ICTS Supply Chain Security Act of 2026
- Sponsor
- Sen. Scott, Tim [R-SC]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jun 24, 2026
Bottom line
The bill significantly expands the Commerce Department's authority to restrict ICTS transactions with foreign adversaries, aiming to protect U.S. digital infrastructure and national security.
What it actually does
This bill, the "ICTS Supply Chain Security Act of 2026," amends the Export Control Reform Act of 2018 to establish new governmental structures and authorities aimed at securing information and communications technology and services (ICTS) supply chains. It creates an Assistant Secretary of Commerce for ICTS Supply Chains and an Office of Information and Communications Technology and Services within the Bureau of Industry and Security. The core of the bill prohibits transactions involving ICTS designed, developed, manufactured, or supplied by entities from "countries of concern" (e.g., China, Russia, Iran, North Korea, Cuba) if such transactions pose undue risks to U.S. national security, critical infrastructure, or the digital economy.
Proponents argue
Supporters argue that the bill is crucial for safeguarding U.S. national security by preventing foreign adversaries from exploiting vulnerabilities in critical ICTS supply chains. They contend that it provides a necessary legal framework to address evolving threats from countries of concern, streamline existing executive orders, and ensure a robust defense against sabotage and subversion of U.S. digital infrastructure.
Opponents contend
Critics might argue that such broad prohibitions could stifle innovation, increase costs for U.S. businesses, and potentially lead to unintended consequences for global supply chains. Concerns could also be raised about the potential for overreach by the executive branch and the impact on international trade relations, particularly with countries that are both economic partners and designated "countries of concern."
The bill is moderately complex but concise, allowing an informed reader to grasp its core provisions within a reasonable timeframe, likely less than an hour.
Section 2, amending Part III of the Export Control Reform Act of 2018
Establishment of Assistant Secretary for ICTS Supply Chains
This section mandates the President to appoint, with Senate consent, an Assistant Secretary of Commerce specifically for Information and Communications Technology Supply Chains. This new Assistant Secretary will report to the Under Secretary of Commerce for Industry and Security and be responsible for overseeing the newly established Office of Information and Communications Technology and Services.
Supporters argue
Supporters argue this creates dedicated leadership and focus within the Commerce Department to address complex and rapidly evolving ICTS supply chain threats, ensuring a more coordinated and effective national security posture.
Critics contend
No specific opposition is typically raised against the creation of a new Assistant Secretary position in principle, though concerns about bureaucratic expansion or specific appointees might arise.
Tradeoffs
Balances the need for specialized expertise and dedicated leadership against potential bureaucratic expansion or overlap with existing roles.
Section 3, amending Part III of the Export Control Reform Act of 2018
Establishment of the Office of ICTS and Congressional Information Access
This section requires the Secretary of Commerce to establish an Office of Information and Communications Technology and Services (the "Office") within the Bureau of Industry and Security. This Office will administer the new Part IV of the Act and carry out other assigned duties. It also mandates that any information obtained by the Office be made available to appropriate congressional committees upon request, with strict rules against further disclosure of confidential information.
Section 4, new Part IV, Section 1785A
Prohibition of Covered ICTS Transactions from Countries of Concern
This is a central provision, prohibiting any acquisition, importation, transfer, installation, dealing in, or use of ICTS by any person or property subject to U.S. jurisdiction if the Secretary of Commerce, in consultation with other agencies, determines the transaction involves ICTS from a "country of concern" (China, Russia, Iran, North Korea, Cuba) AND poses an undue risk of sabotage, catastrophic effects on critical infrastructure/digital economy, or an unacceptable risk to national security or U.S. persons' safety.
Section 4, new Part IV, Section 1785A(c) and (d)
Exemptions for Expressive Materials and Open-Source Software
This provision carves out specific exceptions from the general prohibition. It clarifies that the prohibition does not apply to expressive materials (like publications, films, digital content, social media posts) or to transactions specifically intended to provide public access to open-source software. This ensures that the act does not inadvertently restrict free speech or the widespread use of open-source technologies.
