Republican Senators Tim Scott and Bill Hagerty have introduced a bill aimed at protecting American information and communication technology supply chains. The legislation amends the Export Control Reform Act of 2018.

This initiative expands the powers of the U.S. Department of Commerce, allowing it to prohibit transactions involving technologies and services developed, produced, or supplied by entities linked to risk countries if they pose a threat to critical infrastructure, the digital economy, or U.S. national security.

“Americans should not worry that China or Russia could use technology in our cars, phones, or networks against us,” Scott stated.

What the Bill Proposes

In a press release, the Senate referred to the initiative as the ICTS Supply Chain Security Act. According to the document, the Department of Commerce will be able to prohibit or restrict transactions involving technologies and services if they:

  • are developed, produced, or supplied by entities linked to risk countries;
  • create a risk of sabotage or disruption of information and communication systems in the U.S.;
  • could lead to catastrophic consequences for critical infrastructure or the digital economy;
  • pose an unacceptable risk to U.S. national security.

The authors of the initiative have identified risk countries as China (including Hong Kong and Macau), Cuba, Iran, North Korea, and Russia.

The bill includes exceptions for informational materials, meaning restrictions will not apply to publications, films, podcasts, social media posts, blogs, online news, and other electronic materials. Additionally, the document protects access to open-source software.

The initiative does not revoke the powers of the Committee on Foreign Investment in the United States (CFIUS), which separately reviews transactions involving foreign investors for national security risks.

Liability for Violations

The bill establishes civil and criminal liability for violating the prohibitions or directives of the Department of Commerce.

For intentional violations, individuals could face fines of up to $1 million and up to 20 years in prison. Civil penalties could be the greater of $1.5 million or five times the value of the transaction that led to the violation.

The Department of Commerce will also have the authority to revoke previously issued licenses and limit the violator's participation in transactions involving information and communication technologies and services.

On June 2, U.S. President Donald Trump signed an executive order promoting innovation and security in AI. The document emphasizes protecting American technologies and intellectual property from exploitation and theft by risk countries.

Following this, it was reported that export restrictions were imposed on Anthropic after the release of two versions of the Claude model family. Media linked this decision to a potential connection between a China-related group and the Mythos model.

Notably, on June 24, the founder of 360 Security Technology, Zhou Hongyi, introduced an AI tool for automatically identifying vulnerabilities, Tulong Feng, which he described as China's response to Anthropic's Mythos 5.