On January 19, 2021, the U.S. Department of Commerce published an interim final rule (the “ICTS Rule”) under former President Trump’s Information and Communications Technology and.
On January 19, 2021, the U.S. Department of Commerce (“DOC”) issued an interim final rule governing transactions in Information and Communication Technology or Services (“ICTS”).
In response to a U.S. government consensus that trade with China involves grave national security risks, the Trump Administration promulgated a broad series of China-directed export controls, economic sanctions and import rules. The flow of trade measures became a torrent in the Trump Administration’s final months. This alert briefly surveys key new trade controls from late in the Trump Administration and Chinese policy responses that the Biden Administration inherits.
It is not clear that the Biden Administration will prioritize a more regularized trading relationship with China. As it moves toward a more traditional governance, the Biden Administration may seek to develop an overall strategic policy toward China before undertaking piecemeal changes. When coupled with strong congressional support for tough measures on China, major modifications in U.S. treatment of China would not appear likely in the near term.
International Trade Update
U.S. Commerce Department Issues Interim Regulations Establishing Review Process for Information and Communications Technology and Services Supply Chains
January 27, 2021
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On January 19, 2021, the U.S. Department of Commerce (Commerce) issued interim final regulations (interim rules) implementing Executive Order 13873, Executive Order on Securing the Information and Communications Technology Services Supply Chain (EO), which was intended to address alleged threats against information and communications technology and services (ICTS) in the United States. The new review mechanism focuses on transactions involving any acquisition, importation, transfer, installation, dealing in, or use of ICTS that has been designed, developed, manufactured, or supplied by parties owned by, controlled by, or subject to the jurisdiction or direction of “foreign adversaries.”
not exhaustive or final, but can be revised by DOC as necessary.
The scope of prohibited transactions are those between U.S. persons and a “person owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary,” which includes:
Any person, wherever located, who acts as an agent, representative, employee, or any other capacity at the order, request, direction, or control of a foreign adversary;
A person whose activities are directly or indirectly supervised, directed, controlled, financed or subsidized in whole or in majority part by a foreign adversary;
Any person, wherever located, who is a citizen or resident of a nation-state controlled by a foreign adversary;