March 22, 2021

WASHINGTON — In comments submitted today to the U.S. Department of Commerce, global tech trade association ITI called on the agency to take a fresh look at Executive Order 13873, Securing the Information and Communications Technology and Services Supply Chain, in the context of a strategic review of the supply chain security policy landscape, as well as to delay implementation of the rulemaking as it reviews comments from stakeholders. Specifically, ITI noted concerns that the rule’s breadth coupled with the broad discretion the rule grants to the Secretary continue to cast a cloud of uncertainty over almost all ICTS transactions and could undermine the national security objectives it purports to address, while also hindering U.S. competitiveness.

“Of paramount importance to ITI and its member companies is our shared commitment to address risks to global information and communications technology supply chains and national security more broadly. We believe government and industry must work together to achieve the trusted, secure, and reliable global supply chain that is essential for protecting national security and an indispensable foundation for supporting innovation and economic growth,” ITI wrote in its comments. “We appreciate that Commerce has attempted to inject more certainty into this rulemaking by providing clarification and detail on certain items we had originally raised concerns with. However, the rule remains too broad and indefinitely retroactive to be practically implementable. At a minimum, ITI recommends that Commerce delay implementation of the IFR while comments from stakeholders are reviewed.”

In its comments, ITI welcomed the Biden Administration’s constructive efforts to initiate both targeted reviews and holistic assessments of critical supply chains via Executive Order 14017, and offered specific recommendations that this administration can take to address the many pre-existing shortcomings of the IFR, including:

  • Narrowing the scope to provide businesses with a greater level of certainty about what sorts of transactions will trigger a review based on those transactions that present discrete national security risks;
  • Clearly articulating evaluation criteria, including determining undue or unacceptable risk;
  • Avoiding duplicative review processes by considering existing mechanisms already in place for reviewing transactions potentially raising national security risks;
  • Ensuring evaluation criteria is not based solely on the designation of countries as Foreign Adversaries, instead taking into account a wide range of additional risk factors; and
  • Establishing a voluntary licensing process, publishing that process for public consultation, and issuing guidance on what types of transactions should be submitted for a license.

ITI has engaged with the Department of Commerce on its rulemaking to implement the Supply Chain Executive Order since its introduction in May 2019. In November 2019, ITI commended the Department for its ongoing efforts to develop a fact-based and focused analysis but in subsequent correspondence underscored the need for additional time to ensure industry could provide thorough feedback. In January 2020, ITI offered comments similar to those submitted today on the Department’s Notice of Proposed Rulemaking.

Last week, ITI also published a set of principles to guide the U.S. government as it undertakes its strategic review of supply chains.

Read ITI’s full comment submission here.

Public Policy Tags: National Security, Supply Chain