Monday, August 25, 2014

FTC Proposes Revisions to Energy Labeling Rule Requirements

by Elisabeth Ulmer

In June 2014, the Federal Trade Commission (“FTC”) proposed a rule to amend its labeling requirements under the Energy Labeling Rule.  The FTC intends “to expand coverage of the Lighting Facts label, change the current label categories for refrigerators, revise the ceiling fan label design, and require room air conditioner labels on packaging instead of the units themselves.”

The Energy Labeling Rule (“ELR”), formerly known as the Appliance Labeling Rule, was issued in 1979 under the Energy Policy and Conservation Act (“EPCA”).  The EPCA may require labeling on products if it is “likely to assist consumers in making purchasing decisions.”  The ELR establishes requirements for consumer appliance products in commerce, which is defined in the EPCA.  Products must include, as applicable, information about operating cost, water use, energy consumption, energy efficiency, and energy cost.

The FTC first sought comment on revisions to the labeling requirements of the ELR in a Notice of Proposed Rulemaking (“NPRM”) in March 2012.  In this NPRM, the FTC also recommended new labels to assist consumers in comparing refrigerators and clothes washers.  In the proposed rule, the FTC addresses the concerns of the public’s comments on the NPRM and suggests other amendments.

For instance, the FTC recommended requiring labels for more types of light bulbs, including all screw-based bulbs and GU-10 and GU-24 pin-based bulbs.  These labels would offer information about energy cost, brightness, and bulb life.  In the comments on the NPRM, some industry members were concerned about fitting required disclosures on packages and lamps, and thus recommended smaller labels and abbreviated content.  The FTC proposes a smaller, single label option for certain specialty use bulbs that come in small packages.  This label would contain information about lumens, energy cost, and bulb life, but not watts and light appearance.

Additionally, the proposed rule discusses the potential of an online label database on the Department of Energy’s website that will benefit both consumers and retailers.  Nevertheless, the FTC declared that it would not abandon physical labels for now because “not all consumers have online access, and not all those who do conduct online research before making purchase decisions.”

In order to pursue more durable labels for clothes washers, dishwashers, and refrigerators, the FTC and commenters debated hang tags versus adhesive labels.  Downsides of are that hang tags can easily come loose, while adhesive labels can leave behind unwanted residue.  The FTC ultimately decided to retain both kinds of labels as options, but may require adhesive labels in the future if the proposed improvements to hang tags do not sufficiently decrease the number of missing labels.

For ceiling fans, current labeling includes information on airflow, energy use, and energy efficiency at high speed.  However, the FTC proposes that new ceiling fan labels highlight the annual energy cost because, according to research on consumer preferences, energy cost is “a clear, understandable tool” for energy performance comparison by consumers.  Manufacturers would have two years to change their packaging.

Under the ELR, the FTC did not require labels for clothes dryers because the annual energy cost difference between models was only $5.  Thus, the FTC determined that the costs of energy labels would “far outweigh the potential benefits.”  Currently, according to Department of Energy tests, the annual energy cost difference between electric models is at most $11.  Thus, the FTC maintains that labeling would not have much of an impact on consumer choices, even taking into account the possibility of consumers using the energy information to compare the different fuels in clothes dryers or to decide to hang dry their clothes instead.  However, if more efficient dryers become widely available or if future testing methods reveal higher energy cost differences, the FTC may then decide to require labels for clothes dryers.

The comment period for this proposed rule closed on August 18th.  The FTC received no comments and will publish appropriate final amendments.

Monday, August 18, 2014

FinCEN Proposes Special Measure Against FBME

by Shannon Allen

The United States Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a notice of finding and proposed rule.  The Director of FinCEN found that FBME Bank Ltd. (“FBME”), formerly known as Federal Bank of the Middle Ease, Ltd., is a financial institution operating outside of the United States that is of primary money laundering concern. In this notice of proposed rulemaking (“NPRM”), FinCEN seeks to impose a special measure against FBME.  The special measure would proscribe covered financial institutions from opening or maintaining correspondent accounts for or on behalf of FBME.

On October 26, 2001, the President signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), Public Law 107-56. Title III of the USA PATRIOT Act amends the anti-money laundering provisions of the Bank Secrecy Act (“BSA”), codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314, 5316-5332, to promote the prevention, detection, and prosecution of international money laundering and the financing of terrorism. Regulations implementing the BSA appear at 31 CFR Chapter X.

The authority of the Secretary of the Treasury (the “Secretary”) to administer the BSA and its implementing regulations has been delegated to the Director of FinCEN.  The Director of FinCEN has the authority, if reasonable grounds exist, to determine that a foreign jurisdiction, institution, class of transaction, or type of account is of “primary money laundering concern,” and can require domestic financial institutions and financial agencies to take certain “special measures” to address the primary money laundering concern. (31 U.S.C. 5318A). 

