The Week Ahead in the European Parliament – December 14, 2018


This week, the last plenary session of the year took place before the European Parliament’s Christmas break.

The next Week Ahead in the European Parliament will therefore be sent to you on January 7, 2019.

On Wednesday, December 12, the European Parliament approved the EU’s budget for 2019 by 451 votes to 142, with 78 abstentions.  The budget will provide additional funds to, among others, research, climate protection, and the fight against youth unemployment.  The adopted text can be found here.

On the same day, Members of the European Parliament (“MEPs”) approved the final report, entitled “Findings and recommendations” of the Special Committee on Terrorism (“TERR”), detailing how best to combat terror in the EU.  The report calls for increased cooperation and information-sharing between Member States when the terrorist threat level rises.  The adopted text can be found here.

Also on Wednesday, MEPs agreed the European Parliament’s position at first reading on the proposal for a Regulation complementing EU type-approval legislation with regard to the withdrawal of the United Kingdom from the Union (Brexit preparedness).  The Regulation calls for business continuity and compliance with EU type-approval legislation for manufacturers of vehicles and of non-road mobile machinery.  The adopted text can be found here and the proposal for a Regulation here.

Meetings and Agenda

  • No meetings of note in the European Parliament before January 7, 2019.


The Week Ahead in the European Parliament – December 7, 2018


Next week, there will be a plenary sitting of the European Parliament in Strasbourg, France. This will be the final plenary session of the year. Several significant debates, votes and committee meetings will take place.

On Tuesday, MEPs will debate the Future of Europe together with Cyprus’ President, Nicos Anastasiades, and European Commission President Jean-Claude Juncker.  This is the fourteenth discussion in a series between MEPs and EU leaders on the future of the EU.

On the same day, MEPs will discuss their priorities ahead of the European Council, scheduled for December 13-14, 2018. Their discussions will include the EU’s single market, migration, the Eurogroup, and the EU’s long-term budget.

On Wednesday, the plenary session of the European Parliament is expected to vote in favor of the EU’s budget for 2019, which will provide additional funds to, among others, research, the protection of the climate, or fighting youth unemployment.

On the same day, one day after the expected vote on the Brexit agreement in the UK House of Commons, MEPs will meet with Michel Barnier to discuss the result of the vote and its consequences.

Also on Wednesday, the plenary session of the European Parliament will vote on the final report, entitled “Findings and recommendations” of the Special Committee on Terrorism (“TERR”), detailing how best to combat terror in the EU. The report calls for increased cooperation andinformation-sharing between Member States when the terrorist threat level rises. Read the report here. Continue Reading

Reprieve in U.S.-China Trade Tensions: U.S. tariffs on $200 billion in Chinese imports to stay at 10 percent for 90 days; China to purchase U.S. goods

On December 1, during a working dinner meeting in Buenos Aires following the G20 Summit, U.S. President Donald J. Trump and Chinese President Xi Jinping agreed to temporarily ease trade tensions as both sides continue negotiating over longer-term solutions to U.S. concerns about bilateral economic relations.

According to a White House press release, for a 90-day period, the U.S. will maintain the 10 percent tariffs on its list of $200 billion in Chinese imports, postponing an anticipated January 1, 2019, increase in duty levels. In September, the Trump Administration had imposed the 10 percent duties on imports from a wide range of sectors and announced that the tariffs would increase to 25 percent on January 1. The latest Trump-Xi agreement does not reduce or eliminate the current 10 percent duty, and the White House press release states that the increase to 25 percent “will” take place absent an agreement within the 90-day period. Nor does the latest announcement affect the 25 percent duties on separate lists of Chinese imports covering $34 billion and $16 billion in Chinese imports, respectively.

All three sets of tariffs have been imposed pursuant to the U.S. Administration’s determination in March under Section 301 of the Trade Act of 1974 (“Section 301”) that China’s technology transfer and intellectual property (“IP”) policies are harming U.S. companies. Notably, according to the White House, the negotiations that will take place in the coming 90 days will be broader in scope than IP policies, covering “forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.”  Chinese official statements to date have not referenced the 90-day deadline or the specific issues cited by the White House, instead emphasizing that the talks would be aimed at negotiating a removal of each side’s additional tariffs and suggesting that “reasonable U.S. concerns” could be gradually resolved as China undertakes a new round of economic reforms.

