Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern, 54867-54872 [2023-17449]

Agencies

• Executive Office of the President

[Federal Register Volume 88, Number 154 (Friday, August 11, 2023)]
[Presidential Documents]
[Pages 54867-54872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17449]



[[Page 54865]]

Vol. 88

Friday,

No. 154

August 11, 2023

Part V





The President





-----------------------------------------------------------------------



Executive Order 14105--Addressing United States Investments in Certain 
National Security Technologies and Products in Countries of Concern


                        Presidential Documents 



Federal Register / Vol. 88 , No. 154 / Friday, August 11, 2023 / 
Presidential Documents

___________________________________________________________________

Title 3--
The President

[[Page 54867]]

                Executive Order 14105 of August 9, 2023

                
Addressing United States Investments in Certain 
                National Security Technologies and Products in 
                Countries of Concern

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, including the International Emergency Economic 
                Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the 
                National Emergencies Act (50 U.S.C. 1601 et seq.) 
                (NEA), and section 301 of title 3, United States Code,

                I, JOSEPH R. BIDEN JR., President of the United States 
                of America, find that countries of concern are engaged 
                in comprehensive, long-term strategies that direct, 
                facilitate, or otherwise support advancements in 
                sensitive technologies and products that are critical 
                to such countries' military, intelligence, 
                surveillance, or cyber-enabled capabilities. Moreover, 
                these countries eliminate barriers between civilian and 
                commercial sectors and military and defense industrial 
                sectors, not just through research and development, but 
                also by acquiring and diverting the world's cutting-
                edge technologies, for the purposes of achieving 
                military dominance. Rapid advancement in semiconductors 
                and microelectronics, quantum information technologies, 
                and artificial intelligence capabilities by these 
                countries significantly enhances their ability to 
                conduct activities that threaten the national security 
                of the United States. Advancements in sensitive 
                technologies and products in these sectors will 
                accelerate the development of advanced computational 
                capabilities that will enable new applications that 
                pose significant national security risks, such as the 
                development of more sophisticated weapons systems, 
                breaking of cryptographic codes, and other applications 
                that could provide these countries with military 
                advantages.

                As part of this strategy of advancing the development 
                of these sensitive technologies and products, countries 
                of concern are exploiting or have the ability to 
                exploit certain United States outbound investments, 
                including certain intangible benefits that often 
                accompany United States investments and that help 
                companies succeed, such as enhanced standing and 
                prominence, managerial assistance, investment and 
                talent networks, market access, and enhanced access to 
                additional financing. The commitment of the United 
                States to open investment is a cornerstone of our 
                economic policy and provides the United States with 
                substantial benefits. Open global capital flows create 
                valuable economic opportunities and promote 
                competitiveness, innovation, and productivity, and the 
                United States supports cross-border investment, where 
                not inconsistent with the protection of United States 
                national security interests. However, certain United 
                States investments may accelerate and increase the 
                success of the development of sensitive technologies 
                and products in countries that develop them to counter 
                United States and allied capabilities.

                I therefore find that advancement by countries of 
                concern in sensitive technologies and products critical 
                for the military, intelligence, surveillance, or cyber-
                enabled capabilities of such countries constitutes an 
                unusual and extraordinary threat to the national 
                security of the United States, which has its source in 
                whole or substantial part outside the United States, 
                and that certain United States investments risk 
                exacerbating this threat. I hereby declare a national 
                emergency to deal with this threat.

                Accordingly, I hereby order:

[[Page 54868]]

                Section 1. Notifiable and Prohibited Transactions. (a) 
                To assist in addressing the national emergency declared 
                in this order, the Secretary of the Treasury 
                (Secretary), in consultation with the Secretary of 
                Commerce and, as appropriate, the heads of other 
                relevant executive departments and agencies (agencies), 
                shall issue, subject to public notice and comment, 
                regulations that require United States persons to 
                provide notification of information relative to certain 
                transactions involving covered foreign persons 
                (notifiable transactions) and that prohibit United 
                States persons from engaging in certain other 
                transactions involving covered foreign persons 
                (prohibited transactions).

                    (b) The regulations issued under this section shall 
                identify categories of notifiable transactions that 
                involve covered national security technologies and 
                products that the Secretary, in consultation with the 
                Secretary of Commerce and, as appropriate, the heads of 
                other relevant agencies, determines may contribute to 
                the threat to the national security of the United 
                States identified in this order. The regulations shall 
                require United States persons to notify the Department 
                of the Treasury of each such transaction and include 
                relevant information on the transaction in each such 
                notification.
                    (c) The regulations issued under this section shall 
                identify categories of prohibited transactions that 
                involve covered national security technologies and 
                products that the Secretary, in consultation with the 
                Secretary of Commerce and, as appropriate, the heads of 
                other relevant agencies, determines pose a particularly 
                acute national security threat because of their 
                potential to significantly advance the military, 
                intelligence, surveillance, or cyber-enabled 
                capabilities of countries of concern. The regulations 
                shall prohibit United States persons from engaging, 
                directly or indirectly, in such transactions.

