Commerce Department Announces New Rules to Secure Drone Supply Chain

Elizabeth Cannon Executive Director, OICTS

Happy New Year, all! With the start of the new year, I wanted to provide some updates on my office.

When I talk with industry about the Information and Communications Technology and Services (ICTS) program at Commerce, I describe the two ways in which we can use our ICTS authority. One way is to investigate specific entities involved in ICTS transactions and determine whether their nexus to a foreign adversary and their involvement in those ICTS transactions cause undue risk to U.S. national security. If we conclude there is undue risk, we can prohibit the transaction or impose mitigating measures. The second way we can use the ICTS authority is to address a category of ICTS that we determine causes undue risk to U.S. national security if the ICTS is provided by an entity with a nexus to a foreign adversary. In those situations, we can issue a regulation to address the category of ICTS. Over the past month, OICTS has been busy on both fronts.

In early December, we issued our final ICTS rule, which replaces an interim rule that has been in effect since January 2021. The final rule establishes the procedures our office will use to review particular entities and their ICTS transactions. The rule makes several important updates to the interim rule, which include consolidating the list of technologies within the scope of the rule, outlining the sources of information the Secretary of Commerce may consider when formulating Initial and Final Determinations, and refining the recordkeeping requirements for parties to transactions. This rule will guide our individual investigations going forward. Over the coming year, we expect to announce the conclusion of several investigations and will publish the final determinations that accompany those actions, as we did with Kaspersky Lab Inc., last June.

Just today, we also released for public inspection in the Federal Register an advance notice of proposed rulemaking (ANPRM) regarding unmanned aircraft systems (UAS). As we did with Connected Vehicles, we are beginning our inquiry by asking a series of questions to better understand the ICTS integral to UAS, the risks associated with UAS, and the involvement of foreign adversaries in the supply chain. For those of you with equities in this space, please submit comments. Your thoughtful feedback helps us immensely as we determine whether and how to regulate foreign adversary involvement in this industry. (I want to emphasize that this ANPRM has been in development for months and predates any drone activity in New Jersey and New York.)

Finally, colleagues and I traveled to Asia (Japan, Taiwan, and South Korea) in early December to engage with counterparts there about our ICTS program. The meetings were incredibly productive, and I look forward to more engagements with allies in the coming year!

Final Rule

ANPRM

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