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Focus on Regulation

EU wine producers can now benefit from a temporary relaxation in competition rules

The European wine sector has been greatly affected by the COVID-19 pandemic. According to statistics from the European Commission (EC), there has been a 30% reduction in the volume of wine sold and a 50% drop in the value of sales across the EU from mid-March until to end of May 2020, compared to sales before the closures. As simply put by the EC, while COVID-19 has led to an increase of home consumption in wine, this has not compensated for the drop in demand in the hospitality and catering industry resulting in part from the closure of bars, restaurants and hotels. In recognition of the economic disruption faced by growers and producers of wine, and the fact that the situation is not forecasted to improve in the next 6 months, the EC has taken a rare step to adopt legislation to formally authorise certain agreements in the wine sector that may have otherwise fallen foul of EU competition law.

Article 101(1) of the Treaty on the Functioning of the European Union prohibits agreements that restrict competition. The prohibition includes, for example, agreements between market players that are aimed at limiting or controlling production. Thus, actions between suppliers seeking to agree on production volumes would typically be caught under Article 101(1) TFEU and be void, and potentially attract fines.

Under Regulation (EC) No 1308/2013 (otherwise known as the Common Markets Organisation Regulation), the EC is allowed to adopt acts that suspend the application of Article 101(1) TFEU to agreements in certain agricultural sectors during periods of “severe imbalance in markets” where the agreements strictly aim at stabilising the sector and do not impair the functioning of the internal market.

The EC has now adopted a new Regulation (2020/975) which specifically authorises farmers, farmers’ associations, associations of such associations, recognised producer organisations, associations of recognised producer organisations and recognised interbranch organisations (“operators”) to enter into agreements on the production of wine grapes and wine, including with regard to transformation and processing, storage, joint promotion, quality requirements and production planning. Provided that these agreements do not impair the functioning of the internal market, and are strictly aimed at stabilising the wine sector, they benefit from derogation from Article 101(1) TFEU. Importantly, the derogation does not apply to agreements on partitioning the market, discrimination on the basis of nationality or price-fixing. The derogation applies for period of 6 months from 8 July 2020, covering the first part of the 2020/2021 wine marketing season which starts in August.

The Regulation will increase the level of scrutiny by competition authorities in the wine sector. Already back in April last year, the French competition authority raided the premises of companies suspected of having engaged in possible anticompetitive practices involving wine and spirits. While there has been no suggestion that that particular investigation is now impacted by the EC’s measures (indeed the derogation does not have retrospective effect), the actions of operators in the wine sector will now be in the spotlight. The price of derogation from the competition rules is a reporting mechanism for operators to report on their concluded agreements, and for Member States in turn to report on those agreements to the EC. Competition authorities throughout the EU will now have to closely monitor cooperation efforts in this sector.

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Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – July 8, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The Trump administration continues to pressure local officials to open its schools for children to return to class, as the Department of Education Secretary Betsy DeVos threatened to cut federal funding to schools that don’t fully physically reopen. This morning, President Trump tweeted, “In Germany, Denmark, Norway, Sweden, and many other countries, SCHOOLS ARE OPEN WITH NO PROBLEMS. The Dems think it would be bad for them politically if U.S. schools open before the November Election, but is important for the children & families. May cut off funding if not open!” It is unknown how the administration would withhold the funding; according to a House Appropriations Committee spokesperson, the President doesn’t have the authority to do so.
  • Today Vice President Pence said the Centers for Disease Control and Prevention (CDC) will issue additional guidance next week on reopening schools. The comments came just after President Trump criticized the agency’s current guidelines as “very tough and expensive.” “We don’t want the guidance from CDC to be a reason why schools don’t open,” Pence said, “We want, as the president said this morning, to make sure that what we’re doing doesn’t stand in the way of doing that.”
  • Prime Minister Justin Trudeau skipped today’s United States-Mexico-Canada Agreement (USMCA) summit meeting with President Trump and Mexican President López Obrador. The Prime Minister’s office announced that he would not be attending the meeting because of a scheduling conflict, but most speculate that Canada’s handling of the coronavirus has more to do with the decisions. Trudeau is an ardent social distance and mask wearer, while President Trump and Obrador choose not to practice the same safety measures. Furthermore, though Trudeau, would be exempt from Canada’s 14-day quarantine reentry requirements, his staff would not be.
  • Harvard and the Massachusetts Institute of Technology (MIT) have moved to sue the Trump administration over its order to strip visas from international students who’s college courses have been moved entirely online. The universities filed a lawsuit today at the U.S. District Court in Boston seeking a temporary restraining order to pause the July 6 order.
  • A Treasury Department audit found that while some people never received their expected coronavirus stimulus payment, others got paid more than once. The Treasury Inspector General for Tax Administration said that about 46,000 people received two payments totaling $69 million.

 

In the News:

  • More than 131,000 people in the United States have died from the new coronavirus and over 3 million Americans have been infected, according to data compiled by Johns Hopkins University. Worldwide, over 11.8 million cases of Covid-19 have been reported, including at least 544,000 deaths.
  • Walgreens announced Wednesday it would add doctor offices through a partnership with VillageMD at its stores after a successful test run last year to bring more health care access under one roof, the pharmacy chain announced.
  • The number of Americans unable to make their full on-time housing payment hit a new high in July, as a resurgence in coronavirus cases threatened to derail the economy’s nascent recovery. Roughly one-third of households, 32 percent, have not made their complete housing payment in July, according to a survey published Wednesday by Apartment List, an online rental platform.
  • New York Mayor Bill de Blasio announced that the nation’s largest public school system would not fully reopen in the fall.

