US BIS to propose rule for securing connected vehicle supply chains

The Bureau of Industry and Security (BIS) of the US Department of Commerce has introduced a Notice of Proposed Rulemaking to address national security risks associated with the connected vehicle supply chain, particularly concerning foreign adversaries such as China and Russia. Building on Executive Order 13873, which focuses on securing the US information and communications technology supply chain, the proposed rule outlines three main categories of prohibited transactions.

First is importing vehicle connectivity system (VCS) hardware from entities owned or controlled by China or Russia. Second, the sale of completed connected vehicles that incorporate software developed by these foreign adversaries and third, restrictions on manufacturers linked to these countries from selling connected vehicles.

Additionally, the rule mandates compliance mechanisms, including mandatory annual Declarations of Conformity certifying adherence to regulations and general and specific authorisations for certain otherwise prohibited transactions. Furthermore, it imposes recordkeeping requirements that necessitate maintaining documentation related to compliance declarations for ten years.

Notably, prohibitions on software are set to take effect for the model year 2027, while hardware prohibitions will begin in 2030. In addition, violations of the proposed rule may incur significant penalties, with civil fines reaching up to $368,136 and criminal penalties as high as $1 million. The regulatory framework reflects the US government’s commitment to safeguarding national security by regulating the import and sale of connected vehicle systems tied to foreign adversaries.

Why does it matter?

Consequently, it underscores the importance of compliance for stakeholders in the automotive and technology sectors, highlighting the need for vigilance in navigating these new regulatory challenges.