On November 26, 2019, the US Department of Commerce (Commerce) issued a highly anticipated proposed rule with proposed regulations (“Proposed Regulations”) to implement Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain” (Executive Order 13873).
Executive Order 13873 gives the Secretary of Commerce (“Secretary”) sweeping, unprecedented authority to prevent or modify transactions involving information and communications technology and services (“ICTS”) originating in countries designated as “foreign adversaries” which pose an undue risk to critical infrastructure or the digital economy in the United States, or an unacceptable risk to US national security or the safety of United States persons. All industries are potentially affected by the Proposed Regulations, whether directly or indirectly, which allow for case-by-case reviews of transactions at the Secretary’s discretion. Any transaction that is ongoing as of, or was initiated on or after, May 15, 2019, can be reviewed and there is no mechanism by which a company may seek to clear transactions in advance.
To see a summary of the background and the Proposed Regulations please see the rest of this article here.
If you wish to submit a comment to Commerce or have any questions, please contact the authors or any member of our Outbound Trade Compliance team, with whom you normally work. Comments must be submitted to Commerce on or before December 27, 2019.
The authors, Nicholas F. Coward, Paul E. Amberg and Eunkyung Kim Shin acknowledge the assistance of Iris Zhang in the preparation of this article.