 

U.S. Supreme Court Finds TCPA’s Federal-Debts Exemption Unconstitutional; Leaves Rest of TCPA Intact

On June 6, 2020, the U.S. Supreme Court issued its decision in Barr v. American Association of Political Consultants, Inc., et al., settling an issue that has lingered over litigation under the Telephone Consumer Protection Act (TCPA) for the past several years. In a badly fractured opinion featuring multiple concurrences and dissents, a majority of the Court held that the TCPA’s federal-debts exemption, which immunizes from liability “calls made solely to collect a debt owed to or guaranteed by the United States,” was a content-based law that violated the First Amendment.  Instead of striking down the TCPA’s autodialer restriction in its entirety, as the respondents requested, the Court’s majority severed the federal-debts exemption from the remainder of the TCPA.  As a result, the TCPA’s autodialer restriction lives to see another day.

Procedural History

The TCPA was enacted in 1991 to restrict telemarketing activities and the use of automated dialing systems and artificial or prerecorded messages, often referred to as robocalls. As originally enacted, the TCPA prohibited almost all robocalls to cell phones placed without prior express consent.  The 2015 Bipartisan Budget Act, however, exempted from the prior express consent requirement calls made solely for the purpose of collecting a debt owed to or guaranteed by the United States (the federal-debts exemption). In 2016, American Association of Political Consultants, Inc. (AAPC) filed a lawsuit alleging that, in light of the new federal-debts exemption, the TCPA’s continuing ban on all other calls to cell phones violated the First Amendment. AAPC sought a declaratory judgment that the entire provision banning calls to cell phones was an impermissible content-based restriction on speech and an injunction preventing enforcement.

In 2018, a North Carolina federal court denied AAPC’s request for declaratory and injunctive relief. The district court agreed that the cell phone call ban with the federal-debts exemption was a content-based speech restriction subject to strict scrutiny, but it determined that the provision survived strict scrutiny because of the government’s compelling interest in collecting debt. The Fourth Circuit vacated the district court’s judgment in 2019, concluding that the cell phone ban as amended to include the federal-debts exemption could not survive strict scrutiny. Rather than invalidating the entire cell phone call ban as AAPC sought, the Fourth Circuit concluded that the federal-debts exemption was severable from the rest of the provision.

The Decision

In a fractured decision, the Court struck down (by a 6-3 vote) the federal-debts exemption under the First Amendment, holding that the exemption was a content-based restriction on speech that could not survive strict scrutiny. The Court also determined (by a 7-2 vote) that severing the federal-debts exemption from the remainder of the TCPA was the appropriate remedy.

In the controlling plurality opinion, Justice Kavanaugh concluded that the law was a content-based speech restriction because it “favors speech made for collecting government debt over political and other speech.” He also agreed with the government’s concession that “it ha[d] not sufficiently justified the differentiation between government-debt collection speech and other important categories of robocall speech.” On the issue of severability, Justice Kavanaugh first noted that AAPC’s broader initial argument for holding the entire robocall restriction unconstitutional was unpersuasive. Then, applying general severability principles, he concluded that the Communications Act’s severability clause and the presumption of severability required severing the federal-debts exemption.

Key Takeaways

As Many Questions As Answers. The Court’s opinion raises new issues that could factor into future TCPA litigation, including:

  • How might courts address content-based speech restrictions that differentiate between speakers, as opposed to the restrictions at issue in AAPC, which the Court found were message-based?
  • What justifications for content-based speech restrictions are sufficient to satisfy strict scrutiny?

Grandfathered Relief for Federal Debt Collectors. The Court specifically clarified that “no one should be penalized or held liable for making robocalls to collect government debt after the effective date of the 2015 government-debt exception and before the entry of final judgment by the District Court on remand in this case, or such date that the lower courts determine is appropriate.”

Autodialer Issue Remains Unresolved. The Court did not weigh in on a critical unsettled TCPA issue:  what constitutes an “automatic telephone dialing system” under the statute?

Next Steps

The Court may have another TCPA case on the horizon: Facebook v. Duguid, on petition for certiorari before the Supreme Court from the Ninth Circuit, raises the question of what types of technology qualify as an “automatic telephone dialing system” under the TCPA.

In the meantime, companies should continue to ensure that their activities comply with the TCPA’s requirements, and companies that previously benefitted from the federal-debts exemption will need to develop new procedures to ensure compliance.

