Regulatory Freeze Order

The New Administration, Freeze Order and Impacts

With a new administration comes the regulatory freeze announcement and its potential impact on organizations and their strategic planning.  Issuing a freeze is so common that the communications almost appear boilerplate.  President Biden made interesting changes, however, in comparison to past presidents. 

First, the scope of the freeze has expanded.  It is normal for a freeze to cover “any substantive action by an agency … 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 notices of proposed rulemaking” and “any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.”  The announcement from the Biden administration includes both regulations published in the Federal Register (FR) and “rules that have been issued in any manner” for 60 days.  For rules postponed for 60 days, the administration asks agencies “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.”   This may provide interested parties the opportunity to weigh in again on rules whose comment periods have previously closed. 

Second, in an indication of administration priorities, environmental rules were added to the list of subject topics in contrast to the Trump administration regulatory freeze notice.

Finally, the Biden administration also gave notice that it might modify or extend the announcement, “Should actions be identified that were undertaken before noon on January 20, 2021, to frustrate the purpose underlying this memorandum”. 

So, what impacts will we see?

  • Aluminum Import Licensing requirements have been delayed from January 25, 2021 to March 29, 2021.
  • Proposed rules to exclude goods subject to Section 301 duties from using the Section 321 de minimis provisions may be delayed allowing the importation of shipments under $800 to continue not being subject to Section 301 duties.
  • The Continuing Education requirements for licensed customs brokers may be delayed as it just completed the comment period for its Advance Notice of Proposed Rulemaking in December 2020.
  • The Expansion of Certain End-Use and End-User Controls and Controls on Specific Activities of U.S. Persons currently in a comment period with BIS may be delayed.
  • Forced Labor proposed regulations regarding merchandise produced using convict labor, forced labor or indentured labor under penal sanctions. 

These are just a handful of possible impacts.  It is important to monitor the website of any agency that may affect your organization.  The freeze order does not mean these regulations and rules will not go into effect.  It does mean that you may have more time to manage risks and potentially additional opportunities to comment on proposed rules.