Biden eyes new ways to bar China from scooping up U.S. data
12/05/2022 10:13
(Adds Chinese foreign ministry comment)
By Alexandra Alper and Karen Freifeld
WASHINGTON, May 12 (Reuters) - The Biden administration has
drafted an executive order that would give the Department of
Justice vast powers to stop foreign adversaries like China
accessing Americans' personal data, according to a person
familiar with the matter and excerpts seen by Reuters.
The proposal, which is being reviewed by government
agencies, would also direct the Department of Health and Human
Services (HHS) to prevent federal funding from supporting the
transfer of U.S. health data to foreign adversaries, according
to the excerpts.
The draft order reflects an effort by the administration to
respond more aggressively to national security threats allegedly
posed by Chinese companies that acquire reams of U.S. personal
data, after failed bids by the Trump administration to bar
Americans from using popular social media platforms TikTok and
Wechat.
Former President Donald Trump tried to ban the apps in 2020
alleging data collected by them could be given to Beijing and
used to track users and censor content. China and the apps have
denied any improper use of U.S. data.
But the courts halted implementation of the bans and U.S.
President Joe Biden eventually revoked them.
Spokespeople for the White House, the Department of Justice
and the Commerce Department declined to comment. HHS did not
respond to requests for comment.
The document is an initial draft that does not include input
from government agencies and may change, according to another
person familiar with the matter.
Asked about the proposal at a press briefing on Thursday,
Chinese foreign ministry spokesman Zhao Lijian said that while
China believed each country had the right to take measures to
protect the personal data and privacy of its citizens, relevant
initiatives should be "reasonable and scientific".
They "should not be relegated as a tool for individual
countries to over-generalise the concept of national security,
abuse national power, and unreasonably suppress specific
countries and enterprises", he said.
Samm Sacks, a senior fellow at Yale Law School's Paul Tsai
China Center who examines information and communications
policies, said the U.S. was trying to decide how to deal with
the issue.
"What’s clear is the Biden administration is grappling with
how to address this new risk frontier in the U.S.-China
relationship, which is the Chinese government’s access to
Americans’ sensitive data," Sacks said.
If implemented, the draft order would grant U.S. Attorney
General Merrick Garland the authority to review and potentially
bar commercial transactions involving the sale of or access to
data if they pose an undue risk to national security, one of the
people said.
The proposal would also instruct HHS to get started on
writing a rule "to ensure that federal assistance, such as
grants and awards, is not supporting the transfer of U.S.
persons' health, health-related or biological data...to entities
owned by, controlled by, or subject to the jurisdiction or
direction of foreign adversaries," according to an excerpt.
PERSONAL DATA
U.S. intelligence has warned about the risks posed by
Chinese companies collecting Americans' personal data by
investing in U.S. firms that handle sensitive healthcare
information. China's BGI purchased U.S. genomic sequencing firm
Complete Genomics in 2013 and in 2015, Chinese WuXi Pharma Tech
acquired U.S. firm NextCODE Health, the National
Counterintelligence and Security Center noted in a 2021 fact
sheet https://www.dni.gov/files/NCSC/documents/SafeguardingOurFuture/NCSC_China_Genomics_Fact_Sheet_2021revision20210203.pdf.
The draft order comes as administration officials have grown
frustrated with the Commerce Department over delays in rolling
out rules and investigating threats under similar powers granted
to that department by Trump in 2019, according to three people
familiar with the process.
Those powers allow the Commerce Department to ban or
restrict transactions between U.S. firms and internet, telecom
and tech companies from "foreign adversary" nations, including
Russia and China.
But so far, the department has failed to publish
long-awaited rules fleshing out a safe harbor process for
companies or announce the results of investigations into firms
including Russia's Kaspersky and China's Alibaba, as previously
reported by Reuters.
The Commerce Department was also explicitly directed by a
June executive order to use the new tools to protect Americans'
sensitive data from foreign adversaries via transactions
involving apps, but has not made public any progress related to
the measure.
The new draft order gives the Department of Justice the
express authority to "monitor compliance with and enforce any
prohibitions, licenses, or mitigation agreements" issued under
the prior executive orders, "thereby supporting the authority
given to the Secretary of Commerce."
It also tasks the Secretary of Commerce with establishing
which classes of transactions are outright prohibited and which
are exempt, another excerpt shows.
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Chinese apps could face subpoenas or bans under Biden order
-sources urn:newsml:reuters.com:*:nL2N2O000Z
Prenatal test developed with Chinese military stores gene
data urn:newsml:reuters.com:*:nL3N2OJ2ZF
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(Reporting by Alexandra Alper and Karen Freifeld; Additional
reporting by Yew Lun Tian in Beijing; Editing by Chris Sanders,
Alistair Bell and Ed Osmond)
((Alexandra.Alper@thomsonreuters.com; +1(202)354-5865; Reuters
Messaging: alexandra.alper.thomsonreuters.com@reuters.net - https://twitter.com/alexalper?lang=en))