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – July 7, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The White House moved forward with officially withdrawing the U.S. from the World Health Organization (WHO).  The withdrawal would not go into effect until July 6, 2021.  Sen. Foreign Affairs Committee Chairman Bob Menendez (D-NJ) said that the administration has informed Congress of its plans to withdraw from the organization. Menendez tweeted, “To call Trump’s response to COVID chaotic & incoherent doesn’t do it justice. This won’t protect American lives or interests — it leaves Americans sick & America alone.”
  • White House Chief of Staff Mark Meadows reiterated Monday that the President  been “very clear that he’s supportive of another stimulus check.”  Meadows said that a payroll deduction and incentives for U.S. manufacturers are two critical components that the president is asking for the legislation to address.   Meadows says he is in constant daily contact with Treasury Secretary Steven Mnuchin as he negotiates a Phase four stimulus deal with members in the House and Senate.
  • The Trump administration e is adding pressure on local officials to resume in-person learning at schools.  A senior official said today that despite the spike in coronavirus cases, it is safe for schools to reopen with protections in place for vulnerable students and staff.  The official said that schools are considered “high-priority settings” that are important for the well-being of communities and families and told reporters that the Centers for Disease Control and Prevention (CDC) encourages schools to make plans to reopen.  The official added that the CDC never recommended that they close in the first place. ”Our country has got to get back, and it’s got to get back as soon as possible. And I don’t consider our country coming back if the schools are closed,” the president said in the White House press release.
  • National Institute of Allergy and Infectious Diseases director Dr. Anthony Fauci said today that the President’s recent focus on the coronavirus’s decreasing mortality rate in the U.S. is “false narrative.”  On July 6 that the United States’ handle on the coronavirus outbreak is “really not good” and that action is needed to curb the spread.  In an interview via Facebook Live, the nation’s top infectious disease expert said, “We are still knee-deep in the first wave of this. And I would say, this would not be considered a wave. It was a surge, or a resurgence of infections superimposed upon a baseline.”  Fauci said some of the new cases are linked to cities and states who may have reopened too quickly.  
  • U.S. Immigration and Customs Enforcement (ICE) released guidance saying it will deport international students on F-1 and M-1 visas if universities and colleges go online.   In a statement, the U.S Department of State said it will not “issue visas to students enrolled in schools and/or programs that are fully online for the fall semester nor will U.S. Customs and Border Protection permit these students to enter the U.S.”  This could affect more than 1.1 million students in the country. 
  • The Trump Administration will pay the Maryland based vaccine maker Novavax $1.6 billion to develop 100 million doses of a coronavirus vaccine by early 2021 as part of Operation Warp Speed.  This is the largest government contract given to a vaccine maker to date. Operation Warp Speed has also given federal assistance to British drugmaker AstraZenca, as well as U.S. companies Moderna Therapeutics, Johnson & Johnson, Merck, and Sanofi for their experimental coronavirus vaccines.
  • Treasury Secretary Steven Mnuchin said Alaska Airlines, Delta Air Lines, JetBlue Airways, United Airlines, and Southwest Airlines have all signed letters of intent agreeing to federal government loan terms to assist with their recovery from the coronavirus pandemic.  The aviation companies join five other airlines that signed up for assistance last week under the CARES Act.  The airlines have until the end of September to decide whether they will access the loans. The companies are barred from cutting their employment levels more than 10 percent from their March 24 levels and are required to provide stock warrants in exchange for the loans.
  • The Environmental Protection Agency approved two Lysol products that will kill the novel coronavirus on surfaces.  These two products are the first to be directly tested against COVID-19 viral particles.

 In the News:

  • Brazil’s president Jair Bolsonaro has tested positive for coronavirus.   Bolsonaro, has repeatedly downplayed the severity of the virus and interacted with crowds of supporters in spite of social distancing advice. 
  • Quest and LabCorp, two of the U.S.’s largest coronavirus testing labs, are warning that there are delays in delivering coronavirus test results due to the surge in demand, including outbreaks in the South and West.  Both labs are essentially doubling the time it will take for them to report results.  Quest saying it will not take 4-6 days to give results and LabCorp 2 to 4 days.  The situation is compounded with appointment availability in some hotspot backlogged as long as a week.  The prolonged turnaround time also greatly hinders public health responses and has made contract tracing ineffective.
  • Amid the pressure of hundreds of experts, the World Health Organization (WHO) acknowledged the “emerging evidence” of airborne transmission of the coronavirus and has agreed to review its guidance on the spread of the coronavirus.   The organization has had an active engagement with the scientists who wrote the letter on airborne transmission and is planning to release its recommendations in the next few days. 
  • A Philadelphia nursing home gave some veterans what they called a “covid cocktail” that included hydroxychloroquine without coronavirus testing.   The Pennsylvania Department of Military and Veterans Affairs said about 30 residents received the drug, but several nursing home staff members placed the number higher.
  • Michigan’s attorney general has joined several other state prosecutors in a lawsuit against Education Secretary Betsy DeVos over a policy they say would take CARES Act funding from public schools in need and redirecting it to private schools. 
  • The Florida Department of Education has ordered that all Florida schools must reopen for in-person classes this fall.  According to the plan released Monday evening, all school boards and charter school governing boards must open brick and mortar schools in August at least five days per week for all students.

