A sweeping Executive Order recently signed by U.S. President Donald Trump directing federal agencies to cut regulations could have significant long-term ramifications for importers and exporters.
Consistent with the systemic deregulation that has been a focus of the administration since taking office, though now given a greater sense of urgency by framing it as part of the federal government’s response to the impact of the COVID-19 pandemic, the May 19 order instructed agencies to eliminate “unnecessary regulations that impede economic recovery.”
“Just as we continue to battle COVID-19 itself, so too must we now join together to overcome the effects the virus has had on our economy,” the order states.
“Agencies should address this economic emergency by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery.”
“I’m directing agencies to review the hundreds of regulations we’ve already suspended in response to the virus and make these suspensions permanent where possible,” Trump said.
According to the White House, federal agencies and departments have taken more than 600 regulatory actions in reaction to COVID-19.
Key Elements & “Principles of Fairness”
Regarding enforcement actions, the order directs federal agencies to recognize “the efforts of businesses to comply with often-complex regulations in complicated and swiftly changing circumstances” and to act in accordance with “principles of fairness” when it comes to their enforcement and adjudication. These principles are as follows:
- The Government should bear the burden of proving an alleged violation of law; subjects of enforcement should not bear the burden of proving compliance.
- Agencies should provide any favorable relevant evidence in their possession to the subject of an administrative enforcement action.
- Liability should be imposed only for violations of laws or duly issued regulations after notice and opportunity to respond.
- Enforcement should be prompt and fair, in addition to being free of improper government coercion and “unfair surprise.”
- Penalties should be proportionate, transparent, and imposed in adherence to consistent standards and only as authorized by law.
- Temporary enforcement discretion or extensions of time for compliance may be considered.
While the COVID-19 and the economic recovery are the premises of the administration’s latest deregulation effort, agency discretion is not limited to pandemic-related actions, nor is it limited to the timeframe of possible enforcement actions that occur while the national emergency remains in effect. Instead, the duration is for the entirety of the “economic recovery” from the pandemic, which many economists predict could last several years.
The most consequential part of the Order is obviously the broad direction calling for federal agencies to temporarily or permanently rescind, modify, waive, or provide exemptions from regulations and other requirements that may inhibit economic recovery.
Legal experts have suggested this sweeping directive “could enable agencies to act more quickly on a wide range of trade-related measures, from tariff exemption and refund requests to applications for drawback and foreign-trade zone actions.”
Additionally, the order directs agencies to consider declining enforcement against those who have made good-faith attempts to comply with a requirement or guidance. Such changes in the exercise of enforcement and adjudication discretion (aka “compliance assistance”) together with implementation of the administration’s “principles of fairness” could have the practical effect of shifting the scarce agency resources in future toward the more pronounced and straightforward incidences of noncompliance.
Need More Information
If you have any questions or concerns about this change in administrative policy or about other regulatory and economic relief efforts being made in response to the pandemic, don’t hesitate to contact one of our knowledgeable trade experts today.