Supply Chain Council of European Union |
Supply Chain Risk

Proposed rule gives DOC power to ban foreign electronics suppliers

Dive Brief:

  • The Department of Commerce (DOC) seeks comment on a Notice of Proposed Rulemaking (NPRM) this week that, if implemented, authorizes the Secretary of Commerce to bar the acquisition, importation or use of information and communications technology it deems a risk national security, according to an agency press release and documents posted on the federal register.
  • The rule would examine the use of technology when foreign countries might have an interest. The agency notes the technology “supply chain has become increasingly vulnerable to exploitation and is an attractive target for espionage, sabotage, and foreign interference activity.”
  • The proposed rule says the Secretary of Commerce would consult “with other federal agencies” to determine if the technology posed a risk, but the final decision would lie with DOC.

Dive Insight:

An executive order signed by President Donald Trump in May gives the power to create such a rule to the agency and the Secretary of Commerce. When penned, the order banned Chinese tech manufacturer Huawei equipment from U.S. networks.

Nokia and Ericsson are looking to set up new supply chains outside of China over concerns their technology could be banned under the May order.

Under the proposed rule, if technology meets the standard, it is banned and the company is notified. The company can then appeal or provide information on changes being made. When a ban is put in place, an unclassified notice will be sent to the parties involved, and the public “as appropriate.”

The DOC’s rule proposal comes a week after the Trump administration issued a 90-day license extension for U.S. companies doing business with Huawei, according to Reuters.

The NPRM is open for public comment for 30 days.

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