The Biden administration has launched an inquiry that could ultimately result in import restrictions on smart automobiles that incorporate technology from China and other countries of concern.

According to a White House fact sheet, automobiles increasingly leverage advanced technologies to enable navigational tools, provide driver assist features, and reduce operating costs and carbon emissions through fast and efficient charging. These vehicles are constantly connecting with personal devices, other cars, U.S. infrastructure, and their original manufacturer.

As a result, a Department of Commerce press release states, the incorporation into connected vehicles of information and communication technologies and services provided by persons or entities owned, controlled, or subject to the jurisdiction or direction of a foreign adversary (currently defined to include China, Russia, Cuba, Iran, and North Korea) can create risks; e.g., by offering a direct entry point to sensitive U.S. technology and data or by bypassing measures intended to protect U.S. persons’ safety and security. This, in turn, may pose undue risks to critical infrastructure in the U.S. and unacceptable risks to national security. BIS cites China as a particular threat because it has “engaged in a pattern of hacking and cyber intrusion that demonstrates [its] intent to compromise and exploit U.S. ICTS supply chains and critical infrastructure.”

In response, the Bureau of Industry and Security is considering proposing rules that would prohibit certain ICTS transactions or classes of ICTS transactions by or with persons who design, develop, manufacture, or supply ICTS integral to CVs and are owned by, controlled by, or subject to the jurisdiction or direction of specifically identified foreign governments or foreign non-government persons. BIS is also considering proposing measures that would allow market participants to engage in otherwise prohibited transactions if the risks they pose can be sufficiently mitigated using measures that are monitorable.

BIS has therefore issued an advance notice of proposed rulemaking that seeks comments by April 30 to help it determine which ICTS related to connected vehicles, and which market participants, may be most appropriate for regulation. Among the issues on which input is being sought are the definition of CVs, the ICTS supply chain for CVs in the U.S. (including where individual components are made), the risks associated with CVs, the ICTS most integral to CVs and most vulnerable to compromise, and ways to address risks through potential design, implementation standards and protocols, manufacturing integrity protection systems and procedures, or prohibitions.

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