The Department of Commerce’s ICTS rule prohibiting certain information and communications services and technology transactions went into effect earlier this week. In January, the Department committed to implement a licensing process by May 19 for entities seeking pre-approval before engaging or continuing to engage in ICTS transactions. The Department of Commerce has now announced that it is seeking public comments on the licensing process for pre-clearance of ICTS transactions by the end of April. The pre-publication notice is available here.
Commerce is seeking input on the following issues:
The broad scope of the ICTS rule will result in a high volume of licensing and pre-clearance requests. Companies impacted by this rule should act now to provide input into the licensing process. Companies that have not yet determined whether they are impacted by the ICTS rule should do so soon. While the timing of this request for comments calls into doubt Commerce’s ability to stand up a licensing and pre-clearance process by May 19, it demonstrates commitment to ensuring stakeholder engagement in the process. Foley & Lardner’s International Trade & National Security practice group includes the former Chief of Staff and acting General Counsel at the Department of Commerce as well as partners with extensive experience with CFIUS and other voluntary disclosure processes. If you wish to discuss this matter further, please contact Mike Walsh or Lewis Zirogiannis.