 

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – July 6, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • Any negotiations for a Phase Four deal stimulus package are tabled until Congress returns from its two-week recess on July 20.  Senate Majority Leader Mitch McConnell (R-KY) has suggested the Senate will focus on another coronavirus relief package after the chamber returns, with the goal of passage before the August recess. That period “dovetails nicely with the perfect time, to take an assessment of the economy and the progress we’re making on the health care front and see if there is additional assistance needed for our health care providers, ” McConnell said.  But negotiations are likely to be even more painful in this round, with Republicans and Democrats divided over what to do with billions of dollars in programs that are set to expire at the end of July.  One such program — the extra $600 per week in jobless benefits — has been a financial lifeline for America’s 44 million unemployed, but the two sides can’t agree whether to renew it. In mid-May, the House passed its own recovery package, which would deliver billions in aid to cash-strapped state and local governments, as well as hazard pay for frontline workers, housing and food assistance, and another round of stimulus checks to many Americans.  President Trump said in an interview he’s open to another round of direct payments to Americans.
  • The Trump administration on Monday disclosed the names of many small businesses which received loans under the Paycheck Protection Program (PPP) that was established as part of the $2 trillion CARES Act.   The full list is available on the Small Business Administration website. Those loans represent nearly three-fourths of total loan dollars approved, but a far smaller proportion of the number of actual loans. About 87 percent of the loans were for less than $150,000, according to the Small Business Administration (SBA).
  • President Trump on Saturday signed an extension of the small business loan Paycheck Protection Program (PPP) into law, according to the White House.  House lawmakers unanimously passed the extension less than a day after the program expired, and PPP will now remain open to applications through August 8.
  • The House Homeland Security Committee is set to hold a hearing on Wednesday to examine the national response to the COVID-19 pandemic.
  • U.S. Labor Secretary Eugene Scalia said he’s pleasantly surprised by the economic recovery so far, citing consumer spending and new housing construction.  He said that the extra $600 unemployment benefit provided by the first major relief package won’t be included in the next round of stimulus
  • U.S. Citizenship and Immigration Services has been sending furlough notices to roughly 7 in 10 people employed by the agency amid disagreements between the Trump administration and Congress over its request for $1.2 billion in emergency money.  The furloughs – along with preparations to suspend services – could begin on Aug. 3, and last indefinitely.
  • Dr. Stephen Hahn, the Food and Drug Administration (FDA) commissioner, said in a CNN interview that it is “too early to tell” if Jacksonville, Florida, will be able to safely hold the high-profile Republican National Convention events that are planned for Aug. 24-27, given the city’s and state’s rising number of COVID-19 cases.
  • The Trump campaign announced that the president will hold an outdoor rally on Saturday at Portsmouth International Airport in New Hampshire, encouraging supporters to wear face coverings and advising that attendees will have “ample access” to hand sanitizer.

In the News:

  • Florida and Texas hit a record number of daily coronavirus cases on Saturday, respectively reporting 11,445 and 8,258 new cases in the last 24 hours, according to figures released by the states’ health departments. The U.S. reported more than 52,000 new cases as the coronavirus spikes across the South and West.
  • The number of people hospitalized with COVID-19 grew by 5 percent or more Sunday in 23 states, based on a seven-day moving average, according to data compiled by the Covid Tracking Project, an independent volunteer organization.  Texas had more than 8,000 people hospitalized with the coronavirus on Sunday, a record high for the state since the beginning of the outbreak.
  • Kimberly Guilfoyle, the girlfriend of President Trump’s eldest son and a top fund-raising official for the Trump re-election campaign, tested positive for the coronavirus on Friday before a Fourth of July event at Mount Rushmore, a person familiar with her condition said.
  • The biotech company Regeneron announced the late-stage clinical trials of REGN-COV2, a double antibody cocktail for the treatment and prevention of COVID-19, in a news release on Monday.
  • Harvard University is welcoming freshmen and some other students back to campus this fall semester, but students will have to take coronavirus tests every three days, classes will still be taught online and it won’t discount tuition, the school announced Monday.

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – July 2, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The House unanimously passed a bill to revive the $670 billion small business aid program hours after it shut down on Wednesday, extending the Paycheck Protections Program (PP) until Aug. 8. The Senate had passed the legislation Tuesday night.  The program — which still has $130 billion in funding available has been a key pillar of the coronavirus recovery effort.
  • Six of the nation’s largest medical equipment distribution companies are raising “troubling concerns” about the Trump administration’s coordination of critical supplies to COVID-19 hot spots, according to a memo outlining a key House committee’s discussions with the companies.  Rep. Carolyn Maloney (D-NY) who chairs the House Oversight Committee, submitted the memo Thursday to the House Select Subcommittee on the Coronavirus ahead of its hearing on the administration’s efforts to procure, stockpile and distribute critical supplies during the pandemic.  In the memo, Maloney wrote that as the pandemic flares anew in several states, the companies are cautioning that the supply of personal protective equipment for medical staff is not meeting demand and that prices for raw materials have increased “dramatically.  “Despite months of effort, there are still severe shortages of PPE and critical medical equipment, and the Trump administration has no coherent strategy to address these deficiencies,” Maloney wrote.
  • President Trump on Wednesday said he supports another round of direct payments to Americans – and says he wants to give out more money than Democrats have already proposed. “I do, I support it, but it has to be done properly,” Trump said when asked during a Fox Business Network interview whether he was in favor of sending another round of stimulus checks.   But it’s unclear at this point what form another round of relief will look like, as Capitol Hill remains locked in debate over what should be included in the next stimulus package.
  • Treasury Secretary Steve Mnuchin said Thursday the White House has no regrets about pushing states to end their lockdown measures, despite spikes in coronavirus cases in several of the first states to reopen.  Asked at a Thursday press appearance whether the White House had any regrets about encouraging speedy reopenings, Mnuchin replied, “No, absolutely not. I think we’ve had a very careful plan working with the states — this is primarily the states’ responsibility — but working with the states.”
  • New foreign investment in the U.S. plunged in 2019, according to a Commerce Department report released “Spending by foreign investors ‘to acquire, establish, or expand U.S. businesses’ totaled $194.7 billion in 2019, the Commerce Department said in a preliminary estimate. That was down 37.7 percent from $312.5 billion in 2018 and below the annual average of $333 billion for 2014–2018.

