Treasury Reissues Rules to Enforce Cyber Sanctions on Foreign Adversaries  

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The rules could apply to any new executive order related to the national security emergency President Obama declared in 2015, in advance of a cybersecurity agreement with China.

The Treasury Department’s Office of Foreign Assets Control is adding new general licenses to the rules that determine whether they issue sanctions for undermining cybersecurity. 

“OFAC is adding three new general licenses to the regulations: a general license authorizing the investment and reinvestment of certain funds … a general license authorizing the official business of the U.S. government … and a general license authorizing certain official business of international entities and organizations,” reads a notice published in the Federal Register Tuesday.  

The rules were first published to implement President Barack Obama’s April 2015 executive order approving sanctions for malicious cyber activity. They are being reissued to account for subsequent related orders and laws regarding cybersecurity threats from foreign adversaries, including Russia.

The original executive order does not specifically mention China, but was a precursor to an agreement between Obama and China’s Xi Jinping, on what sorts of cyber activity—theft of intellectual property, for example—should be off limits. In 2020, President Donald Trump invoked the same emergency powers to issue Executive Order 13959: “Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies.” 

The revamped rules, which include key definitions—for terms such as “significant activities undermining cybersecurity,” for example—come as the executive branch again aims to appear tough on China. The U.S. recently banned chipmaker NVIDIA from exporting goods there—barring a special license—and the administration is reportedly considering other related executive orders, including one that would curtail U.S. investments to Chinese entities.   

According to the Federal Register notice, the regulations will apply to the implementation of sanctions under current U.S. policy, “as well as sanctions that may be set forth in any future executive orders issued pursuant to the national emergency declared in E.O. 13694.”