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Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Rules and Regulations the legal effect of this document upon publication in the Federal Register.
Signed in Washington, DC, on January 13, 2021.
Asha Mathew, Federal Register Liaison Officer, U.S.
Department of Commerce.

For the reasons set out in the preamble, 15 CFR part 7 is added to read as follows:

PART 7SECURING THE
INFORMATION AND
COMMUNICATIONS TECHNOLOGY
AND SERVICES SUPPLY CHAIN
Subpart AGeneral 7.1 Purpose.
7.2 Definitions.
7.3 Scope of Covered ICTS Transactions.
7.4 Determination of foreign adversaries.
7.5 Effect on other laws.
7.6 Amendment, modification, or revocation.
7.7 Public disclosure of records.
Subpart BReview of ICTS Transactions 7.100 General.
7.101 Information to be furnished on demand.
7.102 Confidentiality of information.
7.103 Initial review of ICTS Transactions.
7.104 First interagency consultation.
7.105 Initial determination.
7.106 Recordkeeping requirement.
7.107 Procedures governing response and mitigation.
7.108 Second interagency consultation.
7.109 Final determination.
7.110 Classified national security information.
Subpart CEnforcement 7.200 Penalties.
Authority: 50 U.S.C. 1701 et seq.; 50
U.S.C. 1601 et seq.; E.O. 13873, 84 FR 22689.

Subpart AGeneral
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7.1

Purpose.

These regulations set forth the procedures by which the Secretary may:
a Determine whether any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service ICTS Transaction that has been designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of foreign adversaries poses certain undue or unacceptable risks as identified in the Executive Order; b issue a determination to prohibit an ICTS
Transaction; c direct the timing and manner of the cessation of the ICTS
Transaction; and d consider factors that may mitigate the risks posed by the ICTS Transaction. The Secretary will evaluate ICTS Transactions under this
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rule, which include classes of transactions, on a case-by-case basis.
The Secretary, in consultation with appropriate agency heads specified in Executive Order 13873 and other relevant governmental bodies, as appropriate, shall make an initial determination as to whether to prohibit a given ICTS Transaction or propose mitigation measures, by which the ICTS
Transaction may be permitted. Parties may submit information in response to the initial determination, including a response to the initial determination and any supporting materials and/or proposed measures to remediate or mitigate the risks identified in the initial determination as posed by the ICTS
Transaction at issue. Upon consideration of the parties submissions, the Secretary will issue a final determination prohibiting the transaction, not prohibiting the transaction, or permitting the transaction subject to the adoption of measures determined by the Secretary to sufficiently mitigate the risks associated with the ICTS Transaction. The Secretary shall also engage in coordination and information sharing, as appropriate, with international partners on the application of these regulations.
7.2

Definitions.

Appropriate agency heads means 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 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 determines is appropriate.
Commercial item has the same meaning given to it in Federal Acquisition Regulation 48 CFR part 2.101.
Department means the United States Department of Commerce.
Entity means a partnership, association, trust, joint venture, corporation, group, subgroup, or other non-U.S. governmental organization.
Executive Order means Executive Order 13873, May 15, 2019, Securing the Information and Communications Technology and Services Supply Chain.
Foreign adversary means any foreign government or foreign non-government person determined by the Secretary to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national
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security of the United States or security and safety of United States persons.
ICTS Transaction means any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service, including ongoing activities, such as managed services, data transmission, software updates, repairs, or the platforming or data hosting of applications for consumer download. An ICTS
Transaction includes any other transaction, the structure of which is designed or intended to evade or circumvent the application of the Executive Order. The term ICTS
Transaction includes a class of ICTS
Transactions.
IEEPA means the International Emergency Economic Powers Act 50
U.S.C. 1701, et seq..
Information and communications technology or services or ICTS means any hardware, software, or other product or service, including cloudcomputing services, primarily intended to fulfill or enable the function of information or data processing, storage, retrieval, or communication by electronic means including electromagnetic, magnetic, and photonic, including through transmission, storage, or display.
Party or parties to a transaction means a person engaged in an ICTS
Transaction, including the person acquiring the ICTS and the person from whom the ICTS is acquired. Party or parties to a transaction include entities designed, or otherwise used with the intention, to evade or circumvent application of the Executive Order. For purposes of this rule, this definition does not include common carriers, except to the extent that a common carrier knew or should have known as the term knowledge is defined in 15
CFR 772.1 that it was providing transportation services of ICTS to one or more of the parties to a transaction that has been prohibited in a final written determination made by the Secretary or, if permitted subject to mitigation measures, in violation of such mitigation measures.
Person means an individual or entity.
Person owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary means any person, wherever located, who acts as an agent, representative, or employee, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign adversary or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in majority part
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