 

In the News:

  • Nonfarm payrolls soared by 4.8 million in June and the unemployment rate fell to 11.1 percent as the U.S. continued its reopening from the coronavirus pandemic, the Labor Department said Thursday.  Economists had been expecting a 2.9 million increase and a jobless rate of 12.4 percent. The report was released a day earlier than usual due to the July Fourth holiday.  Meanwhile, another 1.4 million workers filed for unemployment insurance the last week.
  • The U.S. set another record for new coronavirus cases just days before the July Fourth weekend — with at least 23 states pausing reopening plans to combat mounting infections.  There were 50,203 new coronavirus cases reported nationwide Wednesday, a single-day record.  At least five states — Arizona, California, North Carolina, Tennessee, and Texas — reported a record number of new cases Wednesday
  • The worst of the U.S. coronavirus outbreak will end by January either with a vaccine or because enough people in the country will have already been infected and have some immunity to it, former Food and Drug Administration Commissioner Dr. Scott Gottlieb told CNBC
  • Five airlines have struck agreements with the Treasury Department for portions of $25 billion in federal loans aimed at softening the blow of the coronavirus pandemic on their businesses.  American Airlines, Hawaiian Airlines, SkyWest Airlines, Spirit Airlines and Frontier Airlines have signed letters of intent for the loan terms, the Treasury Department said Thursday.
  • Apple will close 30 additional stores in the U.S. by Thursday, the company said, bringing the total number of reclosures in the United States to 77 as COVID-19 cases rapidly rise in several regions around the country.
  • McDonald’s is pausing the reopening of dine-in service in the U.S. as coronavirus cases continue to spread across states.  The company said Wednesday that it would wait three weeks before any new U.S. restaurants add dine-in service to its drive-through, takeout and delivery operations.
  • Uber is extending its mask requirement indefinitely throughout the U.S. and Canada as coronavirus cases continue to rise across several states. The company previously said that both drivers and riders are required to wear masks during trips through June. On Wednesday, the company said it’s extending that rule.

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – July 1, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • Senate Republicans are beginning to put together their own fifth COVID-19 aid package, but with no apparent Democratic involvement it’s unlikely to receive enough support to pass both chambers, according to Roll Call.  Senate Majority Leader Mitch McConnell (R-KY) on Tuesday told reporters “What I can tell you without fear of contradiction is the focus will be kids, jobs and health care,” and said “any bill that passes the Senate will have liability protections in it.” One section of that package is already being drafted, according to Labor-HHS-Education Appropriations Subcommittee Chairman Roy Blunt (R-MO).  He told reporters that he’s directed the panel to begin working on legislation that would provide funding for more testing, additional work on therapeutics and vaccine research.  “A month from now we should be in the final stages of getting that bill together,” Blunt said.  But moving the bill through Congress, particularly before the August recess, is unlikely without the support of Democrats, who passed their own bill in the House last month and have urged McConnell to start bipartisan negotiations.
  • The House is set to vote Wednesday on a $1.5 trillion green infrastructure plan, H.R. 2, the “Moving Forward Act” that would provide billions to repair the nation’s crumbling roads and bridges while setting aside funds for broadband, schools and hospitals. It would also require states to commit to reducing greenhouse gases and other climate measures in order to receive funding.  President Trump has threatened to veto the bill but it’s likely won’t even make it to the Senate.  Senate Majority Leader Mitch McConnell (R-KY) said on Wednesday that the infrastructure bill will not be taken up in the Senate.
  • On Tuesday, the Senate cleared legislation to extend the deadline for businesses to apply for coronavirus aid under the Paycheck Protection Program (PPP).  Under the bill, the deadline would be extended until Aug. 8.  There’s approximately $130 billion in unspent money under the PPP which has prompted a discussion among lawmakers about what to do with the funds. 
  • Vice President Mike Pence is traveling to Phoenix, Arizona, today to meet with Gov. Doug Ducey (R) about the state’s recent rise in coronavirus cases.  Cases have been spiking in Arizona, and last week, Ducey said the state’s reopening plans are now “on pause” as a result.  Bars, gyms, movie theaters, water parks and tubing are closed for at least 30 days.  Arizona has reported nearly 80,000 cases of coronavirus since the pandemic began and more than 1,600 deaths.
  • Treasury Secretary Steven Mnuchin told Congress on Tuesday that the administration wants the next round of economic aid to focus on supporting businesses like restaurants that have been hardest hit by the coronavirus crisis.  Mnuchin said he is already talking to lawmakers about getting another round of relief approved by the end of July.  He said those discussions included ways to use leftover funds from the $2.2 trillion coronavirus relief bill signed 
  • The Food and Drug Administration (FDA) on Tuesday laid out its final guidance for developers of a coronavirus vaccine. The agency will require that any vaccine candidate be at least 50 percent more effective than a placebo to meet its approval standards 

In the News:

