The RESTRICT Act: What it is and What it Means for National Security and Technology

In recent years, the United States has become increasingly concerned about the national security implications of foreign technology companies, particularly those with ties to adversarial nations like China and Russia. As a result, there has been a push in Congress to address this issue through legislation. One such bill is the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act.

What is the RESTRICT Act?

The RESTRICT Act is a bipartisan bill introduced in the U.S. Senate by Senators Mark Warner (D-VA) and John Thune (R-SD) aimed at addressing the national security risks posed by technology from foreign adversaries. The bill would empower the Department of Commerce to review, prevent, and mitigate information and communications technology transactions that pose undue risk to national security. It would establish a risk-based process, tailored to the rapidly changing technology and threat environment, by directing the Department of Commerce to identify and mitigate foreign threats to information and communications technology products and services.

The RESTRICT Act would require the Secretary of Commerce to establish procedures to identify, deter, disrupt, prevent, prohibit, and mitigate transactions involving information and communications technology products in which any foreign adversary has any interest and when such technology poses an undue or unacceptable risk to national security.

It would prioritize the evaluation of Information and Communication Technology (ICT) products used in critical infrastructure, integral to telecommunications products, or pertaining to a range of defined emerging, foundational, and disruptive technologies with serious national security implications. The bill would also ensure comprehensive actions to address risks of untrusted foreign ICT by requiring the Secretary to take up consideration of concerning activity identified by other US government entities.

Finally, the RESTRICT Act would educate the public and business community about the threat by requiring the Secretary of Commerce to coordinate with the Director of National Intelligence to provide declassified information on how transactions denied or otherwise mitigated posed an undue or unacceptable risk.

Pros and Cons:

Pros:

• The RESTRICT Act would empower the Department of Commerce to better address the national security risks posed by technology from foreign adversaries, particularly those with ties to adversarial nations like China and Russia.
• The bill would establish a risk-based process, tailored to the rapidly changing technology and threat environment, to identify and mitigate foreign threats to information and communications technology products and services.
• By prioritizing the evaluation of ICT products used in critical infrastructure and telecommunications products, the bill would better protect the nation’s infrastructure from potential attacks.
• The RESTRICT Act would educate the public and business community about the national security risks posed by foreign technology companies, helping to raise awareness and encourage better decision-making.

Cons:

• The RESTRICT Act could lead to increased regulation of the technology sector, potentially stifling innovation and economic growth.
• The bill could be seen as discriminatory against foreign companies, particularly those from China, and could lead to retaliation from those countries.
• The RESTRICT Act may not be sufficient to address all national security risks posed by foreign technology companies, particularly given the rapidly changing nature of the threat environment.
• The bill could be difficult to enforce, particularly given the global nature of the technology industry and the ease with which companies can move operations to other countries.

What does this mean for TikTok?

As one of the most prominent foreign technology companies operating in the United States, TikTok has been a major focus of the national security concerns that have led to the introduction of the RESTRICT Act. The app, which is owned by Chinese company ByteDance, has been the subject of scrutiny over its data privacy practices and its potential ties to the Chinese government. While the RESTRICT Act does not specifically target TikTok, it would give the Department of Commerce broader powers to regulate and potentially block transactions involving the app. There are many others including Huawei and DJI technology that the act is targeted at.

Proponents of the RESTRICT Act argue that it is necessary to address the ongoing threat posed by technology from foreign adversaries, particularly China, Russia, and North Korea. They believe that untrusted vendors from these countries pose serious risks to the nation’s economic and national security, and that the current approach of disjointed efforts from individual agencies is insufficient. The RESTRICT Act would establish a risk-based process to identify and mitigate these threats, empowering the Department of Commerce to review, prevent, and mitigate transactions involving foreign ICT products that pose undue risk.

However, opponents argue that the bill could lead to unintended consequences and harm U.S. companies that rely on global supply chains. They also express concern about the potential impact on consumer choice, arguing that banning popular apps like TikTok could be seen as an attack on free speech and the open internet. Additionally, they argue that the bill could be used as a tool for protectionism and to stifle competition from foreign companies.

Ultimately, the fate of the RESTRICT Act remains to be seen. While it has gained bipartisan support and the endorsement of the White House, it still needs to make its way through both chambers of Congress before being signed into law by President Biden. In the meantime, the battle between TikTok and its opponents continues, with the app fighting to maintain its presence in the U.S. market and prove its commitment to user privacy and security. The upcoming testimony of TikTok’s CEO to Congress may shed further light on the company’s efforts and its future prospects in the U.S.