BACKGROUND PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON COMMUNICATIONS INFRASTRUCTURE SECURITY
Via Teleconference
4:48 P.M. EDT
PRESS OFFICER: Good afternoon, and thank you to all of you for joining this call today. I know it was on short notice. We appreciate your work to get on. And we're having a background call today on the executive order, "Securing the Information and Communications Technology and Services Supply Chain," which was just signed and released today by the President.
This call will be on background to a senior administration official. Not for reporting, but just for your knowledge, we will have [senior administration official] and [senior administration official] on the call.
We will be taking a few questions after the call. There will not be follow-up after the questions. And we apologize in advance that today's call will be short. With that, I'm going to go ahead and pass this over to [senior administration official] to tell you about the executive order that was just released. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Hey, folks. The President is committed to protecting the security of the nation and made that clear today when he signed this executive order that he's willing to do what it takes to keep America safe.
This is one of the promises that he made during the campaign and he has most certainly kept it today. What the EO addresses is the fact that our information and communications infrastructure is literally foundational to the American way of life and that our prosperity and our security depend on how we balance economic benefit with security risks.
Today, the President determined that the unrestricted acquisition or use in the United States of information and communications technology or services that are subject to the jurisdiction or direction of foreign adversaries augments the ability of those foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, and that that can have potentially catastrophic effects and thereby constitutes an unusual and extraordinary risk to our national security, foreign policy, and economy.
The President is incredibly committed to preventing our adversaries from turning our own information and communications infrastructure into a liability as opposed to an asset.
The executive order addresses this imperative by empowering the Secretary of Commerce to prohibit transactions involving information and communications technology or services that are designed, developed, manufactured, or supplied by persons owned by or controlled by, or subject to the jurisdiction or direction of a foreign adversary. And further, one, pose an undue risk of sabotage or subversion to our information and communications technology and services. Two, pose an undue risk of catastrophic effects on the security or resilience of our critical infrastructure in the digital economy. Or three, otherwise pose an unacceptable risk to the national security of the United States or the security and safety of U.S. persons.
This act keeps President Trump's promise to protect the national security, economy, and critical infrastructure of our nation and confronts long-term challenges caused by adversaries exploiting the evolution of technology and services we depend on.
With that, I'll take some questions.
PRESS OFFICER: Excellent. Thank you so much. We're going to ahead and take a couple of questions today. Again, this is on background to a senior administration official and there will not be follow up. We'll go ahead and push it back to the moderator to go and ahead and get the question and answer started. Thank you.
Q Thanks for doing this call. My name is Kristina Anderson. I’m with AWPS News. So my question is: Will this executive order have application retroactively to equipment and so forth, which is already installed, and to any contracts in the pipeline for acquisition and so forth?
And if so, do you anticipate this might be somewhat disruptive? And are there provisions for dealing with that potential disruption? Or maybe you think there’s not going to be a disruption.
Anyway, those are my questions. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Hi, Kristina. Thanks for your question. So the Department of Commerce is going to take 150 days to write the rules pursuant to this executive order. And it applies to any transaction initiated, pending or completed, after the date of the executive order, which is today.
Q Thanks. It’s Dan Raviv of i24 News. Keeping in mind that we’re not saying who you are, you officials, is it fair to say that you mainly have in mind Chinese companies and, specifically, Huawei?
SENIOR ADMINISTRATION OFFICIAL: Yeah, hi, Dan. The executive order is company and country agnostic. And I would further add that it’s directed at any transaction involving information and communications technology or services, and controlled by or subject to the jurisdiction of a foreign adversary that meet criteria enumerated in the executive order.
Regulations issued by the Department of Commerce over -- in the coming days will detail how determinations will be made on whether a transaction meets the criteria listed in the executive order.
Q Hey, thanks for doing this call. John Fredericks, John Fredericks Radio Network. So just a few moments ago, Lindsey Graham, over at the Senate -- Chairman of the Judiciary Committee -- said that this basically was aimed at protecting telecoms services as it relates to China and Huawei. Even though you said it’s not country specific, you’ve already got a senator saying that it was targeted for that. So how do you respond to that?
SENIOR ADMINISTRATION OFFICIAL: Yeah, thanks, John. We’re obviously concerned about all threats to the safety and security of Americans and the American people. But like we said, the executive order is company and country agnostic. And so it’s meant to be forward-looking for an industry that is transformative -- telecommunications.
Q Thanks for having the call. This is Dave Shepardson from Reuters. Two quick questions. Can you tell us why it took so long to finalize this order, which was under review for more than a year?
And back on China and Huawei for a second. I mean, the U.S. government has declared Huawei a threat to U.S. national security -- both Congress, the FCC Chairman. So why shouldn’t we presume that this order would apply to Huawei (inaudible)? (Inaudible) government, in various forms, has already declared Huawei a threat and is actively lobbying U.S. allies not to use their equipment and 5G networks.
PRESS OFFICER: Hi, David. I think my colleague has covered that second question, but he can definitely (inaudible) your first.
SENIOR ADMINISTRATION OFFICIAL: Hey, Dave. Thanks for the question. In terms of timing, I can just tell you, as a -- you know, as a senior director on the National Security Council, these things just take time. And, you know, the document was recently ready for presidential signature, and it just so happens that now is that time.