China agreed to purchase a “very substantial” amount of U.S. products across the agricultural, energy, and industrial sectors, with the agricultural purchases commencing “immediately.” In subsequent remarks, President Trump stated that China “will be getting rid of tariffs,” possibly referencing removal of some of China’s retaliatory tariffs to enable increased purchases of U.S. products. Additionally, in what the White House termed a “humanitarian gesture” in aid of the U.S. battle against opioid addiction, President Xi agreed to designate Fentanyl as a controlled substance, subjecting those exporting the drug to the U.S. to the “maximum penalty” under Chinese law.

The next 90 days could provide a welcome opportunity to address longstanding bilateral trade issues. However, resolution of the structural issues cited by the White House would be extremely challenging in such a short timeframe, which may introduce greater short-term uncertainty into the environment. As such, companies with interests in U.S.-China trade relations should take appropriate steps to try to shape outcomes of these negotiations and monitor developments affecting supply and market access. Meanwhile, affected companies should also consider submitting tariff exclusion requests for products on the $16 billion list, which are due by December 18, 2018.

House Moves to Get “SMART” on the IoT Industry   

Congress is working to better understand the growing Internet of Things (“IoT”) industry—and soon may be asking industry stakeholders for input.  On Wednesday, November 28, the U.S. House of Representatives unanimously passed legislation designed to provide Congress with greater insights into the inner workings of the IoT industry and to promote collaboration between IoT industry participants and the federal government.

The bill (H.R. 6032 (115)), known as the State of Modern Application, Research and Trends of IoT Act, or the “SMART IoT” Act, directs the U.S. Department of Commerce to conduct a study on the state of the “internet-connected device industry” in the United States.  Among other items, the bill requires the Commerce Department to undertake a survey of the IoT industry, and specifically calls on the Department to conduct outreach to IoT industry participants.  The results of the study would be compiled into a report to Congress that includes recommendations for growing the U.S. economy “through the secure advancement of internet-connected devices.”

The lead co-sponsors of the bipartisan bill—Representative Bob Latta (R-OH), Chairman of the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection, and Representative Peter Welch (D-VT)—launched an IoT Working Group in 2016 to focus on the policy implications of IoT.  Now, House lawmakers are moving to obtain a better understanding of how federal policy towards IoT can encourage innovation and help avoid potential obstacles to its implementation.  Speaking in support of the bill, Rep. Latta emphasized the enormous potential economic impact of IoT applications—estimated at $11.1 trillion worldwide by the year 2025, according to one study—and noted that Congress needs additional information on “the landscape for federal, public-private, and self-regulatory efforts” in the IoT space in order to develop appropriate policy in the IoT industry.

Members of the wireless communications industry praised the House’s swift action on the SMART IoT Act, with CTIA, a major trade association representing the industry, applauding the bill for “leverag[ing] industry efforts to develop innovative, secure IoT applications and ensur[ing] continued U.S. leadership in IoT development.”

The SMART IoT Act now moves for consideration in the Senate.  In light of the bill’s unanimous support in the House, the Senate may use fast track procedures to pass the bill and send it to the President’s desk, where it likely would be signed into law.

Congressional Forecast: December

The U.S. House and Senate have convened for a lame duck session of Congress, during which they must compromise on legislation that funds the government or face a shutdown. They may also endeavor to move additional legislation and continue to confirm Trump administration nominees before the end of the 115th Congress later this month.

The most important order of business is appropriations. Currently, the government is funded through Dec. 7. After that, absent agreement, the government will shut down. Before the midterm elections, Congress completed and sent to the president’s desk about half of the appropriations bills for fiscal year 2019. Now, in the lame duck session, Congress appears to be just about done with the other half, except for the bill that funds the U.S. Department of Homeland Security.

That bill has gotten hung up on President Donald Trump’s demands to fund a southern border wall. It is unclear if those supporting a wall and those opposed to one would be willing to shut down the government over this issue, or whether something can be worked out which allows Trump to show progress on a border wall, a critical campaign promise, and perhaps in exchange makes immigration-related concessions to his opponents.

One possible way forward would be a short-term continuing resolution that keeps the government functioning for a few days after Dec. 7, and gives negotiators some valuable extra time to finish off a compromise. Should the parties get stuck at an impasse, they might choose instead to pass a continuing resolution that lasts well into the new year.

