not “bury their heads in the sand” with respect to the investments of their controlled entities or other covered third country investments they knowingly direct.ConclusionIn sum, as currently drafted, the Proposed Rules paint the picture of a broad and complex program that would place considerable and, in some cases, unclear obligations on US persons that will have a chilling effect on investments in the select areas subject to the program. We expect Treasury, in finalizing the Proposed Rules, will carefully consider public and stakeholder feedback after the close of the comment period on August 4. While some adjustments may be made, we expect that Treasury will maintain the breadth of the program’s coverage of outbound investments in order to achieve the program’s national security goals. The Proposed Rules were published in the Federal Register on July 5, 2024. See Provisions Pertaining to US Investments in Certain National Security Technologies and Products in Countries of Concern, 89 Fed. Reg. 55846 (July 5, 2024). 89 Fed. Reg. at 55847.[View source.]

operating across the ICTS supply chain should review their contacts with suppliers from foreign adversary jurisdictions and stay abreast of relevant decisions in the field. The MoFo National Security team stands ready to help you assess your risks and answer any compliance questions. Binding Operational Directive 17-01: Removal of Kaspersky-branded Products, 82 F.R. 43782-84 (September 19, 2017). Federal Communications Commission, “FCC Expands List of Equipment and Devices that Pose Security Threat.” (March 25, 2022) (https://www.fcc.gov/document/fcc-expands-list-equipment-and-services-pose-security-threat). Office of Information and Communications Technology and Services, “” .Id.See id.; see also “Penalties” under the ICTS Supply Chain regulations, 15 C.F.R. § 7.200. Treasury recently announced its proposed rule to control outbound investment. See Proposed Rule, “Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern,” 89 FR 55846-55881 (July 5, 2024). Office of Information and Communications Technology and Services, “Kaspersky Frequently Asked Questions.”Id.See 15 C.F.R. § 7.103 (“Initial Review of ICTS Transactions”) and 15 C.F.R. § 7.3 (“Scope of Covered ICTS Transactions”). See also Client Alert, “Biden Administration Carries Forward Trump Era Executive Order Scrutinizing Imports and Sales of Certain Communications Technology and Services” (April 1, 2021).Id. at 52434–35. Id. at 52434–36. Final Determination, 89 F.R. at 52435. Commerce also addressed the question, “Doesn’t this action actually increase the risk of exploitation by other malicious foreign actors?” head-on in its FAQs, posted alongside the Final Determination (stating that this prohibition strengthens the broader cybersecurity ecosystem by removing Russian government access to U.S. customers’ computers and data). See Office of Information and Communications Technology and Services, “Kaspersky Frequently Asked Questions.” Final Determination, 89 F.R. at 52436.See 1