                Sec. 2. Duties of the Secretary. In carrying out this 
                order, the Secretary shall, as appropriate:

                    (a) communicate with the Congress and the public 
                with respect to the implementation of this order;
                    (b) consult with the Secretary of Commerce on 
                industry engagement and analysis of notified 
                transactions;
                    (c) consult with the Secretary of State, the 
                Secretary of Defense, the Secretary of Commerce, the 
                Secretary of Energy, and the Director of National 
                Intelligence on the implications for military, 
                intelligence, surveillance, or cyber-enabled 
                capabilities of covered national security technologies 
                and products and potential covered national security 
                technologies and products;
                    (d) engage, together with the Secretary of State 
                and the Secretary of Commerce, with allies and partners 
                regarding the national security risks posed by 
                countries of concern advancing covered national 
                security technologies and products;
                    (e) consult with the Secretary of State on foreign 
                policy considerations related to the implementation of 
                this order, including but not limited to the issuance 
                and amendment of regulations; and
                    (f) investigate, in consultation with the heads of 
                relevant agencies, as appropriate, violations of this 
                order or the regulations issued under this order and 
                pursue available civil penalties for such violations.

                Sec. 3. Program Development. Within 1 year of the 
                effective date of the regulations issued under section 
                1 of this order, the Secretary, in consultation with 
                the Secretary of Commerce and, as appropriate, the 
                heads of other relevant agencies, shall assess whether 
                to amend the regulations, including whether to adjust 
                the definition of ``covered national security 
                technologies and products'' to add or remove 
                technologies and products in the semiconductors and 
                microelectronics, quantum information technologies, and 
                artificial intelligence sectors. The Secretary, in 
                consultation with the Secretary of Commerce and, as 
                appropriate, the heads of other relevant agencies, 
                shall periodically review the effectiveness of the 
                regulations thereafter.

                Sec. 4. Reports to the President. Within 1 year of the 
                effective date of the regulations issued under section 
                1 of this order and, as appropriate

[[Page 54869]]

                but no less than annually thereafter, the Secretary, in 
                coordination with the Secretary of Commerce and in 
                consultation with the heads of other relevant agencies 
                and the Director of the Office of Management and 
                Budget, as appropriate, shall provide the President, 
                through the Assistant to the President for National 
                Security Affairs:

                    (a) to the extent practicable, an assessment of the 
                effectiveness of the measures imposed under this order 
                in addressing threats to the national security of the 
                United States described in this order; advancements by 
                the countries of concern in covered national security 
                technologies and products critical for such countries' 
                military, intelligence, surveillance, or cyber-enabled 
                capabilities; aggregate sector trends evident in 
                notifiable transactions and related capital flows in 
                covered national security technologies and products, 
                drawing on analysis provided by the Secretary of 
                Commerce, the Director of National Intelligence, and 
                the heads of other relevant agencies, as appropriate; 
                and other relevant information obtained through the 
                implementation of this order; and
                    (b) recommendations, as appropriate, regarding:

(i) modifications to this order, including the addition or removal of 
identified sectors or countries of concern, and any other modifications to 
avoid circumvention of this order and enhance its effectiveness; and

(ii) the establishment or expansion of other Federal programs relevant to 
the covered national security technologies and products, including with 
respect to whether any existing legal authorities should be used or new 
action should be taken to address the threat to the national security of 
the United States identified in this order.

                Sec. 5. Reports to the Congress. The Secretary is 
                authorized to submit recurring and final reports to the 
                Congress on the national emergency declared in this 
                order, consistent with section 40l(c) of the NEA (50 
                U.S.C. 1641(c)) and section 204(c) of IEEPA (50 U.S.C. 
                1703(c)).

                Sec. 6. Official United States Government Business. 
                Nothing in this order or the regulations issued under 
                this order shall prohibit transactions for the conduct 
                of the official business of the United States 
                Government by employees, grantees, or contractors 
                thereof.

                Sec. 7. Confidentiality. The regulations issued by the 
                Secretary under this order shall address the 
                confidentiality of information or documentary material 
                submitted pursuant to this order, consistent with 
                applicable law.

                Sec. 8. Additional Notifications and Prohibitions. (a) 
                Any conspiracy formed to violate any regulation issued 
                under this order is prohibited.

                    (b) Subject to the regulations issued under this 
                order, any action that evades or avoids, has the 
                purpose of evading or avoiding, causes a violation of, 
                or attempts to violate any of the prohibitions set 
                forth in this order or any regulation issued under this 
                order is prohibited.
                    (c) In the regulations issued under this order, the 
                Secretary may prohibit United States persons from 
                knowingly directing transactions if such transactions 
                would be prohibited transactions pursuant to this order 
                if engaged in by a United States person.
                    (d) In the regulations issued under this order, the 
                Secretary may require United States persons to:

(i) provide notification to the Department of the Treasury of any 
transaction by a foreign entity controlled by such United States person 
that would be a notifiable transaction if engaged in by a United States 
person; and

(ii) take all reasonable steps to prohibit and prevent any transaction by a 
foreign entity controlled by such United States person that would be a 
prohibited transaction if engaged in by a United States person.

