Commerce Should Clarify Whether Logistics Providers Are Subject to Supply Chain Proposal, Express Companies Say
The Commerce Department should make clear who involved in the import process might be subject to the proposed procedures for how to review transactions that involve information and communications technology and services (ICTS) and are seen as a potential threat, the Express Association of America said in comments. The Commerce proposal is meant as a way for the government to oversee transactions, including importations, seen as risky (see 1911260032). Comments on the proposal were due Jan. 10 and were posted in Commerce docket 2019-0005.
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Based on the proposed procedure, “it seems reasonable that the importer of the goods, i.e., the party causing the importation and the likely end user of the goods, would be the party subject to the rule,” the EAA said. “The logistics providers involved in the import or transfer of the goods, or playing the role of an importer of record, would have no knowledge of the end use of the goods and therefore could not be considered subject to the rule.” Logistics providers also aren't specifically listed in the proposal, it said. “If this understanding is not correct, EAA members would appreciate the Department of Commerce clarifying this point.”
Also, the lack of advance information requirements as part of the proposal seem to indicate that logistics providers involved in border clearance are not a focus for Commerce, the EAA said. “The private sector only knows that a shipment is subject to the rule when they are so informed following the Government’s evaluation, which further suggests this process is not related to the border clearance process,” it said.
The Commerce Department should establish a bright-line process similar to the export administration regulations’ entity list for identifying supply chain threats, USTelecom said in comments. Commerce's bright-line process should rely on Homeland Security Department “risk assessment and related tools to draw lines between prohibited and permitted transactions,” USTelecom said. The association asked Commerce to coordinate its transaction evaluations with other agencies at “every step.”
The Information Technology Industry Council recommended Commerce designate foreign adversaries threatening the supply chain with specific criteria. ITI called for a narrow scope for what transactions will trigger security reviews and a waiver process. It urged avoiding duplicative transaction reviews with export administration regulations, international traffic in arms regulations and the Committee on Foreign Investment in the U.S.
Commerce's proposed rules are “overly-broad and highly subjective,” BSA | The Software Alliance said. The proposed procedures would let Commerce “launch a review of virtually any ‘transaction’ involving almost any form of commercial technology, regardless of whether it has a clear nexus to national security or to a foreign adversary,” BSA wrote, saying it would create much industry uncertainty. The executive order directs Commerce to issue regulations barring technology from foreign companies -- like Huawei and ZTE -- from U.S. networks.