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Biden Administration Imposes Regulatory Freeze Pending Review

Posted January 25, 2021

In one of his first executive actions since taking office President Joe Biden last week directed all federal government departments and agencies to institute a “regulatory freeze” on new and pending rules recently issued by the outgoing Trump administration.
U.S. Capitol Building Covered by Ice Crystals

White House Chief of Staff Ron Klain in a memorandum issued January 20, called on the heads of executive departments and agencies to not propose or issue any rules “until a department or agency head appointed or designated by the president” has had a chance to review and approve it.


Scope of the Freeze

For rules published in the Federal Register but which have not taken effect, agency heads were directed to “consider postponing the rule’s effective dates for 60 days.”

“For rules postponed in this manner, during the 60-day period, where appropriate and consistent with applicable law,” Klain said, “consider opening a 30-day comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by those rules, and consider pending petitions for reconsideration involving such rules.”

Those rules can be further delayed beyond 60 days if they “raise substantial questions of fact, law, or policy,” the memo says. In those cases, “Agencies should notify the [Office of Management and Budget] Director and take further appropriate action in consultation with the OMB Director.”

The memo also calls on agencies to immediately withdraw any last-minute rules that have been sent to the Office of the Federal Register but have not yet been published in the Federal Register and postpones the implementation of rules that have been published but have not yet taken effect for 60 days, “For the purpose of reviewing any questions of fact, law, and policy the rules may raise.” The memo leaves the door open for extending the 60-day period and encourages agencies to open a 30-day comment period for any postponed rules.

Rules subject to statutory or judicial deadlines are excluded from the regulatory freeze, as are those which “affect critical health, safety, environmental, financial, or national security matters.” In either circumstance, the memo calls for agency heads to notify the OMB director of any rules that they feel should be excluded.


Trade-Related Implications

According to a fact sheet released during the transition outlining the agency actions to be taken in this regard, primary areas of concern for the Biden administration are those rules affecting public health and the environment.  

In terms of international trade, Commerce has pushed back the effective date of its recently announced Aluminum Import Monitoring and Analysis System, from January 25, 2021, to March 29, 2021.  

Other regulations concerning trade and customs guidance that may possibly be subject to this temporary freeze include the following:

  • Proposed regulations from U.S. Customs and Border Protection concerning the “de minimis exemption” for Section 301 customs duties which is currently pending review by OMB’s Office of Information and Regulatory Affairs.
  • Proposed regulations concerning merchandise produced by convict or forced labor or indentured labor under penal sanctions (also pending OIRA review).
  • Bureau of Industry and Security controls regarding U.S. technologies and specific activities of U.S. persons who may be supporting foreign military-intelligence end-uses and end-users in China, Cuba, Russia, and Venezuela as well as those located in “terrorist-supporting countries”

Note: When considering the potential impact of the regulatory freeze, bear in mind that it applies not just to “rules” alone but also to “any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and any agency statement of general applicability and future effect [emphasis added} that sets for a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.” 


Need More Information?

Should you have any questions about the potential impact of this temporary regulatory freeze may have on your trade activities, don’t hesitate to contact one of our knowledgeable trade experts.

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