The ICTS Supply Chain Rules: Towards a U.S.-China Tech Decoupling?
A July 2022 report relayed the news that the U.S. Department of Commerce (Commerce) is investigating the installation of Huawei equipment into cell towers situated near U.S. military bases and missile silos, based on concerns the equipment could hoover up sensitive data and transmit it to China.
The report indicates that Commerce is carrying out the investigation pursuant to its rules implementing Executive Order (EO) 13873 on "Securing the Information and Communications Technology and Services Supply Chain" (the ICTS Rules).
What are the ICTS Rules, and how will they be enforced? The ICTS Rules empower Commerce to review — and as warranted, to mitigate, block, or unwind — dealings in information and communications technology and services (ICTS) that have a nexus with a designated "foreign adversary," including China and Russia.
As for enforcement, that has been a key question for industry since Commerce first issued the rules in January 2021, in the closing days of the Trump Administration. Since then, public reporting has shed light on Commerce's gradual efforts to wield its investigative powers and build out the administrative infrastructure needed to fully implement the rules.
As full maturation of the ICTS Rules seems to draw ever nearer, now is a good time to explore the rules in detail and assess their implications for cross-border tech development, which will be especially relevant for companies involved in telecommunications, connected applications, software development, and emerging technologies, or with a nexus to critical infrastructure.
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“The ICTS Supply Chain Rules: Towards a U.S.-China Tech Decoupling?” by Anthony Rapa was published on August 9, 2022, in in Westlaw Today, a Thomson Reuters publication. Reprinted with permission.