  • As of Tuesday, at least 35 states are seeing increases in daily coronavirus cases and  the U.S. is reporting around 40,000 new cases a day.  The inclines are particularly steep in southern states, including Florida, Mississippi, South Carolina, and Texas.  As a result, at least 18 states and cities are rolling back reopening plans.
  • Official Covid-19 death counts in the U.S. may underestimate the full rise in fatalities linked with the pandemic, according to a new study published today in the journal JAMA Internal Medicine.  The study found that the number of excess deaths that have occurred so far during the pandemic, between March and May, is actually 28 percent higher than the nation’s official number of deaths. 
  • In June, companies continued to bring workers back from their pandemic furlough as the national economy slowly came back to life.  Private payrolls grew by 2.369 million for the month, a bit lower than the 2.5 million expectation from economists, according to a report Wednesday from ADP and Moody’s Analytics.
  • United Airlines is planning to add about 25,000 flights in August, hoping to capitalize on an uptick in air travel. The Chicago-based carrier and its competitors are seeing an increase in travel demand from the five-decade lows hit in April
  • Airbus announced plans to cut 15,000 jobs over the next year as part of its biggest restructuring ever.
  • Pfizer released positive results from an early-stage human trial testing its coronavirus vaccine candidate. The company said one of its four coronavirus vaccine candidates produced neutralizing antibodies, which researchers believe is necessary to build immunity to the virus, in all participants, according to the preliminary data. 
  • Google announced Tuesday its U.S. offices will remain closed until Sept 7 due to rising coronavirus cases in some states.  The company was originally planning to reopen some buildings at roughly 10 percent capacity in July with the possibility to increase capacity to 30 percent in September. 

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – June 30, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The two top congressional Democrats are urging Senate Majority Leader Mitch McConnell (R-KY) to start negotiations on the next coronavirus relief package, as the country sees an uptick in cases.  Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) in a letter to McConnell on Monday accused Republicans of being “missing in action.” Senate Republicans are expected to wait until after the break to start negotiating and drafting the next potential relief bill. Though House Democrats passed a roughly $3 trillion bill earlier this year, it has been declared dead on arrival in the GOP-controlled Senate.  McConnell, on Friday, told reporters that a future coronavirus bill would have to come together in July and that the Senate would have to take the lead on drafting it. “If there’s a final rescue package, that’s when it will develop and it will start, once again, in my office. … The House efforts are simply not practical,” he said.  
  • The House on Monday passed a bill to expand the Affordable Care Act (ACA) in a largely party-line vote of 234 to 179.  The bill would increase the 2010 health law’s subsidies that help people afford their premiums and add more federal funding for Medicaid expansion.  The bill is not expected to go anywhere in the GOP-controlled Senate.  Also Monday, House Democrats passed a bill that would extend an eviction and foreclosure moratorium for renters and homeowners for a year, while also providing Americans additional financial housing assistance. The “Emergency Housing Protections and Relief Act” of 2020 includs several provisions from the $3 trillion Heroes Act, which has yet to be voted on in the Senate.  The bill’s housing provisions include $100 billion for a rental assistance fund and $75 billion for a homeowner’s assistance fund to cover rent, mortgage and utility expenses. 
  • President Trump threatened to veto House Democrats’ $1.5 trillion infrastructure plan on Monday, arguing it should eliminate or reduce environmental reviews and doesn’t route enough money to rural America.  The House is expected to pass the “Moving Forward Act,” H.R. 2 this week. The bill contains billions to repair the nation’s crumbling roads and bridges while setting aside funds for broadband, schools and hospitals. It would also require states to commit to reducing greenhouse gases and other climate measures in order to receive funding.  Republicans have branded it as an iteration of the Green New Deal crafted without their input.
  • Dr. Anthony Fauci and other health experts testified before the Senate Committee on Health, Education and Labor (HELP) at a hearing entitled “COVID-19: Update on Progress Toward Safely Getting Back to Work and Back to School.”  Fauci  said that the U.S. is “going in the wrong direction” as the number of coronavirus cases increase in the country. “I would not be surprised if we go up to 100,000 [cases] a day if this does not turn around and so I am very concerned,” Fauci said.  
  • The House Financial Services Committee heard testimony today from Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell in a hearing entitled “Coronavirus Aid, Relief, and Economic Security Act.”  Since mid-March, the Fed and Treasury have introduced a bevy of joint programs aimed at lending money where it is needed.  In Powell’s prepared remarks he indicates a commitment to keep the programs going to whatever extent necessary. The central bank chief also expressed concern about the “extraordinarily uncertain” outlook as the path of the coronavirus remains unclear.
  • Speaker Nancy Pelosi (D-CA) on Monday said House lawmakers who wish to vote remotely due to the pandemic can do so through mid-August, extending a deadline that was set to expire Saturday.  Pelosi first allowed proxy voting May 20. The new period for remote voting will last through Aug. 18. 
  • House Democrats are weighing how to enforce the use of masks on Capitol Hill during the coronavirus pandemic as a number of GOP lawmakers continue to defy the public health guidance.  House Majority Whip James Clyburn (D-SC), the chairman of the select committee overseeing the federal coronavirus response, warned on Monday he would not grant speaking time to any member not wearing a mask during future in-person hearings. “My Republican colleagues’ refusal to wear masks is perplexing because you have asked repeatedly to hold in-person hearings, and you assured me that this could be done safely. In response, I told you that I would work in good faith to hold in-person hearings if we could do so safely and consistent with the Attending Physician’s guidelines,” Clyburn wrote in a letter to House Minority Whip Steve Scalise (R-LA), the panel’s top Republican.
  • Companies have flooded the U.S. Trade Representative with hundreds of China tariff exclusion requests for products that could be used to help treat COVID-19, according to a report by Politico.  The comment period formally ended Thursday, but affected parties had three additional business days to respond. USTR has already temporarily exempted some Personal Protective Equipment (PPE) and medical goods from President Trump’s tariffs on more than $350 billion worth of Chinese goods.  But in late March, it asked for additional suggestions. 