While appropriators work on the omnibus, Senate Majority Leader Mitch McConnell, R-Ky., is taking advantage of the time in session to continue bringing up Trump administration nominations, both for executive branch positions and those that fill vacancies in the federal judiciary, including for posts at the U.S. Department of Commerce, the U.S. Department of Agriculture and the Consumer Financial Protection Bureau. Senate Democrats, in the minority and without the ability to filibuster the nominations, have little leverage in the process.

One of the judicial nominations — that of Thomas Farr to serve on the federal district court for the Eastern District of North Carolina — is especially controversial, and the Senate appears unlikely to approve it. Farr’s record on civil rights issues has been called into question. After clearing a cloture hurdle in the Senate 51-50, with Vice President Pence casting the tiebreaking vote, Sen. Tim Scott, R-S.C., indicated he would not support final confirmation, apparently dooming the nomination.

Key negotiators from the agriculture committees of both houses have struck a deal that would reauthorize farm programs. All four negotiators — Sen. Pat Roberts, R-Kan., Sen. Debbie Stabenow, D-Mich., Rep. Colin Peterson, D-Minn., and House Agriculture Committee Chairman Michael Conaway, R-Tex. — appear to have signed off on a compromise conference report, after Conaway joined the others in approving a package without certain House Republican priorities. A full 56 members of Congress served on the conference to resolve differences between the two bodies.

Some House Republicans had been seeking more concessions. In particular, one sticking point that had held the bill up for months was a proposed work requirement provision for the Supplemental Nutrition Assistance Program, which provides recipients with food stamps. Another sticking point that emerged more recently was the Trump administration’s insistence on certain Republican-included forestry provisions relevant to the California fires. Those provisions are in the House version of the bill, but not in the Senate version. It is unclear whether the administration is satisfied with the final conference report.

Both house have lately turned their attention to the bloody conflict between Yemen and Saudi Arabia. Secretary of State Mike Pompeo and Secretary of Defense James Mattis briefed the Senate on the matter on Wednesday, Nov. 28. Legislative action on the Yemen issue is possible in both bodies, with the Senate likely to consider a War Powers Act resolution introduced by Sen. Bernard Sanders, I-Vt.

Senators wishing to fortify the work of Special Counsel Robert Mueller to investigate Trump campaign activities around the 2016 presidential election have been trying to bring legislation to the Senate floor. That bill, S.B. 2644, The Special Counsel Independence and Integrity Act, does have bipartisan support, but Republican leadership has prevented the bill from being considered.

The tax writing committees have been working on legislation that would extend certain tax provisions affecting energy and other sectors, and providing for disaster relief. House negotiators introduced tax legislation, and are planning to bring it to the House floor in short order, where it is expected to pass. Early indications are that Senate negotiators were not initially read into some of the provisions in the bill, and the legislation does not have a clear path forward in the Senate. That said, tax extender legislation historically has fared well in lame duck sessions of Congress. The prospects for something passing in this lame duck session still appear to be good.

Two special committees established by Congress earlier this year, the Joint Select Committee on Solvency of Multiemployer Pension Plans and the Joint Select Committee on Budget and Appropriations Process Reform, were directed to make recommendations to the full Congress by Nov. 30, and the latter has been marking up a legislative framework. The pensions panel’s work overlaps with work on a retirement security package entitled the Retirement Enhancement and Savings Act of 2018, S.B. 2526, that passed the Senate Finance Committee unanimously in March of this year.

A number of other pieces of legislation could move in the lame duck, including an intelligence reauthorization bill, criminal justice reform, a bill reauthorizing the Violence Against Women Act, a bill relating to the Land and Water Conservation Fund and a bill relating to Medicare Part D payments. It appears likely that Congress will adjourn for the holidays as soon as it resolves how to fund the government into the new year. Swearing in for the 116th Congress will take place on Jan. 3, 2019.


This article also was published in Law360.

The Week Ahead in the European Parliament – November 30, 2018

Friday, November 30, 2018


Next week will be a committee and political group week in the European Parliament.

MEPs will spend a good portion of their week with their political groups, where they will prepare for the plenary session in Strasbourg, scheduled for December 10-13, 2018. They will discuss, among other topics, the EU-Japan trade agreement, the digital services tax, the recommendations of the Special Committee on Terrorism or protecting workers from exposure to carcinogens.

On Monday, the Committee on Civil Liberties, Justice and Home Affairs (“LIBE”) will vote on two proposals aimed at fighting terrorism and organised crime. The first concerns strengthening the ID cards and residence documents of EU citizens. The second concerns rules on the use of financial and information for the prevention, detection, investigation or prosecution of certain criminal offences.