                Sec. 9. Definitions. For purposes of this order:

                    (a) the term ``country of concern'' means a country 
                or territory listed in the Annex to this order that the 
                President has identified to be engaging in a 
                comprehensive, long-term strategy that directs, 
                facilitates, or otherwise

[[Page 54870]]

                supports advancements in sensitive technologies and 
                products that are critical to such country's military, 
                intelligence, surveillance, or cyber-enabled 
                capabilities to counter United States capabilities in a 
                way that threatens the national security of the United 
                States;
                    (b) the term ``covered foreign person'' means a 
                person of a country of concern who or that is engaged 
                in activities, as identified in the regulations issued 
                under this order, involving one or more covered 
                national security technologies and products;
                    (c) the term ``covered national security 
                technologies and products'' means sensitive 
                technologies and products in the semiconductors and 
                microelectronics, quantum information technologies, and 
                artificial intelligence sectors that are critical for 
                the military, intelligence, surveillance, or cyber-
                enabled capabilities of a country of concern, as 
                determined by the Secretary in consultation with the 
                Secretary of Commerce and, as appropriate, the heads of 
                other relevant agencies. Where applicable, ``covered 
                national security technologies and products'' may be 
                limited by reference to certain end-uses of those 
                technologies or products;
                    (d) the term ``entity'' means a partnership, 
                association, trust, joint venture, corporation, group, 
                subgroup, or other organization;
                    (e) the term ``person of a country of concern'' 
                means:

(i) any individual that is not a United States person and is a citizen or 
permanent resident of a country of concern;

(ii) any entity organized under the laws of a country of concern or with a 
principal place of business in a country of concern;

(iii) the government of each country of concern, including any political 
subdivision, political party, agency, or instrumentality thereof, or any 
person owned, controlled, or directed by, or acting for or on behalf of the 
government of such country of concern; or

(iv) any entity owned by a person identified in subsections (e)(i) through 
(e)(iii) of this section;

                    (f) the term ``person'' means an individual or 
                entity;
                    (g) the term ``relevant agencies'' includes the 
                Departments of State, Defense, Justice, Commerce, 
                Energy, and Homeland Security, the Office of the United 
                States Trade Representative, the Office of Science and 
                Technology Policy, the Office of the Director of 
                National Intelligence, the Office of the National Cyber 
                Director, and any other department, agency, or office 
                the Secretary determines appropriate; and
                    (h) the term ``United States person'' means any 
                United States citizen, lawful permanent resident, 
                entity organized under the laws of the United States or 
                any jurisdiction within the United States, including 
                any foreign branches of any such entity, and any person 
                in the United States.

                Sec. 10. General Provisions. (a) The Secretary is 
                authorized to take such actions and to employ all 
                powers granted to the President by IEEPA as may be 
                necessary to carry out the purposes of this order, 
                including to:

(i) promulgate rules and regulations, including elaborating upon the 
definitions contained in section 9 of this order for purposes of the 
regulations issued under this order and further prescribing definitions of 
other terms as necessary to implement this order;

(ii) investigate and make requests for information relative to notifiable 
or prohibited transactions from parties to such transactions or other 
relevant persons at any time, including through the use of civil 
administrative subpoenas as appropriate;

(iii) nullify, void, or otherwise compel the divestment of any prohibited 
transaction entered into after the effective date of the regulations issued 
under this order; and

(iv) refer potential criminal violations of this order or the regulations 
issued under this order to the Attorney General.

[[Page 54871]]

                    (b) Notwithstanding any other provision of this 
                order, the Secretary is authorized to exempt from 
                applicable prohibitions or notification requirements 
                any transaction or transactions determined by the 
                Secretary, in consultation with the heads of relevant 
                agencies, as appropriate, to be in the national 
                interest of the United States.
                    (c) To the extent consistent with applicable law, 
                the Secretary may redelegate any functions authorized 
                hereunder within the Department of the Treasury. All 
                agencies of the United States Government shall take all 
                appropriate measures within their authority to carry 
                out the provisions of this order.
                    (d) If any provision of this order, or the 
                application of any provision of this order to any 
                person or circumstance, is held to be invalid, the 
                remainder of this order and its application to any 
                other person or circumstance shall not be affected 
                thereby.
                    (e) Nothing in this order shall be construed to 
                impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or 
the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget 
relating to budgetary, administrative, or legislative proposals.

                    (f) This order shall be implemented consistent with 
                applicable law and subject to the availability of 
                appropriations.
                    (g) This order is not intended to, and does not, 
                create any right or benefit, substantive or procedural, 
                enforceable at law or in equity by any party against 
                the United States, its departments, agencies, or 
                entities, its officers, employees, or agents, or any 
                other person.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    August 9, 2023.

Billing code 3395-F3-P



[[Page 54872]]

[GRAPHIC] [TIFF OMITTED] TD11AU23.025


[FR Doc. 2023-17449
Filed 8-10-23; 11:15 a.m.]
Billing code 3395-F3-C