Evan Broderick Acting Executive Director of the Information and Communications Technology and Services (ICTS) program at BIS discussed the OICTS, a rapidly growing enforcement activity that set up shop last March.
Mr. Broderick manages operations and policy development under Executive Orders 13873, 14034, and 13984. His comments were delivered during a presentation to the Regulations and Procedures Technical Advisory Committee (RAPTAC) March 21st.
“The program started with the 2019 Order 13873. that is the Supply Chain EO as it's commonly referred to. It is essentially said that the secretary of commerce can prohibit or mitigate ICTS transactions: information and communications technology transactions that used data in transferred from and linked to a foreign adversary.
“Essentially it's anything that can communicate, that touches the Internet. We're talking telecom, satellites, mobile phones, and the WeChat TikTok issue. It's also 5G equipment, it's cyber security, software, it's cloud. If it if it can communicate, then we can regulate it.
“We do have investigations into multiple Chinese companies here in the US . The secretary announced that in March of last year. We have not yet taken any public action on them so you did not miss anything.
“Right now we have less than 10 people within the organization, and we have asked for and received $27 million from Congress as of this January. We have requested 100 full-time employees or full-time equivalent and we received that. Now, when it comes down to it though, it's going to take some time to ramp up the resources.”
Stephen Mulligan with the Congressional Research Service points out the following:
“Some observers have likened the ICTS review process to CFIUS, which assists the President in overseeing the national security implications of foreign investment in the U.S. economy. Both CFIUS and the ICTS review involve interagency processes to review and block certain commercial transactions with foreign entities that present national security concerns.
"However, while CFIUS traditionally reviews major corporate restructurings and acquisitions, the Supply Chain Rule authorizes Commerce to review individual commercial sales.
“For example, whereas CFIUS might prevent a foreign entity from acquiring a stake in a U.S. semiconductor company, under the Supply Chain Rule, Commerce could block a U.S. company from buying individual semiconductors from a foreign company in a foreign adversary’s jurisdiction”
15 CFR 7 Interim Final Rule [FR 86 4909] ; CRS [Report]
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