On Thursday, MEPs from the Committee on the Internal Market and Consumer Protection (“IMCO”) will vote on a report by Christel Schaldemose MEP, concerning a proposal for a Regulation on promoting fairness and transparency for business users of online intermediation services (the “P2B” Regulation). Among other changes, the Parliament’s proposed amendments would extend the scope of the Regulation to cover operating systems as well as platforms. See the draft report here. Continue Reading

The Week Ahead in the European Parliament – November 23, 2018


Next week will be a mini-plenary and a committee week in the European Parliament.

On Tuesday, the Parliament’s Committee on Environment, Public Health and Food Safety (“ENVI”) will vote on its report on the European Commission’s Proposal for a Regulation on Transparency and Sustainability of the EU Risk Assessment in the Food Chain.  The proposed Regulation seeks to improve public access to the industry studies used by the European Food Safety Authority (“EFSA”) to make its risk assessment of substances used in food.  The objective is to enhance trust in the EU’s scientific risk assessment in the food chain.  The proposed Regulation also allows the European Commission and Member States’ authorities to request clarification and additional studies where scientific evidence upon which EFSA relies to make its risk assessment needs to be verified.  See the Proposal here, the draft parliamentary report here, and the amendments tabled to the draft report here and here.

On the same day, the European Parliament will organize a “Conference on the Impact of EU Research and Innovation on Your Daily Life.”  The conference is open to everyone and will gather researchers, citizens and public officials.  The objective of the conference is to reflect on past and current achievements in the field of research and innovation and to discuss potential upcoming challenges.  Panels will be organized on various topics, including health and wellbeing, sustainable environment, and innovation on the market.  See the program of the conference here.

On Wednesday, Members of the European Parliament (“MEPs”) will debate with European Commissioner for Climate Action, Miguel Arias Cañete, on the new EU strategy for a long-term reduction of greenhouse gas emissions with a view to meeting the targets set in the Paris Agreement.

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The Week Ahead in the European Parliament – November 19, 2018


This past week, the European Parliament held a plenary session in Strasbourg.

On Tuesday, November 13, Members of the European Parliament (“MEPs”) approved the report on the proposal for a Directive on the promotion of the Use of Energy from Renewable Resources prepared by the Parliament’s Committee on Industry, Research and Energy (“ITRE”).  The Proposal sets new ambitious binding targets for renewables (32%) and energy efficiency (32.5%) by 2030.  It also aims to improve the design and stability of support schemes for renewables, the sustainability of the use of bioenergy, and to increase the level of ambition for the transport and heating/cooling sectors.  The Recast Directive will repeal the existing Directive on Renewable Energy Sources (“RES”).  See the adopted parliamentary report here.

On Wednesday, November 14, MEPs approved the report, prepared by ITRE, on the European Electronic Communications Code.  The Code is part of the Commission’s Digital Single Market (“DSM”) Strategy and contains a range of safeguards aimed at EU-level harmonization for 5G and spectrum management, high-speed broadband technology, and seeks to level the regulatory playing field for “Over the Top” (“OTT”) services with that of traditional telecoms services.  See the adopted parliamentary report here.

Next week will be a committee week in the European Parliament.  A few interesting discussions will take place in committee.

On Tuesday, November 20, the Parliament’s Committee on Legal Affairs (“JURI”) will vote on its draft report on the Proposal for a Directive on Protection of Persons Reporting on Breaches of Union Law (whistleblowers).  Among other things, the Proposal lays down common standards for protection at the EU level, covering a wide range of EU law breaches in different sectors (including, public procurement, financial services and food) and wide-ranging activities, such as competition law, product safety and data protection.  See the draft report here, the amendments tabled to the draft report here and here, and the Proposal here.

On the same day, the Committee on Environment, Public Health and Food Safety (“ENVI”) will vote on its report on the Proposal for a Regulation establishing the LIFE program 2021-2027.  The LIFE program is the only EU funding initiative entirely dedicated to environmental and climate objectives.  The new program for 2021-2027 would support projects in the areas of nature and biodiversity, circular economy and quality of life, clean energy transition, and climate change mitigation and adaptation.  See ENVI’s draft report on the Proposal here, and the Proposal here.

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What is the Prognosis for Health Care Issues in the Next Congress?

