Tobacco Reviews, Cuomo Agency Merger, Defining Swaps: Compliance

Tobacco companies led by Altria Group Inc. and Reynolds American Inc. must get U.S. Food and Drug Administration approval to sell products introduced or changed in the past four years, a move that may let the agency keep more addictive items off the market.

Products that weren’t commercially available on Feb. 15, 2007, must be submitted for review, the FDA said yesterday in a statement. Items that aren’t “substantially equivalent” to those already for sale on that date or raise public health questions may be banned or withdrawn from sale, the agency said.

The reviews are required under a 2009 law that gave the FDA more authority to restrict tobacco marketing. Tobacco companies must pay fees to the agency to fund reviews and regulatory activities. Altria Group’s Philip Morris USA, the biggest U.S. cigarette maker, broke with rivals Reynolds American and Lorillard Tobacco Co. to back the law as a way to standardize manufacturing requirements and spur development of less harmful tobacco products.

More than 20 percent of adults in the U.S. smoke cigarettes, according to the Centers for Disease Control and Prevention in Atlanta. Smoking is the biggest cause of preventable death in the U.S, according to the CDC.

For more, see Interviews section, below.

Compliance Policy

Cuomo Says He Wants One Agency for New York Banking, Insurance

New York Governor Andrew Cuomo said he intends to merge the state’s departments of insurance and banking to save money and streamline regulation.

Cuomo, 53, who assumed office Jan. 1, gave his first State of the State address yesterday. He said during a Jan. 4 interview on Albany radio station Talk-1300 that consolidating the two departments would be part of an effort to cut costs.

Ron Klug, an insurance department spokesman, declined to comment, referring all questions to the governor’s office.

Before becoming governor, Cuomo served four years as state attorney general, responsible for policing the financial industry, which in 2007 accounted for as much as 20 percent of state revenue and 12 percent of New York City revenue, according to estimates by state Comptroller Thomas DiNapoli.

Billions May Ride on How U.S. Regulators Define ‘Swap Dealer’

Definitions of “swap dealer,” “major swap participant” and “swap execution facility” — previously undefined by regulators — are now at the heart of efforts to revamp regulation of the market.

The Dodd-Frank financial overhaul, enacted by U.S. President Barack Obama in July, requires the Commodity Futures Trading Commission and Securities and Exchange Commission to give meaning to the terms for the first time. During the three decades that swap-trading grew into a $583 trillion market, almost 40 times bigger than the U.S. economy, no one legally defined the terms.

The strength or weakness of Dodd-Frank — under which banks, hedge funds and possibly energy companies face the most stringent regulations — may ride on the exemptions and thresholds the CFTC and SEC write into hundreds of pages of definitions by mid-July.

Goldman Sachs Group Inc., JPMorgan Chase & Co., SAC Capital Advisors LP and Caterpillar Inc. are among firms that have held hundreds of meetings with the CFTC to discuss the definitions.

Largely unregulated swaps helped fuel the 2008 credit crisis. Dodd-Frank aims to improve transparency by moving some swaps to central clearinghouses and onto trading platforms such as exchanges and so-called swap execution facilities.

Gary Gensler, chairman of the CFTC, has said the definition of a dealer could include as many as 200 companies, touching off a tug-of-war with regulators over limiting the scope of the rule.

In a 179-page joint proposal in early December, the CFTC and SEC proposed definitions. Since then, industry groups have disagreed, resulting in public hearings. After delay of a Dec. 9 vote, a proposal was approved for public comment in a 4-1 vote on Dec. 16 and is subject to public comment.

For more, click here.

Tax Code Dotted With Subsidies, Advocate Report Says

Congress should rewrite the U.S. tax code to remove special-interest breaks and make the law easier to obey, and detail how the government spends taxpayers’ money, according to the annual report by the Internal Revenue Service’s Taxpayer Advocate.

National Taxpayer Advocate Nina Olson said the tax code, littered with narrow breaks that require a stack of regulations to interpret, is the biggest problem facing U.S. taxpayers.

“Our number one most serious problem and number one legislative recommendation is to go into the data in detail and provide a good sense of what tax complexity does to each and every one of our lives,” Olson wrote in her 10th annual report to Congress, released yesterday by the IRS.

In addition to a simplified tax code, she wrote, taxpayers should be provided with a receipt that shows how their tax dollars are spent, to help “bridge the disconnect” they feel with their government.

Olson, who operates as an autonomous figure within the IRS, cited dozens of statistics to illustrate the recordkeeping and compliance burden she said the tax code places on businesses and people.

