Recapping the Homeland Security Institute - Part 1

by Nina Hart

On August 21–22, 2014, the American Bar Association, Section of Administrative Law and Regulatory Practice hosted the Ninth Annual Homeland Security Institute in Washington, D.C.  The Institute included panels on a wide variety of issues including immigration, border security, the Foreign Corrupt Practices Act, the SAFETY Act, government contracting, and the DHS priorities for the upcoming years.  No post can possibly do justice to the myriad topics discussed.  Instead, this two-part piece will attempt to 1) set out several major themes of the Institute and 2) focus on issues in immigration law.

Part One

An area of emphasis for numerous speakers at the Institute was the role of technology in national security.  This post will provide an overview of some of the benefits and issues flagged by the panelists that come with the advent of increasingly sophisticated technology.  These reflections come from the following presentations: Law Enforcement Agenda 2014; The Foreign Corrupt Practices Act: Doing Business Internationally; Support Anti-Terrorism by Fostering Effective Technology (SAFETY) Act; and DHS General Counsel’s Office: New Technology and Homeland Security.  A copy of the full agenda is here.  

Importance of Information Sharing

Partnership and coordination are essential to effective law enforcement and improved national security.  Not only can such sharing increase efficiency of operations, but it can also lead to more successful operations.  For instance, the U.S. Customs & Border Patrol (CBP) relies heavily on the procurement of advanced information from airlines and other domestic and international agencies to identify travelers who pose national security risks.  If this information on travelers can be obtained and evaluated early, the travelers who require further clearance can be notified before boarding airplanes or arriving in the United States to only then be turned away.  With over 360 million travelers each year, or roughly one million per day, identifying the risks before travel occurs greatly reduces security risks and improves efficiency for all involved parties and agencies.

Additionally, in the context of criminal prosecutions, international coordination can greatly improve the chances of successful investigations.  For example, in one instance, a photo found in Boston was shared with state and international agencies, and ultimately led to the discovery of a child abuser in the Netherlands.  Information from the international investigation also led to the identification of a criminal partner in Massachusetts.

The Rise of Big Data and Improved Agency/Entity Performance

An improved ability to collect information and generate statistics is an increasingly important tool for both agencies and entities subject to regulation.  First, data collection can help agencies identify areas where their procedures could be improved and identify shortfalls in the office.  For instance, CBP offices are gathering data to assess the workload of their agents and determine how many staffers are required.  According to John Wagner, the Acting Assistant Commissioner in the Office of Field Operations, to function most effectively, the CBP requires nearly 4,700 additional officers.

Further, collection of data may help agencies identify whether substantives policies should be reconsidered.  For example, during one panel it was suggested that there might be a link between the United States’ policy of deporting alien felons and subsequent problems of human smuggling and trafficking.  In order to look more deeply into this and other law enforcement issues, the United States is working with nations including Honduras to collect and share information.  While it is too early to say what the data will show, collecting it is the first step toward making the requisite assessment.

Shifts in how agencies share information can also change larger trends in law enforcement and the way in which entities and individuals should consider and respond to liability risks.  For example, since the early 2000s, use of the Foreign Corrupt Practices Act (FCPA) has dramatically increased.  In part, this is due to agencies making this an enforcement priority.  However, as agencies have increased their ability to gather information and emphasized coordination, FCPA charges are often no longer brought alone but in the context of larger investigations (e.g. antitrust).  Additionally, because the agencies have more recently named senior executives in addition to the companies, the liability risks for the entities and individuals have greatly increased.  Thus, it becomes all the more important for companies to work with counsel early to develop monitoring plans and to consider making early disclosures as a show of good faith in order to mitigate the chances of or extent of liability.

Increased Cybersecurity Risks

Undoubtedly, improved technology helps law enforcement officials carry out their duties effectively and efficiently.  Enhanced technology, however, is not given solely to law enforcement but to the public at large, which increases the chance that individuals wishing to carry out cybercrimes will be successful.  As one panelist pointed out, an anti-malware program is often effective only once and has an average life span of one week because it is so easy and inexpensive to create new malware.  There is no easy resolution for this security threat, but panelists highlighted two main points.  First, all entities should have and continue to update their detection systems to both prevent security breaches and to respond quickly to breaches that do occur.  One resource available to entities is the best practices for security management guides published by the DHS.  Second, larger entities should be aware of the Support Anti-Terrorism by Fostering Effective Technologies Act (SAFETY Act).  This Act provides liability protection for entities that fall victim to physical or cyberterrorist attacks.

 

 

Brown Bag Lunch - Latest Developments at the Office of Special Counsel

The Section Government Personnel Committee is pleased to host a brown bag lunch entitled "Latest Developments at the Office of Special Counsel," October 6, 2014, from 12:00 - 1:30 p.m.  Confirmed Panelists include Louis Lopez, Associate Special Counsel, U.S. Office of Special Counsel; Shirine Moazed, Chief, Investigation and Prosecution Division, U.S. Office of Special Counsel; and Andrew J. Perlmutter, Attorney, Passman & Kaplan, P.C. (Moderator).  The event will be in the John Marshall Room of the ABA, Washington, DC office (1050 Connecticut Avenue).  Register online here.  Hope to see you there!

Section Member Receives Bar Association Award for Blog Contributions

by Lynn White

Elisabeth Ulmer, 2014 graduate of Villanova University School of Law, recently received the Irvin Stander Award for Excellence in Administrative Law from the Philadelphia Bar Association for her contributions to Notice and Comment while in law school.  Below she discusses the practical benefits of writing for Notice and Comment and how it will impact her future.

1.  How has writing for the blog influenced your understanding of administrative law?

Researching regulations for the blog reemphasized just how many different aspects of our everyday lives are regulated by administrative law and agencies.  This point also underscored how important it is for the public to participate in the rulemaking process and to share their comments, which many people currently do.

Furthermore, reading the rationales for rules provided me with concrete examples of how the administrative rulemaking process works.  For instance, some new rules are implemented to bring existing rules into accordance with older laws – such as the FDA’s move to update serving sizes in compliance with the Nutrition Labeling and Education Act of 1990.  Along those lines, I became more aware that the advances of technology frequently necessitate updated versions of rules – such as the FCC’s new rule permitting in-flight calls because that technology is now available.  Exploring the background of rules offered me greater insight into the ways in which policy and law intersect.

2.  Have you gained skills from writing for the blog? If so, what kind?

While writing for the blog, one skill that I am honing is the ability to take a 50-page regulation and condense it into about 500 words.  I must make strategic decisions about how to summarize a rule in a concise and understandable manner, and I enjoy figuring out how to write my blog in a way that will motivate people to check out the rule further and perhaps comment on it.

3.  How do you plan to use those skills in your career?

Writing will no doubt be a large part of my future, and today’s world is placing increasing priority on clear and concise writing.  I am confident that the skills I am developing while writing for the Notice and Comment blog will serve me well throughout my career.

 

If you would like to write for Notice and Comment, please e-mail Lynn White for details on how to become a contributor. 

 

 

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.

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: http://www.regulations.gov or
• Mail: The Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183.

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 http://www.americanbar.org/groups/administrative_law/committees.html.  Anyone who wants to be involved can contact me at annashavers.aba@gmail.com.  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. 

 

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!