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White House Clarifies Effort to Reduce Federal Regulations

Wednesday, April 12, 2017
Sandler, Travis & Rosenberg Trade Report

The White House has provided additional information on implementing a Jan. 30 executive order directing federal agencies to reduce regulation and control regulatory costs. This effort is likely to affect import, export, and other trade-related regulations issued by agencies such as U.S. Customs and Border Protection and the Department of Commerce, although the extent of this impact remains unclear.

EO 13771 requires executive departments or agencies publicly proposing or otherwise promulgating new regulations to identify at least two existing regulations to be repealed. In addition, any new incremental costs associated with new regulations must be offset by the elimination of existing costs associated with at least two prior regulations.

This order does not apply to regulations associated with national security or foreign affairs functions; regulations related to agency organization, management, or personnel; or any other category of regulations exempted by the Office of Management and Budget. Some trade agency officials have said they are still trying to determine which of their regulatory actions might qualify for these exemptions.

An April 5 memo from the Office of Information and Regulatory Affairs provides the following guidance to help agencies comply with EO 13771.

Agencies. A cabinet department is considered a single agency for purposes of EO 13771 compliance. The order does not apply to independent regulatory agencies.

Regulatory Actions. EO 13771 applies to (a) significant regulatory actions that have been finalized and impose total costs greater than zero and (b) significant guidance documents (e.g., significant interpretive guidance) reviewed by OIRA that have been finalized and impose total costs greater than zero. It covers regulations issued after noon on Jan. 20 even if they are finalizing a proposed rule issued before then.

Deregulatory Actions. Acceptable deregulatory actions include informal, formal, and negotiated rulemakings; guidance and interpretive documents; some actions related to international regulatory cooperation; and information collection requests that repeal or streamline recordkeeping, reporting, or disclosure requirements.

Both deregulatory actions and the associated cost savings may be “banked” for use in the same or a subsequent fiscal year, may be transferred within individual agencies, and could (upon OMB approval) be transferred between agencies.

Exemptions. The following categories of regulatory actions may qualify for a full or partial exemption (other categories may be approved as well).

- expressly exempt actions (see above; full exemption)

- regulations addressing emergencies such as critical health, safety, financial, or non-exempt national security matters (offsets will still be required but after the emergency regulation has been issued)

- statutorily or judicially required actions (offsets must be done as soon as practicable after the issuance of the regulation)

- actions with de minimis costs (full or partial exemption)

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