Commerce Department Moves to Protect Supply Chain for Information and Communications Technology and Services; Protected Transactions Will Include Quantum Technology
(JD.Supra) On January 19, 2021, the U.S. Department of Commerce published an interim final rule (the “ICTS Rule”) under former President Trump’s Information and Communications Technology and Services Executive Order issued in May 2019. If implemented by the Biden administration, the ICTS Rule will grant the U.S. government sweeping powers to counter foreign threats to the U.S. supply chain for a wide range of transactions that (1) involve information and communications technology or services (“ICTS”) designed, developed, manufactured, or supplied (2) by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary, and that (3) pose an undue or unacceptable risk to U.S. national security.
Depending on how broadly its ambiguous terms are construed and the scope and intensity the Commerce Department brings to the task, the ICTS Rule could impact all manner of otherwise standard, arms-length cross-border commercial transactions in the digital economy — particularly those involving China — and subject them to mitigation or even prohibition (the Commerce Department identified 4.5 million firms potentially subject to review).
The ICTS Rule broadly targets any “ICTS Transaction” — i.e., acquisition, importation, transfer, installation, dealing in, or use of ICTS, including managed services, data transmission, software updates, repairs, platforming/hosting of applications — within a defined scope.
ICTS tranactions include quantum technology:
ICTS integral to artificial intelligence/machine learning, quantum key distribution, quantum computing, advanced robotics, drones, or autonomous systems.