ITI Asks Commerce to Delay Supply Chain Rule
The Commerce Department should delay implementing an interim final rule on securing the information and communications technology and services (ICTS) supply chain, the Information Technology Industry Council commented on March 22 in the Commerce docket. The rule is meant to address foreign adversaries’ exploitation of software and hardware sales and intellectual property theft (see 2101150055). “Casting an overly wide net to secure America’s ICTS supply chain in the form of import restrictions as contemplated under this IFR could inhibit the development and commercialization of new technologies in the United States, therefore undermining U.S. technological leadership and competitiveness by driving R&D programs and business 'transactions' to jurisdictions that do not impose such constraints,” the association said. The “breadth coupled with the broad discretion the rule grants to the Secretary continue to cast a cloud of uncertainty over almost all ICTS transactions and could undermine the national security objectives it purports to address, while also hindering U.S. competitiveness,” ITI said.
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The Business Roundtable said more clarification is needed. “Without further clarification, under the Proposed Rule” a U.S. company “importing electronics components from its wholly owned non-U.S. subsidiary could fall within the regime,” the BRT said. “The Proposed Rule also could reach financial transactions for the importation of electronics between a non-U.S. subsidiary and its U.S. parent or even the sale abroad by a U.S. person of foreign-made electronic components. Commerce should issue a second Proposed Rule that significantly clarifies and narrows the scope of transactions subject to these rules.”