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MEMA Joins More than 30 Other Major Trade Associations in Letter Urging Department of Commerce to Issue a Supplemental Notice of Proposed Rulemaking

Date: January 14, 2020

January 13, 2020 – MEMA has joined more than 30 other major trade associations urging the U.S. Department of Commerce to issue a supplemental notice of proposed rulemaking (SNPRM) to clarify and narrow the scope of an already-released notice of proposed rulemaking (NPRM), Executive Order 13873, Securing the Information and Communications Technology and Services (“ICTS”) Supply Chain (“proposed rule” or “proposal”). In a letter drafted by the U.S. Chamber of Commerce and addressed to Secretary Wilbur Ross, MEMA and the other associations argue that: “As written, the proposed rule would provide the U.S. government with the authority to intervene in, block, and unwind certain ICTS transactions on national security grounds.”

“Our members share the Administration’s commitment to ensuring that ICTS transactions do not pose undue risks to national security,” the letter reads. “However, we view the proposed rule as vague and highly problematic because as written, it would provide the Department with nearly unlimited authority to intervene in virtually any commercial transaction between U.S. companies and their foreign counterparts that involves technology, with little to no due process, accountability, transparency, or coordination with other government programs that are also designed to protect national security.

“Given the above, we strongly encourage the Department to issue a supplemental notice of proposed rulemaking (“SNPRM”) as the next step in developing this proposal. This SNPRM must: (1) clarify and narrow the scope of the proposal to identify which transactions are covered or excluded, and include a set of criteria to determine foreign adversaries prior to review; (2) ensure accountability and interagency collaboration; (3) establish meaningful and transparent procedures for government accountability; (4) provide necessary due process protections including notice to affected parties, pre-clearance mechanisms, rejection of information provided by third parties as a basis for commencement of an evaluation, and a mechanism for requesting advisory opinions; (5) ensure confidentiality of sensitive commercial information in the review process; and (6) define more robust procedures for waivers, appeals, and mitigation,” the letter argues.

In addition to MEMA, the letter was signed by representatives at the Alliance for Automotive Innovation; American Chemistry Council; American Gas Association; American Trucking Associations; Computer & Communications Industry Association; Here for America; Information Technology Industry Council (ITI); National Electrical Manufacturers Association (NEMA); National Foreign Trade Council (NFTC); National Restaurant Association; National Retail Federation; National Taxpayers Union; Semiconductor Industry Association; The US-China Business Council; U.S. Chamber of Commerce; USTelecom—The Broadband Association; and United States Council for International Business (USCIB).

MEMA also submitted detailed comments to the U.S. Department of Commerce specifically on behalf of the motor vehicle supplier industry.

“While we support your important objectives of securing the nation’s telecommunications technology and services supply chain, we have a series of concerns regarding the scope of this proposed rule and believe there may be unintended consequences of the current draft, which might adversely impact key national manufacturing industries, such as the motor vehicle and parts sector,” MEMA’s comments say. “In our sector, concerns have surfaced on the impact of this rule in the important new technology of vehicle connectivity, which is highlighted in the May 17, 2019, Presidential proclamation. Continued leadership in this arena is critical to the international competitiveness of our motor vehicle and parts industry.”

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