In the News: 

  • More and more state officials are hitting pause or rolling back efforts to reopen the economy as the coronavirus spreads to new communities and gains speed in many parts of the U.S.  At least 16 states have paused reopening plans and more than half are reporting a rise in cases. New Jersey is delaying its reopening of indoor dining and Jacksonville, Florida the site of the Republican convention in August, issued a face mask requirementArizona Gov. Doug Ducey announced that he is ordering bars, clubs, movie theaters, waterparks and gyms to close for 30 days to curb the virus. 
  • Consumer confidence rose more than expected in June as the U.S. as some stay-at-home and quarantine restrictions were lifted.  The Conference Board’s consumer confidence index surged to 98.1 for the month, up from May’s reading of 85.9.
  • AMC Theatres is pushing back its reopening by two weeks after movie studios further delayed two summer blockbuster premieres that could be key to getting people to come back to theaters. The decision comes as several states are considering or reimplementing some coronavirus shutdown measures as cases surge in much of the country. 
  • The World Health Organization (WHO) will send a team of experts to China next week to investigate the original source of the coronavirus. “We can fight the virus better when we know everything about the virus, including how it started,” Dr. Tedros Adhanom Ghebreyesus, the head of the organization, said on Monday.

 

EU expands its sanctions against Venezuela

On 29 June 2020, the Council of the European Union have included eleven officials in the list of natural and legal persons, entities and bodies subject to asset freezing measures and a travel ban. The listed individuals are deemed responsible for serious human rights violations and for the repression of civil society and democratic opposition in Venezuela.

In view of the continuing deterioration of democracy, the rule of law and human rights in Venezuela, the Council expanded the list of natural and legal persons, entities and bodies subject to restrictive measures and a travel ban by adding 11 new individuals to the list (Council Implementing Regulation (EU) 2020/897 and Council Decision (CFSP) 2020/898). This decision brings the total number of individuals under sanctions to 36.

The individuals added to the list are responsible notably for acting against the democratic functioning of the National Constituent Assembly, including by stripping the parliamentary immunity of several members of its members, including its president, Juan Guaidó. The 11 listed officials are the following:

  1. José Adelino Ornelas Ferreira, Secretary-General of the National Defence Council;
  2. Gladys del Valle Requena, Member and Second Vice-President of the non-recognised National Constituent Assembly;
  3. Tania Valentina Diaz González, Member and First Vice-President of the non-recognised National Constituent Assembly;
  4. Elvis Eduardo Hidrobo Amoroso, Comptroller General and former First and Second Vice-President of the non-recognised National Constituent Assembly;
  5. Juan José Mendoza Jover, Second Vice-President of the Venezuelan Supreme Court of Justice (TSJ) and President of the Constitutional Chamber of the TSJ;
  6. Jorge Elieser Marquez Monsalve, Director-General of the National Commission of Telecommunications;
  7. Farik Karin Mora Salcedo, Prosecutor serving at the Venezuelan First Special Court of First Instance with an office within the Directorate-General of Military Counter-Intelligence;
  8. Dinorah Yoselin Bustamante Puerta, Prosecutor serving at the Venezuelan First Special Court of First Instance, with an office within the Directorate-General of Military Counter-Intelligence;
  9. Luis Eduardo Parra Rivero, Member and illegitimately elected President of the National Assembly;
  10. Franklyn Leonardo Duarte, Member and illegitimately elected first Vice-President of the National Assembly;
  11. José Gregorio Noriega Figueroa, Member and illegitimately elected second Vice-President of the National Assembly.

The EU sanctions on Venezuela were initially adopted on 13 November 2017 and aim to foster democratic solutions towards political stability in the country through a ban on arms and equipment for internal repression as well as asset-freezing measures (Council Regulation (EU) 2017/2063 and Council Decision (CFSP) 2017/2047).

Please also refer to our 2018 alert regarding the previous update of the Venezuela sanctions by the EU.

Coronavirus: The Hill and the Headlines – COVID-19 D.C. Update – June 29, 2020

Your guide to the latest Hill developments, news narratives, and media headlines provided by the Hogan Lovells Government Relations and Public Affairs team.

