Forced Labor Legal Developments in Europe: EU Council and Parliament Negotiate Final Text for Proposed Regulation

While many have focused in recent months on the US enforcement of the forced labor import ban (19 U.S.C. 1307) and the Uyghur Forced Labor Prevention Act (UFLPA) (Public Law No. 117-78), the EU is working on its own set of regulations prohibiting products made with forced labor from entering the EU market. A proposal for a regulation of general scope, presented in September 2022, is now reaching the last legislative phase. However, with limited time left before the EU elections, there is some risk of negotiations delaying until after fall 2024.

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US ITC to Investigate Global Rice Trade

In a February 5, 2024 letter to the US International Trade Commission (ITC), US House of Representatives Ways & Means Committee Chair Jason Smith (Republican-Missouri) requested that the ITC conduct a Section 332 investigation into the global rice market. The ITC will institute the investigation in the coming weeks, and it could be the first step toward future trade actions impacting trade in rice and related products.

The governments of principal rice producing and consuming nations, US rice producers, processors and exporters, corporations that are significant consumers of domestically produced or imported rice, and foreign rice producer organizations and governments would all be well advised to carefully monitor this investigation and engage in the process so they can help inform the ITC’s final report. 

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The End of “Chevron” or Its Rebirth?

Fishermen in the small town of Cape May, New Jersey, are at the epicenter of a legal challenge that could reshape the landscape of federal agency authority. The fishermen are challenging the entrenched “Chevron” doctrine, which for years has afforded deference to government agencies with respect to reasonable interpretation of ambiguous statutes. The US Supreme Court’s decision could change how industry engages Congress and fundamentally alter how businesses navigate an array of regulations spanning environmental, labor and other domains.

Read our analysis here.

President Biden Prepares Executive Order to Prohibit Foreign Adversaries’ Access to US Data

According to reports originally from Bloomberg News, President Joe Biden is preparing to issue an executive order (EO) aimed at prohibiting US adversaries from accessing US personal data. While the draft is subject to change, the draft EO reportedly targets “highly sensitive” data, including genetic and location information, and would bar foreign adversaries from obtaining this data through legal means such as intermediaries, data brokers, third-party vendors, employment agreements, or investment agreements. Further, the EO would reportedly require that entities owned, controlled, or operated by countries of concern turn over data to the US government when requested. Significantly, the draft EO would restrict US entities and individuals from conducting data transactions that would provide adversarial countries with government-related or sensitive personal data, in addition to data that could jeopardize US national security. 

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Webinar: The New Foreign Extortion Prevention Act – What It Means for US Companies

Please join us on Tuesday, January 30 for a discussion about “the most consequential anti-foreign-bribery law passed in almost 50 years”: the Foreign Extortion Prevention Act (FEPA).

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Charting the Course: Congress Progresses Towards Meaningful Action on AI

This year, Congress is steadily progressing towards enacting meaningful legislation on artificial intelligence (AI) for the first time. At the end of 2023, Senate Majority Leader Chuck Schumer (D-NY) and his “Gang of Four” (Senators Todd Young (R-IN), Martin Heinrich (D-NM), and Mike Rounds (R-SD)) concluded their AI Insight Forums, a series of sessions where lawmakers discussed AI technology with industry leaders. Leader Schumer announced that senators are now beginning to work on AI legislation. He has reportedly empowered various Senate committee chairs to introduce legislation on topics within their jurisdiction related to AI and to begin the process of shaping those bills through their respective committees. For instance, it was reported by FedScoop that Senate Committee on Commerce, Science, and Transportation Chair Maria Cantwell (D-WA) is preparing to introduce a series of bills addressing AI issues, including deepfakes, jobs and training, algorithmic bias, digital privacy, national security, and innovation and competitiveness in the coming weeks and months. The initial focus of legislation may revolve around the clearest dangers posed by AI, including deepfakes and national security. Additionally, there is a growing interest in Congress regarding AI’s impact on elections, considering 2024 is an election year.

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Winter Work: Congressional Action Items During This Election Year

A new year means a new congressional session – yet our lawmakers are carrying over policy debates that did not conclude in consensus prior to their holiday recess. The House of Representatives and Senate will consider critical government funding legislation, deadline-driven authorizing bills, and other potential reforms, but agreement will need to be found between members of the same party, between Democrats and Republicans, between the two chambers, and between Congress and the White House. With the shadow of the ballot box growing darker by the day, we take a high-level look at what our legislative branch may undertake prior to election day in November.

Read full insight here.

Sustainability First, Antitrust Second? – The EU Commission’s New Rules on Agriculture Cooperations

Sustainability considerations, i.e., ensuring animal welfare and tackling food waste, climate change, pollution, exploitation of natural resources and human rights violations, have taken a stake in the Commission’s rule book. Not only is the Commission increasingly integrating these considerations into its merger case practice[1], e.g., when assessing the market definition and the competitive landscape. The Commission has also dedicated legislative efforts.

