Commerce Subpoenas Chinese Companies As ICTS Rules Take Effect

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Secretary of Commerce Gina M. Raimondo recently announced that the Department of Commerce (“Commerce”) had served subpoenas on multiple Chinese companies that provide information and communications technology and services (“ICTS”) in the United States pursuant to Executive Order 13873 (“EO 13873”).  While it is unknown which companies were served or how many, Commerce’s recent action indicates that the Biden Administration will move forward  with implementing the ICTS rules written during the Trump Administration.  The subpoenas were served to support the requirements of reviewing transactions with the potential to harm U.S. national security, U.S. critical infrastructure, or the U.S. digital economy set forth in EO 13873.

President Trump issued EO 13873 on May 15, 2019 to prohibit the U.S. ICTS sector from using goods or services sourced from “foreign adversaries” by authorizing the Secretary of Commerce to block any ICTS transaction involving goods or services designed, developed, manufactured, or supplied from “foreign adversaries” or companies organized in a “foreign adversary” country, conducting operations in a “foreign adversary” country, or otherwise subject to the direction or control of a “foreign adversary.”  We encourage readers to review our January post on the interim final rule, which analyzes the ICTS rules taking effect on March 22, 2021 in greater detail.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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