The first four weeks of the Trump administration have brought a flurry of policy and regulatory activity through Executive Orders (EO), proposed new legislation and review of existing regulation. After eight years of the Obama administration, there is a clear change in the way the business of Washington is being conducted. While some of this was anticipated based on President Trump’s campaign platform, business leaders are finding the level and pace of activity to be surprising and unsettling. While not a comprehensive overview, here are 10 things we believe are worth noting among the flood of developments flowing out of Washington in the last few weeks:
Bloomberg BNA’s Securities Regulation & Law Report has published the article “An Uneasy Relationship: The SEC and the Electronic Communications Privacy Act,” written by Akin Gump litigation partner Susan Leader, senior counsel Peter Altman, associate Erica Abshez and law clerk Kelly Handschumacher.
On February 3, 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a press release announcing sanctions against 25 individuals and entities that the U.S. government has associated with the supply chains of technology and materials being used by Iran to support its ballistic missile program. OFAC also designated individuals and entities acting on behalf of, or providing support to, Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Lebanon’s Hizballah. Notably, the OFAC press release emphasizes that these actions are “fully consistent with the United States’ commitments under the Joint Comprehensive Plan of Action (JCPOA)”—the nuclear deal reached with Iran and implemented last year.
On February 3, 2017, President Donald J. Trump issued a memorandum directing the U.S. Department of Labor (DOL) to re-examine the DOL’s final rule on who is a “fiduciary” of an employee benefit plan under the Internal Revenue Code and the Employee Retirement Income Security Act as a result of giving investment advice to a plan or its participants or beneficiaries. The order directed the DOL to prepare an updated economic and legal analysis concerning the likely impact of the rule, and rescind or revise the rule based on the results of this analysis.
On February 2, 2017, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Cyber-related General License (GL) 1, a general license that authorizes certain transactions with Russia’s Federal Security Service (Federalnaya Sluzhba Bezopasnosti or FSB). GL 1 authorizes U.S. persons (i.e., individuals and companies) to request, receive, use, pay for or deal in licenses, permits, certifications, or notifications issued or registered by the FSB for information technology (IT) products in Russia, provided that (i) the relevant IT goods or technology are subject to the U.S. Export Administration Regulations (EAR) and are licensed or otherwise authorized by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS); and (ii) payment of fees to the FSB for such licenses and other authorization or notification does not exceed $5,000 in any calendar year. GL 1 also authorizes transactions or activities that are necessary and ordinary incident to complying with law enforcement or administrative actions or investigations involving the FSB or rules and regulations administered by the FSB.
On February 2, 2017, the U.S. Senate passed, 52-48, a Joint Resolution provided under the Congressional Review Act (CRA), disapproving of the Securities and Exchange Commission’s (SEC) Final Rule titled “Disclosure of Payments by Resource Extraction Issuers.” The CRA provides for expedited consideration in the Senate, eliminating the threat of a filibuster and requiring only a simple majority for final passage. The Senate’s action comes one week after the House of Representatives approved the same resolution of disapproval along party lines, 231-191. President Trump is expected to quickly sign the resolution, effectively vacating the SEC’s Final Rule and prohibiting the agency from issuing any rule on the same subject matter without explicit direction from Congress.
On January 31, 2017, Acting Chairman of the Securities and Exchange Commission (SEC), Michael S. Piwowar, issued two statements calling for comments on the SEC’s enforcement of the conflict minerals reporting requirements of the Dodd-Frank Act. Congress implemented the conflict minerals reporting requirements in an effort to reduce funding to armed groups that commit human rights abuses and contribute to conflict in the Democratic Republic of Congo (DRC).