Quiero saber acerca de...

khammond on DSKJM1Z7X2PROD with RULES

Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Rules and Regulations 7.103 Initial Review of ICTS
Transactions Many commenters addressed the manner in which an ICTS Transaction could be identified to the Secretary as a transaction that should be reviewed.
In particular, many commenters sought clarity on the proposed provision that the Secretary could commence evaluations of transactions based on information received from private parties that the Secretary determines to be credible. The commenters requested clear guidance on what types of information, or parties, the Secretary would deem credible. Additionally, several commenters noted that such a provision might incentivize parties to engage in anti-competitive behavior that would not necessarily lead to identifying transactions posing risks to national security. In light of these comments and concerns, the rule clarifies that the Secretary may consider any referral for review of a transaction referral: 1 Upon receipt of any information identified in section 7.100a; 2 upon written request of an appropriate agency head; or 3 at the Secretarys discretion. Following receipt of a referral, the Secretary will assess whether the referral falls within the scope of 7.3a and involves ICTS
designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction of direction of a foreign adversary, and determine whether to: 1
Accept the referral and commence an initial review of the transaction; 2
request additional information, as identified in 7.100a, including information from the referring entity regarding the referral; or 3 reject the referral.
Several commenters requested the rule establish clearer procedures for how the Secretary will review ICTS
Transactions. Commenters also advocated for differing determination timeframes, deadlines, or milestones based on device nature, threat severity, equipment replacement risks, and other potential harms.
In response to these and other comments, the Department provides that, unless the Secretary determines in writing that additional time is necessary, the Secretary shall issue the final determination within 180 days of accepting a referral and commencing the initial review of the ICTS Transaction.
Regarding the procedures for the Secretarys review of ICTS Transactions, the Executive Order provides a careful process for the Secretarys decisionmaking. The rule further sets out the factors that the Secretary will consider
VerDate Sep<11>2014

16:33 Jan 17, 2021

Jkt 253001

to assist the decision-making process.
Specifically, the rule provides that the Secretary shall assess whether the ICTS
Transaction: Falls within the scope of 7.3a of the rule; involves ICTS
designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary; and poses an undue or unacceptable risk. The Secretary will evaluate each transaction, on a case-bycase basis, based upon the particular facts and circumstances, including the identity of the parties involved.
The rule also further articulates what the Secretary will consider when determining whether an ICTS
Transactions poses an undue or unacceptable risk. The Department has identified ten criteria for such determinations. Along with other factors, when determining if an ICTS
Transaction poses an undue or unacceptable risk, the Secretary will consider the nature of the information and communications technology or services at issue in the ICTS
Transaction, including technical capabilities, applications, and market share considerations; the nature and degree of the direction or jurisdiction exercised by the foreign adversary over the design, development, manufacture, or supply at issue in the ICTS
Transaction; and the statements and actions of the foreign adversary at issue in the ICTS Transaction. Other considerations include whether the ICTS Transaction poses a discrete or persistent threat and the nature of the vulnerability implicated by the ICTS
Transaction.
7.104 First Interagency Consultation The Department has clarified that the Secretary will consult with the appropriate agency heads after finding that an ICTS Transaction may fall within the scope of the Executive Order.
7.105 Initial Determination This rule clarifies that if, after review of an ICTS Transaction and consultation with the appropriate agency heads, the Secretary determines that such ICTS
Transaction meets the criteria in section 7.103c of the rule, the Secretary shall then issue an initial written determination explaining the finding and whether the Secretary has determined to prohibit or propose mitigation measures to the ICTS
Transaction at issue. The initial determination will contain no confidential information, even if such was relied upon to make the initial determination. Notice of this initial determination shall be served upon the
PO 00000

Frm 00041

Fmt 4700

Sfmt 4700

4917

parties to the ICTS Transaction known to the Secretary at the time of service.
Service may be made by registered U.S.
mail, facsimile, electronic transmission, or third-party commercial carrier, to an addressees last known address or by personal delivery. Service of documents will be considered effective upon the date of postmark, facsimile transmission, delivery to third party commercial carrier, electronic transmission or upon personal delivery.
Notice of the initial determination to the parties may also be accomplished by publication in the Federal Register where the Secretary determines that the initial determination concerns or could impact entities beyond the parties to the ICTS Transaction, where one or more of the parties to the ICTS Transaction are unknown to the Secretary, or in any other circumstance at the Secretarys discretion.
7.106 Retention of Records The proposed rule requested public comments on whether to require parties to undertake additional recordkeeping for information related to transactions.
Some commenters argued that the Department should not impose additional recordkeeping requirements.
Additionally, some commenters suggested that the recordkeeping requirement begin upon receipt of a transaction notice, rather than being an ongoing duty for any potentially prohibited ICTS Transaction.
After reviewing these comments, and consistent with IEEPA, the rule provides that, after receiving notification that an ICTS Transaction is under review or that an initial determination concerning an ICTS Transaction has been made, a notified person must immediately take steps to retain any and all records related to such transaction.
7.107 Procedures Governing Response and Mitigation Commenters requested that the final rule explain how the Secretarys determinations may be appealed and how mitigation agreements will be reached and enforced. Commenters also sought more robust procedures for waivers, appeals, and mitigation. The proposed rule had provided that, within 30 days of a preliminary determination by the Secretary that a transaction was an ICTS Transaction that would pose an undue or unacceptable risk to the U.S.
national security, parties to that transaction could submit a response to the decision. The proposed rule also allowed the Secretary to require a transaction be mitigated to reduce the risks the Secretary identified in the preliminary determination.

E:FRFM19JAR1.SGM

19JAR1