FinCEN considered the following factors in deciding which special measures to impose:
  1. Whether Similar Action Has Been Or Will Be Taken By Other Nations Against FBME.  FinCEN encourages other countries to take similar action, although none have so far.
  2. Whether Imposition Of The Measure Would Create Any Undue Burden For Financial Institutions In The United States.  Only one U.S. covered financial institution currently maintains an account for FBME, thus FinCEN does not anticipate this measure will present an undue burden.
  3. The Extent To Which The Proposed Action Would Have A Significant Adverse Systemic Impact On The International Payment, Clearance, And Settlement System.  FBME is not a major player in the international payment system, is not relied on by the international banking community for clearance or settlement services, has only $2 billion in assets, and is headquartered in Tanzania, thus FinCEN does not anticipate this measure will have a significant adverse systemic impact on the international payment, clearance, and settlement system.
  4. The Effect Of The Proposed Action On United States National Security.  Imposing this measure against FBME would make it more challenging for money launderers, transnational organized crime, and terrorists to access the U.S. financial system, thus enhancing national security.

Based on weighing the above factors and finding FBME is a financial institution operating outside of the United States of primary money laundering concern, FinCEN proposes a special measure to proscribe covered financial institutions from opening or maintaining correspondent accounts for or on behalf of FBME. 

Comments on all aspects of this NPRM are invited, and FinCEN specifically seeks comment on the following:
  • The impact of the proposed special measure upon legitimate transactions utilizing FBME involving, in particular, U.S. persons and entities; foreign persons, entities, and governments; and multilateral organizations doing legitimate business.
  • The form and scope of the notice to certain correspondent account holders that would be required under the rule;
  • The appropriate scope of the proposed requirement for a covered financial institution to take reasonable steps to identify any use of its correspondent accounts to process transactions involving FBME; and
  • The appropriate steps a covered financial institution should take once it identifies use of one of its correspondent accounts to process transactions involving FBME.
Interested parties are invited to submit comments (identified by 1506-AB27) by September 22, 2014.  Comments may be submitted by only one of the following:
  • Federal E-rulemaking Portal: or
  • Mail: The Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183.

Monday, August 11, 2014

Meet Professor Anna Shavers, Incoming Section Chair

by Nina Hart

Anna Williams Shavers, the Cline Williams Professor of Citizenship Law at the University of Nebraska College of Law, is preparing to take the helm of the Section for the 2014-2015 bar year.  Below, she discusses her top priorities for the Section of Administrative Law and Regulatory Practice during her tenure.

1.  As incoming Chair of the Section, what are your priorities or goals for the Section this year?  Are there ways in which the Section members may be able to help you achieve these goals?

My major priority is to assure that Section members realize the benefits of their membership.  This can only be accomplished through the various committees and their leaders.   While achieving this priority, we can retain members as well as attract new members and recognize the diversity that they can bring to the Section.

2.  Are there any ongoing projects or initiatives that you are particularly interested in developing further or publicizing to Section members?
Regulatory reform and international regulatory cooperation are two issues that we will focus on this year.   The activity in the Supreme Court and Congress with respect to agency regulatory practice is an area that Section members must be aware of and be provided with some opportunity to have input regarding proposed interpretations of existing law and the creation of new law.   In addition, I believe that the increasing internationalization of regulated conduct will affect many agencies.  Therefore our Section needs to keep abreast of these issues.  We have two committees that focus particularly on international issues and they will present programs at the Fall Conference and throughout the year. 

3.  What advice might you give to lawyers or law students interested in being more involved with the Section?  Perhaps you could explain why you joined the ABA and this Section.

There are lots of opportunities for participation.  A list of our committees can be found at  Anyone who wants to be involved can contact me at  Involvement with the Section can be very rewarding.  As a professor, I find that the unique opportunity to discuss administrative law issues with agency lawyers, judges, lawyers in private practice, as well as other professors enriches my understanding in ways that I could not accomplish otherwise.  While there are other organizations where these groups interact, it is our Section that provides this opportunity for anyone who is an ABA member. The Section also provides an opportunity to create great friendships.

4.  What do you think are the biggest challenges facing administrative law practitioners? How could the Section assist attorneys with these challenges?

Managing the information now available because of the increasing use of technology presents a challenge to administrative law practitioners.  An administrative law practice requires decision making and decision making requires having the right information.  Technology creates massive amounts of information that practitioners must learn to handle.  The Section can assist in this task by providing timely and reliable materials and programming.

5.  What do you think is most valuable about the Section with regards to how it can assist attorneys either in their daily practice or in meeting the challenges of a changing legal market?

No matter how obtuse or difficult an administrative law issue is, there is an expert in the section on that issue.  These experts not only help create the Section publications and programs, but they also attend Section events and discuss these issues.  The experience and expertise of the Section members that is shared among Section members helps meet the challenges that present themselves in an administrative law practice. 


Monday, August 4, 2014

Early Bird Rates! 2014 Administrative Law Conference

The Section will hold it's annual 2014 Administrative Law Conference at the Omni Shoreham Hotel in Washington, D.C., October 16-17, 2014.  The agenda will include the following sessions the Regulatory Flexibility Act: A Guide for the Perplexed, The Future of Agency Guidance Documents and Policy Statements, and TTIP Enhanced Stakeholder Input, to name a few.  Register here for the early bird rate until September 15, 2014.  Hope to see you there!