For more, click here.

IMF Says Volatile Capital Flows Played ‘Key Role’ in Crisis

The International Monetary Fund is seeking to establish guidelines on how to deal with cross-border capital flows that are posing “policy challenges” to some countries.

“Volatile capital flows played a key role in the recent crisis, both in increasing vulnerabilities and in transmitting shocks across borders,” the IMF board said during a Dec. 17 meeting whose conclusions were made public yesterday.

The IMF’s guidelines “should be designed in a way that leaves sufficient room for country-specific circumstances.”

EU Farm Policy Must Address Volatility, Abuse, U.K. Farmers Say

The European Union’s farm policy must address price volatility and abuse of power, said Peter Kendall, president of the U.K.’s National Farmers’ Union, in response to comments by Environment Secretary Caroline Spelman that high prices allow for agricultural subsidies to be cut.

“We all want to get to a place where farming in Europe can be less dependent on support but there has to be recognition that this requires a long-term strategy that includes addressing the problems that continue to exist in the market: volatility and abuse of power,” Kendall said, according to a statement on the NFU’s website yesterday.

Compliance Action

Hungary Rejects Tax Criticism, Asks for Patience on Media Law

Hungary rejected criticism that industry taxes are targeted at foreign companies and asked for patience on a media law until European Union officials decide whether it meets European norms.

Foreign Minister Janos Martonyi said yesterday in Budapest, where Hungarian officials are meeting with reporters as the nation assumes the EU presidency, that it is “nonsense” that there is discrimination in the use of special taxes against foreign companies.

The European Commission, the EU’s executive, announced an investigation of the special industry levies and media law on Jan. 3, two days after Hungary took over the bloc’s rotating presidency. The commission will seek “clarification” on the media law at a meeting with Prime Minister Viktor Orban on Jan. 7, President Jose Barroso said yesterday in Brussels.

More than a dozen foreign companies, including RWE AG and Deutsche Telekom AG, wrote to the commission expressing concern for investments in Hungary after the cabinet imposed retroactive taxes on the energy, financial, retail and telecommunication industries to plug budget holes.


Deyton Says FDA Will Review Changes to Tobacco Products

Lawrence Deyton, director of the U.S. Food and Drug Administration’s Center for Tobacco Products, spoke about rules requiring tobacco companies to get FDA approval to sell products introduced or changed in the past four years.

The FDA’s David Ashley, Ann Simoneau and Cristi Stark also spoke on the teleconference.

For the audio, click here.

Levitt Says Goldman Facebook Investment Passes Muster

Arthur Levitt, former U.S. Securities and Exchange Commission chairman and an adviser to Goldman Sachs Group Inc., said Goldman’s investment in Facebook Inc. is “smart” and “no present rules have been violated.”

Goldman Sachs is buying $450 million of Facebook stock, which isn’t publicly traded, and offering clients in its private wealth management division an opportunity to invest about $1.5 billion, according to people familiar with the matter.

Levitt talked with Ken Prewitt and Tom Keene on Bloomberg Radio’s “Bloomberg Surveillance.” Levitt is a board member of Bloomberg LP, the parent of Bloomberg News.

For the audio, click here.

Princeton’s Reinhardt Says Health-Care Mandate Needs Overhaul

Uwe Reinhardt, a professor at Princeton University, and Dan Clifton, head of policy research at Strategas Research Partners, discussed efforts to overhaul the U.S. health-care system and compared the U.S. and Canadian systems.

They spoke with Tom Keene on Bloomberg Television’s “Surveillance Midday.”

For the video, click here.

Comings and Goings

Renault Manager Suspensions Said to Concern Electric-Car Leaks

Renault SA, France’s second-largest carmaker, suspended a senior executive for long-term product development and two others suspected of leaking electric-car secrets, two people with knowledge of the matter said.

Michel Balthazard, vice president for advance engineering and a member of the automaker’s management committee, was the highest ranking of three managers suspended without pay Jan. 3, the people said. They asked not to be identified because the disciplinary proceedings are confidential and incomplete.

The switchboard operator at Renault’s headquarters said Balthazard no longer works for the company. E-mails sent to his corporate address bounced back undelivered. The French phone directory has no listing for Balthazard.

Renault provisionally suspended three executives Jan. 3, with a decision on permanent sanctions to follow, spokeswoman Caroline De Gezelle said by telephone. No wrongdoing has been definitively established because the disciplinary process is ongoing, she said.

Similar Posts:

If you enjoyed this post, make sure you subscribe to my RSS feed!