Joan Kutcher and Gary Heimberg delivered remarks during Covington’s post-election conference call with clients on November 8, 2018 on health care and drug pricing.  The health care segment follows:

 The Affordable Care Act has been an issue in every election since it passed in 2010.  This election was the first time the Democrats could fully embrace the law and its patient protections. The issue of pre-existing conditions, for instance, was in the forefront of many Democratic attack ads.  After the repeal and replace debate and the ACA-related executive orders, Republicans were on the defensive.

And, with the success of state ballot initiatives in Idaho, Utah and Nebraska and the election of  Democratic Governors in Maine, Wisconsin and Kansas, at least 6 additional states may expand their Medicaid programs — another feature of ACA.  With such an increase in the Medicaid eligible population, we may see proposals to allow states to manage costs that impact the drug industry (with more flexibility in state drug formularies) and the managed care industry; and proposals affecting Disproportionate Share Hospital payments to hospitals.

With that backdrop, we would not expect a replay of the repeal and replace debate in the next Congress. As recently as the day after the elections, Speaker McConnell backed away from his previous statements about it.

Rather, the House Democrats, especially the Energy and Commerce Committee under Frank Pallone, are likely to pursue legislation to shore up the insurance exchanges and to challenge recent Administrative actions authorizing the sale of short-term insurance plans and association health plans, which are considered by Democrats to undermine ACA because they can offer fewer benefits and lower cost.  In this area, House actions could take the form of both oversight hearings as well as legislative proposals.

While most of this action will occur only in the House, Senator Alexander, Chair of the HELP Committee may be interested in resurrecting his market stabilization legislation. If so, it is possible that such a measure could move on a bipartisan basis in the next Congress. (that is, the Democrats in the House and some Republicans and Democrats in the Senate.)

We do not expect gridlock on all health care issues. Which is good or bad news depending on your agenda.  In past congresses, major legislation was enacted on a bipartisan basis, like the 21st Century Cures Act, drug and device user fees, and opioid funding. Similarly, we anticipate some action on a number of matters, including 340B reform, diagnostic reform including devices and LDTs, more funding to fight the opioid epidemic, and possibly orphan drug policy reform.  Even if such bills move only in the House, experience demonstrates that they could form the basis for debate or enactment in the future.

Finally, now that the Congress is split, the Republicans may return their focus to the size of the deficit and the need for entitlement reform, especially in Medicare and Medicaid.  With that shift in focus, we should expect consideration of a number of proposals affecting the biopharma industry.

Congressional Investigations After the Midterm Elections

Brian Smith delivered the following remarks during Covington’s post-election conference call with clients on November 8, 2018.

“Restoring the Constitution’s checks and balances to the Trump administration.”  That’s what Democratic leader Nancy Pelosi promised in her speech after the elections.

Congressional oversight and investigations thrive in divided government, and Democratic leaders are already promising a new wave of oversight.

While the press and pundits are mostly focused on the likely political investigations – access to the President’s tax returns or investigations of the Trump Organization’s business activities – the House’s investigative agenda is much broader, and it has direct implications for many of our clients.

For example, when we last had a Democratic House and a Republican President, in 2007 and 2008, Congress conducted large investigations of drug companies’ sales and marketing practices, technology companies’ sharing of customer data, and the financial industry’s corporate practices.  A decade later, these three sectors – pharmaceutical, financial services, and technology – remain prime targets for congressional scrutiny, along with energy, government contractors, and most other highly regulated industries.

Moreover, a lot has changed in the last decade to increase the congressional investigations risks.

First, more committees now possess dedicated and experienced oversight staff than ever before, and several committees have dedicated oversight and investigations subcommittees.  We expect oversight activities from all the major committees next year.

Second, in recent years, several committees have modified their rules to give the chairmen unilateral authority to issue subpoenas – a practice that we expect to continue next year.  Even though many investigations do not result in subpoenas, the potent threat of a subpoena – issued without committee vote or sometimes even notice – makes it much harder for companies to resist congressional demands.

Third, congressional investigations, which always ebb and flow depending on the political environment, have become much more consistent and a mainstay of today’s legislative process.

That trend has been driven, in part, by legislative gridlock, as Members turn to oversight and investigations as a way to affect policy, and private sector practices, that they cannot reach through legislation.  With the Senate remaining in Republican control, House Members will have a greater incentive to pursue policy goals through investigations.

In predicting next year’s investigations, history is often a good guide.

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