On January 14, 2021, as one of the last official actions of the Trump Administration, the US Department of Commerce (Commerce) issued the “Securing the Information and Communications Technology and Services [(ICTS)] Supply Chain” interim final rule (ICTS Rule), which would establish a structured process by which Commerce can assess certain ICTS transactions between US and foreign persons that pose an undue or unacceptable risk and “involve information and communications technology or services designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary[.]”
Then-Commerce Secretary Wilbur Ross noted in a recent Commerce press release that “[a]ggressively securing the ICTS supply chain will protect American citizens and businesses from vulnerabilities that could undermine the confidentiality, integrity, and availability of their personal information or sensitive data by malicious foreign adversaries and those who wish harm on the United States.”
In effect, the interagency review process that would be created under the new ICTS Rule to screen inbound foreign technology transactions would loosely parallel the one used by the Committee on Foreign Investment in the United States (CFIUS) to screen inbound foreign investments. The provisions of the ICTS Rule itself, as issued, would ensure there is minimal or no overlap between the two screening systems, and the contentious question of where exactly to draw this boundary between the two reportedly led to a bureaucratic turf battle within the Trump Administration between Commerce and the Treasury Department that delayed the publication of the ICTS Rule itself.
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