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Biden Administration Finalizes Greenhouse Gas Target Rule that is Likely to Draw Challenges

The Federal Highway Administration (FHWA) recently released a prepublication version of its final rule establishing a greenhouse gas (GHG) emissions measure.  The final rule establishes a method for measurement of GHG emissions associated with transportation and requires state departments of transportation (State DOTs) and metropolitan planning organizations (MPOs) that have National Highway System (NHS) routes within their jurisdiction to establish targets for reducing GHG emissions from on-road sources and to report on their efforts to meet those targets. The rule will take effect thirty days after the date of its publication in the Federal Register. State DOTs are required to establish targets and report those targets by February 1, 2024. Subsequent targets would be established and reported by no later than October 1, 2026.  

In the preamble to the final rule, FHWA spent considerable effort explaining how the rule: (1) is not a mandate – because it does not impose penalties for missing targets, (2) is not unfunded – because the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) make billions of dollars in funding available to address carbon pollution reduction, and (3) is authorized under current law – despite no specific authorization in the IIJA.

Vehicle and engine emissions have long been directly regulated by the Environmental Protection Agency and the California Air Resources Board; this rule would require infrastructure decisionmakers to consider ways to reduce CO2 emissions of road users when programming project funds.

The rule is the latest about-face in a series of rulemakings on this subject during the Obama, Trump, and Biden Administrations, and it is likely to face challenges from Members of Congress and perhaps some western states.  

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U.S.-China Relations: A Warming Trend Sparks Opportunities for Chinese Business

In recent years, the U.S.-China bilateral relationship has hit historic lows, marked by notable events like the Chinese spy balloon incident in February and former Speaker of the House Nancy Pelosi’s visit to Taiwan in 2021. However, there is reason for optimism as we have witnessed a significant shift in dynamics over the past few months that may present opportunities for some Chinese businesses that have been negatively impacted by the geopolitical tensions.

High-level diplomatic engagements occurring throughout the summer and into the fall have contributed to a notable thawing of tensions between the United States and China. As we approach the Asia-Pacific Economic Cooperation (APEC) Summit, scheduled for next week, there is a unique opportunity for the Biden Administration to build upon this positive momentum. Administration officials know this very well, as they have acknowledged that the meeting between Chinese President Xi Jinping and President Biden at APEC presents a crucial chance to re-establish a foundation of stability in the relationship.

In our view, this stability is particularly important as both major political parties in the United States are expected to heavily incorporate China and U.S.-China policy into their rhetoric during the upcoming presidential election cycle. With this in mind, Chinese business involved in disputes with the U.S. federal government that arise from policy differences between China and the U.S., especially in areas of trade, investment, and technology, should be vigilant. This period may offer a window of opportunity for Chinese companies caught in the middle of such differences to resolve such disputes to mutual satisfaction, provided that the current atmosphere of cooperation endures.

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Carbon Border Adjustment Mechanism (CBAM) Transitional Phase Now in Effect

International freight or shipping service for online shopping or ecommerce concept : Paper boxes or carton put in circle around a clear crystal globe with world map on a computer notebook keyboard.

The European Commission has adopted the implementing regulation establishing the rules for the CBAM during its transitional phase, spanning from October 1, 2023, to the end of December 2025. The implementing regulation delineates the reporting obligations imposed on EU importers of CBAM goods and the methodology for calculating embedded emissions in their production. This insight covers the regulation in full and looks at the concerns for the industry.

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European Union Sustainability Outlook

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With the European Commission driving forward “Fit for 55” – its plan for a green transition – we have selected relevant developments in EU sustainability law and policy from the past few months.

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PFAS Restriction Proposal

To curb an unacceptable risk to human health or the environment, Germany, Denmark, the Netherlands, Sweden and Norway jointly proposed a restriction proposal to ban over 10,000 Per- and Polyfluoroalkyl Substances (PFAS) commonly designated as “forever chemicals” under Article 68 of the REACH regulation.

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U.S. Executive Branch Update – October 5, 2023

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This report provides a snapshot of the U.S. Executive Branch priorities via daily schedules and the prior day’s press releases.

POTUS’ Schedule*

12:00 p.m. EDT – THE PRESIDENT receives a briefing on Ukraine from members of his national security team | Oval Office 

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Key Areas of Focus in U.S.-China Relations and Their Impact on Businesses in the 118th Congress

So far in the 118th Congress, U.S.-China relations have been a major focus for Democrats and Republicans alike. House Republicans, the opposition party, tried to challenge the Biden Administration’s approach to China, which involves competing with China, cooperating when possible, and confronting them when necessary.[1]

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