The Commerce Department has published an Advance Notice of Proposed Rulemaking seeking comments on a proposal to restrict the use of information and communication technologies and services (ICTS) developed or supplied by foreign adversaries (e.g., China) in connected vehicles (CVs), an initiative that could impact virtually all auto makers and their suppliers selling into the US market. To inform its rulemaking, the Commerce Department’s Bureau of Industry and Security (BIS) has requested public comments by April 30, 2024.
BIS has initiated this rulemaking based on President Trump’s 2019 Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain,” promulgated pursuant to the International Emergency Economic Powers Act (IEEPA). The ICTS Executive Order grants the Commerce Secretary broad authority to restrict or prohibit transactions involving ICTS (acquisition, importation, transfer, installation, dealing in, or use of ICTS by any US person) in which a foreign country or national has an interest.
BIS indicates that it is considering rules that would:
- “prohibit certain ICTS transactions or classes of ICTS transactions by or with persons who design, develop, manufacture, or supply ICTS integral to CVs and are owned by, controlled by, or subject to the jurisdiction or direction of [China, Cuba, Russia, Iran, North Korea and Venezuela]”; and
- “allow market participants to engage in otherwise prohibited transactions … if the undue or unacceptable risks of those ICTS transactions can be sufficiently mitigated using measures that are monitorable.”
To support its CV rulemaking, BIS identifies 35 detailed questions for which it is seeking input from the public. Many of the questions focus on understanding the ICTS supply chain (e.g., categories of hardware and software, market leaders and market share, location where data is stored or processed, relevance of aftermarket ICTS supplies), while other questions focus on the presence of Chinese firms in the ICTS supply chain and yet other questions seek information on security vulnerabilities presented by the ICTS supply chain. If BIS proceeds with this rulemaking, this would be the most substantial regulatory action under the ICTS Executive Order.