Q Hi. Demetri from the Financial Times. For the purposes of this order, when you say “foreign adversary,” do you classify China as a foreign adversary? Is that part of the definition?
And then, separately, there are some telecom companies that also have solar businesses that involve telecom components. Would they also be impacted by this order?
SENIOR ADMINISTRATION OFFICIAL: Yeah, Demetri, thanks for your question. Look, the next 150 days are going to be incredibly important in terms of working out how the executive order will function in the system. And, you know, the President has obviously signed this executive order and is confident that the Secretary of Commerce is going to execute it well and faithfully. And I would just allow that process to play itself out. And that will, again, further provide details in terms of how this thing is going to work.
Q Hello. Hi, this is Rick Weber at Inside Cybersecurity. The Department of Homeland Security has a taskforce on information technology supply chain security. How do you envision what the task force is already working on, weighing into the requirements or the implementation of the order?
SENIOR ADMINISTRATION OFFICIAL: Yeah. Hey, Rick. So that task that the Department of Homeland Security is engaged in right now is about federal procurement and some broader issues as well. Obviously, the Department of Homeland Security has a lot of equities when it comes to security of critical infrastructure. And the executive order talks about how the various departments and agencies are going to play in terms of securing our next generation telecommunications infrastructure.
Q Hi, there. Thanks so much for doing the call. Nick Schifrin from PBS NewsHour. If you can't describe the country or the companies that this is aimed at, can you just describe the threat itself -- what you actually think these companies, controlled by an foreign adversary, posing an undue risk to sabotage or subversion, as you put it in the letter to Congress -- can you actually describe what the threat is and whether companies that you believe are already posing that threat to U.S. infrastructure? Thanks.
SENIOR ADMINISTRATION OFFICIAL: Yeah, Nick. Thanks for the question. It's, I think, a really important one. I would just say that telecommunications continue to transform our world and the way that nearly everything within it happens for American citizens, as well as the United States government, for our economy. And that change, as it occurs, is not slowing down.
And so in terms of the broad, sort of, threat landscape that we believe exists, again, what the President is trying to do in this executive order is just make sure that he can continue to execute his solemn duty as pledged to the American people, which is defend them against all enemies. And, obviously, there are enormous threats that could be posed by the exploitation of these types of technologies.
This executive order is designed to equip the various aspects of the United States government with the ability to address them and continue protecting the American people.
Q Yeah. This is Alex Lawson from Law360. I just wanted to know -- you said the rules would be sort of written over 150 days. Have you reached out to any businesses -- the private sector who deals in this area -- about what would be the best steps? That's quite a long time to sort of be in rule-writing limbo about how they should handle transactions that are either in the pipeline. Or what exactly should be the best practices here in this time while the rules are being written?
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration official] with the Department of Commerce. The Secretary and the Department are going to issue interim regulations within that 150 days that you mentioned. And we'll be laying forth, sort of, the implementing guidelines and the rationale that will be used as the Secretary makes determinations under the executive order.
The regulations will be effective when he issues those interim regs, but we'll also be soliciting comment, and so we will welcome input from industry and we'll be coordinating closely with them as we work towards more final rules down the road to implement this order.
Q Hi. Dave (inaudible). Thanks so much for taking my call. Can you discuss any potential penalties you envision this executive order carrying for the people who would contravene it?
SENIOR ADMINISTRATION OFFICIAL: Well, the executive order speaks for itself on that. It gives the Secretary the ability to prohibit transactions that are detailed in the executive order. So it would be the ability to prohibit transactions as it's defined in the executive order.
Q Hi there. This is Brian Fung from CNN. Wondering if you can talk a little bit about whether or not, you know, small (inaudible) carriers who have gear that could fall under this EO will be required to rip that out, and whether they're going to bear the costs of replacing it or if the White House anticipates diverting some funds to subsidize that operation.
SENIOR ADMINISTRATION OFFICIAL: Thanks for the question. This is the Department of Commerce again. As we put out these interim regs and we solicit comment and feedback, we don't anticipate providing informal guidance regarding particular sectors or transactions before that 150 days is expired. And so it will be a very iterative process and open and transparent process with the community and stakeholders at large as we build towards that final rule.
Q Hi, Todd Shields with Bloomberg News. I'm a little confused about when these take effect. One of the speakers, a few moments ago, said something about interim regulations and when those are issued this EO takes effect. Is that accurate? And how long will take to do the interim regulations, if that is accurate? Thank you.
SENIOR ADMINISTRATION OFFICIAL: Right. So the executive order is obviously effective as of today, the date the President signed it. What will be determined in the future is how it will be implemented, and that's what the interim regulations, as well as the later regulations that we will build from public comment and feedback, will aim at outlining.
PRESS OFFICER: Excellent. We'll take one last one question.
OPERATOR: Actually, we have currently no more questions in the queue.
PRESS OFFICER: Excellent. Well, thank you again to everyone for your time today and for getting on the call so quickly. As a reminder, this is on background as senior administration official. With that, we will conclude the call.
END 5:07 P.M. EDT
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