Regarding the Acquisition of StayNTouch, Inc. by Beijing Shiji Information Technology Co., Ltd., 13719-13721 [2020-05011]

Agencies

• Executive Office of the President

[Federal Register Volume 85, Number 47 (Tuesday, March 10, 2020)]
[Presidential Documents]
[Pages 13719-13721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05011]




                        Presidential Documents 



Federal Register / Vol. 85, No. 47 / Tuesday, March 10, 2020 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 13719]]

                Order of March 6, 2020

                
Regarding the Acquisition of StayNTouch, Inc. by 
                Beijing Shiji Information Technology Co., Ltd.

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, including section 721 of the Defense 
                Production Act of 1950, as amended (section 721), 50 
                U.S.C. 4565, it is hereby ordered as follows:

                Section 1. Findings. (a) There is credible evidence 
                that leads me to believe that (1) Beijing Shiji 
                Information Technology Co., Ltd., a public company 
                organized under the laws of China, and (2) its wholly 
                owned direct subsidiary Shiji (Hong Kong) Ltd., a Hong 
                Kong limited company (together, the ``Purchaser''), 
                through acquiring an interest in StayNTouch, Inc. 
                (``StayNTouch''), a Delaware corporation, might take 
                action that threatens to impair the national security 
                of the United States; and

                    (b) Provisions of law, other than section 721 and 
                the International Emergency Economic Powers Act (50 
                U.S.C. 1701 et seq.), do not, in my judgment, provide 
                adequate and appropriate authority for me to protect 
                the national security in this matter.

                Sec. 2. Actions Ordered and Authorized. On the basis of 
                the findings set forth in section 1 of this order, 
                considering the factors described in subsection 721(f) 
                of the Defense Production Act of 1950, as appropriate, 
                and pursuant to my authority under applicable law, 
                including section 721, I hereby order that:

                    (a) The transaction resulting in the acquisition of 
                StayNTouch by the Purchaser is hereby prohibited, and 
                ownership by the Purchaser of any interest in 
                StayNTouch and its assets, whether effected directly or 
                indirectly through the Purchaser, or through the 
                Purchaser's shareholders, partners, subsidiaries, or 
                affiliates, is also prohibited.
                    (b) In order to effectuate this order, not later 
                than 120 days after the date of this order, unless such 
                date is extended for a period not to exceed 90 days, on 
                such written conditions as the Committee on Foreign 
                Investment in the United States (CFIUS) may impose, the 
                Purchaser shall divest all interests in:

  (i) StayNTouch;

  (ii) StayNTouch's assets, intellectual property, technology, data 
(including customer data managed and stored by StayNTouch), personnel, and 
customer contracts; and

  (iii) any operations developed, held, or controlled, whether directly or 
indirectly, by StayNTouch at the time of, or since, its acquisition.

                    Immediately upon divestment, the Purchaser shall 
                certify in writing to CFIUS that such divestment has 
                been effected in accordance with this order and that 
                all steps necessary to fully and permanently abandon 
                the transaction resulting in the acquisition of 
                StayNTouch have been completed.
                    (c) Immediately from the date of this order until 
                such time as the divestment has been completed and 
                verified to the satisfaction of CFIUS, the Purchaser 
                shall refrain from accessing, and shall ensure that any 
                of its subsidiaries or affiliates refrain from 
                accessing, hotel guest data through StayNTouch. Not 
                later than 7 days after the date of this order, the 
                Purchaser shall ensure that controls are in place to 
                prevent any such data access

[[Page 13720]]

                until such time as the divestment has been completed 
                and verified to the satisfaction of CFIUS.
                    (d) The Purchaser shall not complete a sale or 
                transfer under subsection 2(b) of this section to any 
                third party:

  (i) until the Purchaser notifies CFIUS in writing of the intended 
recipient or buyer; and

  (ii) unless 10 business days have passed from the notification in 
subsection (d)(i) of this section and CFIUS has not issued an objection to 
the Purchaser.

                    Among the factors CFIUS may consider in reviewing 
                the proposed sale or transfer are whether the buyer or 
                transferee: is a United States citizen or is owned by 
                United States citizens; has or has had a direct or 
                indirect contractual, financial, familial, employment, 
                or other close and continuous relationship with the 
                Purchaser, or its officers, employees, or shareholders; 
                and can demonstrate a willingness and ability to 
                support compliance with this order. In addition, CFIUS 
                may consider whether the proposed sale or transfer 
                would threaten to impair the national security of the 
                United States or undermine the purposes of this order.
                    (e) From the date of this order until the Purchaser 
                provides a certification of divestment to CFIUS 
                pursuant to subsection (b) of this section, the 
                Purchaser and StayNTouch shall certify to CFIUS on a 
                weekly basis that they are in compliance with this 
                order and include a description of efforts to divest 
                StayNTouch and a timeline for projected completion of 
                remaining actions.
                    (f) Any transaction or other device entered into or 
                employed for the purpose of, or with the effect of, 
                evading or circumventing this order is prohibited.
                    (g) Without limitation on the exercise of authority 
                by any agency under other provisions of law, and until 
                such time as the divestment is completed and verified 
                to the satisfaction of CFIUS, CFIUS is authorized to 
                implement measures it deems necessary and appropriate 
                to verify compliance with this order and to ensure that 
                StayNTouch's operations are carried out in such a 
                manner as to ensure protection of the national security 
                interests of the United States. Such measures may 
                include the following: on reasonable notice to the 
                Purchaser and StayNTouch, employees of the United 
                States Government, as designated by CFIUS, shall be 
                permitted access, for purposes of verifying compliance 
                with this order, to all premises and facilities of 
                StayNTouch located in the United States:

  (i) to inspect and copy any books, ledgers, accounts, correspondence, 
memoranda, and other records and documents in the possession or under the 
control of the Purchaser or StayNTouch that concern any matter relating to 
this order;

  (ii) to inspect or audit any information systems, networks, hardware, 
software, data, communications, or property in the possession or under the 
control of the Purchaser or StayNTouch; and

  (iii) to interview officers, employees, or agents of the Purchaser or 
StayNTouch concerning any matter relating to this order.

                    CFIUS shall conclude its verification procedures 
                within 90 days after the certification of divestment is 
                provided to CFIUS pursuant to subsection (b) of this 
                section.
                    (h) If any provision of this order, or the 
                application of any provision to any person or 
                circumstances, is held to be invalid, the remainder of 
                this order and the application of its other provisions 
                to any other persons or circumstances shall not be 
                affected thereby. If any provision of this order, or 
                the application of any provision to any person of 
                circumstances, is held to be invalid because of the 
                lack of certain procedural requirements, the relevant 
                executive branch officials shall implement those 
                procedural requirements.

[[Page 13721]]

                    (i) The Attorney General is authorized to take any 
                steps necessary to enforce this order.

                Sec. 3. Reservation. I hereby reserve my authority to 
                issue further orders with respect to the Purchaser and 
                StayNTouch as shall in my judgment be necessary to 
                protect the national security of the United States.

                Sec. 4. Publication and Transmittal. (a) This order 
                shall be published in the Federal Register.

                    (b) I hereby direct the Secretary of the Treasury 
                to transmit a copy of this order to the appropriate 
                parties named in section 1 of this order.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    March 6, 2020.

[FR Doc. 2020-05011
Filed 3-9-20; 8:45 am]
Billing code 3295-F0-P