Industry News

Commerce to Investigate National Security Risk of Connected Vehicles

Feb. 29, 2024
By: Lawrence M. Friedman

President Biden has asked the U.S. Department of Commerce to investigate whether Chinese and other “connected vehicles” are a potential risk to U.S. national security. In response, the Commerce Department has issued a Notice of Proposed Rule Making seeking public comment. The concern is the extent to which PRC-based entities and entities that are tied to other foreign adversaries might use connected to vehicles to “capture wide swaths of data or remotely disable or manipulate connected vehicles . . . .” The request comes pursuant to Executive Order 13873 (May 15, 209), which is entitled “Securing the Information and Communications Technology and Services [“ICTS”] Supply Chain.” The full text of the Notice is available here.

Comments are due 60 days after the NPRM is published in the Federal Register, which is presumably March 1, 2024. That makes comments due April 20, 2024.

An affirmative finding could result in a prohibition on imports of connected vehicles of concern and their components, including software.

The Executive Order authorizes the Commerce Department to review and, if necessary, impose mitigation measures on or prohibit any ICTS transaction, which includes any acquisition, importation, transfer, installation, dealing in, or use of any ICTS by any person, or with respect to any property, subject to United States jurisdiction, when the transaction involves any property in which a foreign country or national has any interest. Before Commerce can impose mitigating measures of prohibit the importation of smart vehicles, it must find, in consultation with other agencies, that the suspect vehicles: (1) were designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary (including China) and (2) poses one of the following “undue” risks:

· sabotage to or subversion of the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of information and communications technology or services in the United States;

·         catastrophic effects on the security or resiliency of United States critical infrastructure or the digital economy of the United States; or

·         another unacceptable risk to the national security of the United States or the security and safety of United States persons.

Commerce is seeking public comment on a number of topics related to these questions including:

·         The proper definition of a “connected vehicle”

·         Threats posed by connected vehicles from producers tied to foreign adversaries

·         Details of the supply chains for connected vehicles

·         What would be the impact of disruptions to the supply chain for connected vehicles from producers tied to foreign adversaries

·         Concerns raised by vehicle data collecting including location, driver behavior, facial recognition, audio recording, or other vehicle telematics

·         Risks that connected vehicles can be demobilized or taken over by remote actors

Please reach out to any Barnes/Richardson lawyer if you have questions.

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