talented university graduates into critical civil service positions for two years. Much like the U.S. government’s Presidential Management Fellows program, EPL provides future government leaders with the skills to think critically, act ethically, and ultimately drive good governance in civil service institutions.

Over the past decade, EPL has recruited and supported over 160 fellows through its flagship program in Liberia, the President’s Young Professionals Program, and its recently launched program, Emerging Public Leaders of Ghana. EPL’s longer-term goal is to expand its model beyond Liberia and Ghana to form a pan-African network of 500 public sector leaders by 2022.

Africa’s future is its youth. With nearly 60 percent of Africa’s 1.2 billion population under the age of 35, today’s youth face an unprecedented challenge to create and sustain meaningful change in their communities, countries, and across the globe. Empowering and investing in tomorrow’s leaders is a powerful way not only to honor the legacy of Nelson Mandela, but to work for a future that is secure and equitable.

Dr. Schneidman is a member of the Global Advisory Board of IREX that manages YALI’s Mandela Washington Fellows program and a board member of Emerging Public Leaders. This piece was cross-posted on Brookings’ Africa in Focus Blog.  And can also be found on CovAfrica, the firm’s blog on legal, regulatory, political and economic developments in Africa.

 

LexBlog