In Washington:

  • The House is set to vote on the two high-profile policy issues before leaving town for the two-week July 4 recess, however, neither of the measures is likely to be taken up in the GOP-controlled Senate, though they’ll give Democrats the chance to highlight their priorities as Washington ahead of the November election.  On Monday, the House is expected to pass legislation that would expand the Affordable Care Act.  The House is also slated to take up the “Emergency Housing Protections and Relief Act of 2020”, H.R. 7301, this week.  The bill is aimed at providing relief for homeowners and renters struggling amid the coronavirus pandemic, and is sponsored by Rep. Maxine Waters (D-CA). The provisions in the bill were previously included in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed largely along party lines and is not being taken up in the Senate.  Speaking on the House floor on Friday, Majority Leader Steny Hoyer (D-MD) said,“This bill would authorize nearly $200 billion for the dire housing needs arising due to the COVID-19 pandemic. H.R. 7301 which was included in the HEROES Act would help renters and homeowners by extending the eviction and foreclosure moratorium, provide $100 billion for emergency rental assistance and $75 billion for homeowners assistance to coverage mortgage, property tax, utilities and more than $11 billion for homeless assistance programs.” House Democrats will also vote on a $1.5 trillion infrastructure plan this week which would provide funding for transportation, the expansion of broadband and investments in schools and hospitals.
  • The Senate will continue its work on the National Defense Authorization Act (NDAA), which passed out of committee in a 25-2 vote earlier this month, authorizes $636.4 billion for the Pentagon’s base budget and $25.9 billion for national security programs within the Department of Energy. The Senate will vote to formally start debate on the bill on Monday night, but there have already been hundreds of potential amendments filed by senators.
  • On Tuesday, the House Financial Services Committee will hold a hearing on the Treasury Department and Federal Reserve’s response to the coronavirus. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell are scheduled to testify.  Under the March coronavirus stimulus bill both Mnuchin and Powell are required to testify before the panel on “the obligations of the Department of the Treasury and the Federal Reserve System, and transactions entered into, under this [CARES] Act.”  
  • Also on Tuesday, the Senate Foreign Relations Committee will hold a hearing on international pandemic preparedness and response and the Senate Health, Education, Labor and Pensions Committee will hold a hearing on how to safely return to work and school.  
  • Vice President Mike Pence has delayed campaign events scheduled for Arizona and Florida as coronavirus cases jump in those states, according to a senior Trump campaign official.  Pence, the leader of the White House coronavirus task force, still plans to travel to both states to meet with governors and health care officials, a White House official said. 
  • As coronavirus infections surge in the U.S. South and West, former Food and Drug Administration (FDA) commissioner Scott Gottlieb told CNBC on Monday that if not properly controlled, outbreaks in Florida, Texas, Georgia, South Carolina and California will likely spread significantly over the next couple of weeks and could result in half the U.S. population contracting coronavirus by the end of 2021. “By the time we get to the end of this year, probably close to half the population will have had coronavirus, and that’s if we just stay at our current rate,” Gottlieb said.
  • With airlines slowly restoring flights and more people navigating checkpoints, the federal agency responsible for the safety of the traveling public says it’s going to great lengths to make its screening process safer during the coronavirus pandemic.  The Transportation Security Administration (TSA) is spacing flyers apart in queues, reducing the number of “touchpoints” at the start of screening, putting up plastic barriers at bag-drop points, wiping down bins, and requiring screeners to wear masks.  But TSA is at heart a security agency, and there’s no substitute in its screenings for some person-to-person contact—even though that’s how the novel coronavirus spreads. 
  • Amid the rise in new cases, Health and Human Services (HHS) Secretary Alex Azar warned Sunday that the “window is closing” to curb the spread of the virus and get the outbreak under control.  In an interview with CNN Azar said “Things are very different from two months ago… So it is a very different situation, but this is a very, very serious situation and the window is closing for us to take action and get this under control.” He cautioned that if Americans “act irresponsibly, if we don’t socially distance, if we don’t use face coverings in settings where we can’t social distance, if we don’t practice appropriate personal hygiene, we’re going to see spread of disease.”

In the News:

  • New cases of coronavirus continued to surge over the weekend across several U.S. states, mostly in the American South and West, including in Arizona, Florida, Texas and California.  At least 12 states have hit pause on their reopening plans due to the surge in cases. 
  • Americans are downbeat as coronavirus cases spike in many states, a new CBS poll shows.  Only 5 percent said things in America are going “very well,” against 40 percent who said they’re going “very badly,” according to the survey, taken June 23-26.  
  • Total worldwide coronavirus cases topped 10 million yesterday, and more than 500,000 deaths have now been linked to the disease
  • Gilead Sciences announced Monday the pricing for its coronavirus treatment remdesivir, saying it will cost $3,120 for a typical U.S. patient with commercial insurance. The company announced its pricing plans in preparation for it to begin charging for the antiviral drug in July.  The company has been donating doses to the U.S. government for distribution since it received emergency use authorization in May. 
  • The European Union will allow outsiders to enter on July 1, but will bar most travelers from the U.S., Russia and other countries that are considered too risky because they have not controlled their outbreaks.
  • Medical device maker Danaher said on Monday its COVID-19 blood test for detecting if a person had ever been infected with the new coronavirus received emergency use clearance from the U.S. Food and Drug Administration. The company has shipped the antibody tests to nearly 400 U.S. hospitals and laboratories, and has ramped up production to deliver more than 30 million tests a month.

Amazon is providing full- and part-time workers with a one-time “Thank you” bonus for working during the coronavirus pandemic, the company announced.  Full-time warehouse, delivery and Whole Foods workers will receive a $500 bonus, while part-time workers will get a $250 bonus. Flex drivers who deliver packages for Amazon will receive $150 if they worked more than 10 hours in June. Whole Foods store managers will get a $1,000 bonus, and owners of Amazon’s third-party delivery services will get a $3,000 bonus