Section 4, new Part IV, Sections 1785B and 1785C
Regulatory Authority and Mitigation Measures
These sections grant the Secretary of Commerce broad authority to prescribe regulations to implement the prohibitions, identify specific transactions or parties that pose risks, impose mitigation measures, establish criteria for inclusion/exclusion, and authorize or license otherwise prohibited transactions. The head of the new Office of ICTS will administer this part, including designing and negotiating mitigation measures.
Section 4, new Part IV, Section 1785D
Exclusive Judicial Review in D.C. Circuit
This section establishes that any legal challenge to the new Part IV or any final action under it can only be filed in the U.S. Court of Appeals for the District of Columbia Circuit. It also specifies that sensitive security information, law enforcement records, and classified information can be submitted to the court ex parte and in camera (without being shared with the claimant or public), and that the court's determination is the exclusive judicial remedy.
Section 4, new Part IV, Section 1785E
Criminal and Civil Penalties for Violations
This section outlines severe penalties for violating the act or any regulations issued under it. Willful violations can result in criminal fines up to $1,000,000 and imprisonment for up to 20 years for individuals. Civil penalties can include fines of up to $1,500,000 or five times the transaction value, revocation of mitigation measures, and restrictions on engaging in future ICTS transactions.
Section 4, new Part IV, Sections 1785F and 1785I
Coordination with Existing Authorities and Sunset Clause
This section clarifies that the new Part IV does not alter other federal authorities (like CFIUS or the Defense Production Act) and specifies that certain administrative procedures (APA, Paperwork Reduction Act) do not apply. It also explicitly states that existing regulations under Executive Orders 13873 and 14034 remain in effect. A sunset clause terminates the prohibition and authorities after 5 years.
This provision mandates that any legal challenge to the act or its actions must be filed exclusively in the D.C. Circuit Court of Appeals. Crucially, it allows for sensitive security, law enforcement, and classified information to be submitted to the court ex parte and in camera, meaning the challenging party and the public will not have access to this information, and it cannot be released.
Section 4, new Part IV, Section 1785D
Why it matters:This is standard legislative practice for national security measures, aiming to protect classified information and streamline challenges to government actions in sensitive areas. However, it can also be seen as limiting judicial transparency and due process.
Case for: Proponents argue that protecting classified national security information is paramount, and allowing ex parte and in camera review is the only way to adjudicate these cases without compromising intelligence sources and methods. Centralizing review in the D.C. Circuit ensures judicial expertise.
Case against: Opponents contend that denying affected parties access to the evidence used to justify prohibitions against them fundamentally undermines due process and the ability to mount an effective legal defense, potentially leading to arbitrary government actions.
Estimated impact: High impact on the legal rights and remedies available to individuals and entities targeted by the prohibitions, potentially setting a precedent for future national security litigation.
This provision explicitly states that functions exercised under this new Part IV are not subject to the Administrative Procedure Act (APA) (sections 551, 553-559, and 701-706 of title 5, U.S. Code) or the Paperwork Reduction Act (chapter 35 of title 44, U.S. Code), except for civil penalties.
Section 4, new Part IV, Section 1785F(b) and (c)
Why it matters:This is a common legislative technique for national security or emergency powers, intended to allow the executive branch to act quickly and with less bureaucratic overhead. It can be seen as necessary for agility but also as reducing transparency and public accountability.
Case for: Proponents argue that exempting these functions from standard administrative procedures allows the Commerce Department to respond rapidly and flexibly to fast-evolving national security threats in the ICTS space without being bogged down by lengthy public comment periods or extensive paperwork requirements.
Case against: Opponents would argue that bypassing the APA removes crucial safeguards for public participation, transparency, and judicial review of agency actions, potentially leading to arbitrary or poorly considered regulations. Exempting the Paperwork Reduction Act could lead to increased burdens on businesses without proper oversight.
Estimated impact: High impact on regulatory transparency, public engagement, and potential compliance burdens for businesses.