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Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Rules and Regulations this interim final rule will be effective March 22, 2021. The Department is committed to issuing a subsequent final rule in which the Department will consider and respond to additional comments received. In addition, the Department will implement and publish procedures for a licensing process by May 19, 2021.
II. Response to Comments During the public comment period on the proposed rule, the Department received a number of written submissions reflecting a wide range of views. All comments received by the end of the comment period are available on the public rulemaking docket at https www.regulations.gov.
Additionally, the Department participated in a number of meetings with foreign governments and industry groups to discuss the proposed rule prior to the comment period ending.
Summaries of those meetings are available at https
www.regulations.gov. Below, the Department addresses the comments as they pertain to each relevant provision of the regulation.
7.2

Definitions
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7.2Definition of appropriate agency heads Numerous comments addressed the extent to which the Department interacts with other agencies and department heads throughout the process for reviewing ICTS
Transactions. Some commenters advocated for the rule to require interagency review of all parts of the investigations and final determinations, while other commenters noted that interagency review should only happen during certain parts of the review process. Other commenters requested that the Secretary notify the heads of relevant agencies when a review is initiated.
Requirements regarding interagency review are already contained within the Executive Order and, thus, are not subject to change.
Nevertheless, for clarification, the Department has replaced the term identified secretaries with appropriate agency heads, to address the fact that some of the individuals referenced are not Cabinet Secretaries, but rather are heads of agencies. For clarity, the term appropriate agency heads refers to the Secretary of the Treasury, the Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Homeland Security, the United States Trade Representative, the Director of National
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Intelligence, the Administrator of General Services, the Chairman of the Federal Communications Commission, and the heads of any other executive departments and agencies the Secretary of Commerce determines is appropriate.
The Executive Order makes clear the Secretary of Commerce will confer with other agencies and departments as needed.
7.2Definition of Department Although it was not defined in the proposed rule, the Department has added a definition of the term Department to clarify that it refers to the United States Department of Commerce, rather than any other Cabinet-level agency.
7.2Definition of foreign adversary The rule grants the Secretary the authority to block or mitigate certain ICTS Transactions involving a foreign adversary. Commenters suggested limiting the definition of a foreign adversary to entities already identified in legislation. Some commenters recommended changing the concept of foreign adversary to focus on entities or persons instead of nation-states.
Other commenters suggested that the Department create a list of adversaries and a list of exempt countries and distinguish between government and non-governmental entities. Commenters also recommended narrowing the scope of the term foreign adversary to situations where a foreign adversary has controlling interest in the company executing the covered transaction.
The rule makes no changes to the definition of foreign adversary, which is consistent with the Executive Orders definition. However, as discussed further below, the rule now includes a provision titled Determination of foreign adversaries in section 7.4. This provision sets out the list of foreign governments and foreign nongovernment persons that the Secretary has determined, solely for the purposes of the Executive Order, this rule, and any subsequent rules, are foreign adversaries. It also explains some of the factors that the Secretary considered, and will consider, when making any future determinations of whether a country is a foreign adversary. Pursuant to the Secretarys discretion, the list of foreign adversaries will be revised as determined to be necessary. Because the determination of foreign adversaries is subject solely to the Secretarys discretion, such revisions will be effective immediately upon publication in the Federal Register without prior notice or opportunity for public comment.

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The list of foreign adversaries consists of the following foreign governments and non-government persons: The Peoples Republic of China, including the Hong Kong Special Administrative Region China; the Republic of Cuba Cuba; the Islamic Republic of Iran Iran; the Democratic Peoples Republic of Korea North Korea; the Russian Federation Russia;
and Venezuelan politician Nicolas Maduro Maduro Regime. The provision clarifies that the Secretarys determination is based on multiple sources, including the National Security Strategy of the United States, the Office of the Director of National Intelligences 20162019 Worldwide Threat Assessments of the U.S. Intelligence Community, and the 2018 National Cyber Strategy of the United States of America, as well as other reports and assessments from the U.S. Intelligence Community, the U.S. Departments of Justice, State and Homeland Security, and other relevant sources.
Additionally, the provision notes that the Secretary will periodically review this list in consultation with appropriate agency heads and may add to, subtract from, supplement, or otherwise amend the list.
It is important to note that the list at section 7.4 identifies foreign adversaries solely for the purposes of the Executive Order, this rule, and any subsequent rules. It does not reflect a determination by the United States about the nature of such foreign governments or foreign non-government persons for any other purpose.
7.2Definition of ICTS Transaction The proposed rule defined the term transaction using terms from the Executive Order, to mean, any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service. It also noted that the term transaction includes a class of transactions.
Some commenters requested the Department refine the definition of transaction in various ways. For example, some commenters suggested adopting language from the Securities Exchange Act of 1934 to define some of the terms in the definition, such as dealing in. Others urged the Department to further clarify the definition transaction to define the terms acquisition, or use in the definition.
The Department acknowledges that the terms transaction, acquisition, and use are broad, and retain their commonly-accepted meanings in the rule. The concerns raised by the
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