New Commerce Rule Covering ICTS Transactions Involving Foreign Parties

A new rule effective March 22, 2021 establishes a process for the US Department of Commerce to review commercial transactions between US and foreign parties for certain information and communications technology and services (ICTS). Under the Interim Final Rule on "Securing the Information and Communications Technology and Services Supply Chain" (Interim Final Rule), Commerce has broad discretion to investigate, modify, block or unwind covered transactions involving certain identified foreign adversaries on national security grounds.

This rule, which was published by the Trump Administration on its last full day in office, is separate from the review of foreign acquisitions and foreign investments by the Committee on Foreign Investment in the United States (CFIUS), though the regulatory mechanisms are similar in certain respects. The Biden Administration is allowing the Interim Final Rule to come into effect despite criticism from some businesses and