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BIS Issues Rule Barring Import & Sale of Certain Connected Vehicle Technologies with Sufficient Ties to China or Russia

Washington, D.C. (January 23, 2025) – On January 16, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published a final rule (the “Final Rule”) that will prohibit the import and sale of certain connected vehicle technologies with a sufficient nexus to the People’s Republic of China or the Russian Federation, on the grounds that they pose a risk to national security by potentially enabling data extraction or remote manipulation of vehicles.

Specifically, the Final Rule will prohibit importation of vehicle connectivity systems (“VSC”) hardware, importation and sale of VSC and automated driving systems (“ADS”) software, and importation of completed connected vehicles containing covered software, if they are owned by, controlled by, or subject to the jurisdiction or direction the People’s Republic of China, including the Hong Kong and Macau Special Administrative Regions, or the Russian Federation. It will also prohibit the sale of connected vehicles with prohibited VCS hardware or software – even if manufactured domestically – as well as the provision of commercial services using completed connected vehicles with ADS software. The Final Rule will only apply to connected passenger vehicles weighing 10,000 pounds or less.

Certain importers or manufacturers will be required to submit declarations of conformity to BIS containing information set forth in the Final Rule, for purposes of establishing compliance with the Final Rule. The Final Rule contains strict requirements concerning deadlines for submission, modification, reliance on third-party assessments, annual updates, and more. BIS is authorized to penalize persons who knowingly submit false information in connection with declarations of conformity or engage in prohibited transactions.

The Final Rule, which will become effective March 17, 2025 and commence at 15 C.F.R. § 791.300, follows BIS’s notice of proposed rulemaking of September 26, 2024 and advance notice of proposed rulemaking of March 1, 2024, and is implemented under Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain.”

Lewis Brisbois’s attorneys are actively engaged in the wide range of legal issues in this area and are advising clients on managing legal and business risk as events continue to develop at an accelerated pace. For more information, contact the author or editor of this alert, and visit our Ukraine Conflict, International Trade, Export, Import and Investment Controls & National Security Practice page for additional alerts in this area.

Author:

Griffen J. Thorne, Partner

Editor:

Andrew Pidgirsky, Partner & Chair of Ukraine Conflict, International Trade, Import, Export and Investment Controls & National Security Practice

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