Biden Administration Issues Regulatory Freeze Impacting Tobacco Regulations

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The White House

With President Joseph Biden having now taken office comes news that the White House Office of Management and Budget has issued a freeze on all regulations issued by the Trump Administration that have not yet gone into effect, including the final rules announced last week impacting premarket tobacco applications (PMTA) and Substantial Equivalence (SE) applications.

The regulatory freeze was announced by Ronald A. Klain, assistant to the president and chief of staff, in a letter dated January 20, 2021. The letter, addressed to the heads of executive departments and agencies, stated the following:

“In order to ensure that the President’s appointees or designees have the opportunity to review any new or pending rules, at the direction of the President, I ask that you immediately take the following steps:

1. Subject to any exceptions the Director of the Office of Management and Budget (the “OMB Director”) allows for emergency situations or other urgent circumstances relating to health, safety, environmental, financial, or national security matters, or otherwise, propose or issue no rule in any manner–including by sending a rule to the Office of the Federal Register (the “OFR”) – until a department or agency head appointed or designated by the President after noon on January 20, 20, reviews and approves the rule. The department or agency head may delegate this power of review and approval to any other person so appointed or designated by the President, consistent with applicable law.

2. With respect to rules that have been sent to the OFR but not published in the Federal Register, immediately withdraw them from the OFR for review and approval as described in paragraph 1, subject to the exceptions described in paragraph 1. This withdrawal must be conducted consistent with OFR procedures.

3. With respect to rules that have been published in Federal Register, or rules that have been issued in any manner, but have not taken effect, consider postponing the rules’ effective dates for 60 days from the date of this memorandum, consistent with applicable law and subject to the exceptions described in paragraph 1, for the purpose of reviewing any questions of fact, law, and policy the rules may raise. For rules postponed int his manner, during the 60-day period, where appropriate and consistent with applicable law, 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. As appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law and policy, consider further delaying, or publishing for notice and comment proposed rules further delaying, such rules beyond the 60-day period. Following the 60-day delay in effective date:

a. For those rules that raise no substantial questions for fact, law, or policy, no further action needs to be taken;

b. For those rules that raise substantial questions of fact, law, or policy, agencies should notify the OMB Director and take further appropriate action in consultation with the OMB Director.

4. Exclude from the actions requested in paragraphs 1 through 3 any rules subject to statutory or judicial deadlines and identify such exclusions to the OMB Director as soon as possible.

5. Notify the OMB Director promptly of any rules that, in your view, should be excluded from the directives in paragraphs 1 through 3 because those rules affect critical health, safety, environmental, financial, or national security matters, or for some other reason. The OMB Director will review any such notifications and determine whether such exclusion is appropriate under the circumstances.

The above means that the recently finalized rules announced for premarket tobacco applications (PMTAs) and Substantial Equivalence (SE) will be subject to further review rather than being finalized as previously announced [read more here]. Premium cigars will not be impacted by this decision due to the court decision that temporarily excluded them from PMTAs [read more here]. The regulatory freeze also delays the codified definition of premium cigars from officially being entered into the federal record. That definition, taken from the Cigar Association of America court case’s definition of premium cigars, is: