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[Federal Register Volume 90, Number 2 (Friday, January 3, 2025)]
[Proposed Rules]
[Pages 271-279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30209]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 791

[Docket No. 241213-0327]
RIN 0694-AJ72

Securing the Information and Communications Technology and 
Services Supply Chain: Unmanned Aircraft Systems

AGENCY: Bureau of Industry and Security, U.S. Department of Commerce.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: In this advance notice of proposed rulemaking (ANPRM), the 
Department of Commerce's Bureau of Industry and Security (BIS) seeks 
public comment on issues related to transactions involving information 
and communications technology and services (ICTS) that are designed, 
developed, manufactured, or supplied by persons owned by, controlled 
by, or subject to the jurisdiction or direction of foreign adversaries, 
pursuant to Executive Order (E.O.) 13873, ``Securing the Information 
and Communications Technology and Services Supply Chain,'' and that are 
integral to unmanned aircraft systems (UAS). This ANPRM will assist BIS 
in determining the technologies and market participants that may be 
appropriate for regulation in order to address undue or unacceptable 
risks to U.S. national security, including U.S. ICTS supply chains and 
critical infrastructure, or/and

[[Page 272]]

to the security and safety of U.S. persons.

DATES: Comments must be received on or before March 4, 2025.

ADDRESSES: All comments must be submitted by one of the following 
methods:
     The Federal eRulemaking Portal: https://www.regulations.gov at docket number BIS-2024-0058.
     Email directly to: [email protected]. 
Include ``RIN 0694-AJ72'' in the subject line.
     Instructions: Comments sent by any other method, to any 
other address or individual, or received after the end of the comment 
period, may not be considered. For those seeking to submit business 
confidential information (BCI), please clearly mark such submissions as 
BCI and submit by email, as instructed above. Each BCI submission must 
also contain a summary of the BCI, clearly marked as public, in 
sufficient detail to permit a reasonable understanding of the substance 
of the information for public consumption. Such summary information 
will be posted on regulations.gov. Comments that contain profanity, 
vulgarity, threats, or other inappropriate language or content will not 
be considered.

FOR FURTHER INFORMATION CONTACT: Marc Coldiron, U.S. Department of 
Commerce, telephone: 202-482-3678. For media inquiries: Katherine 
Schneider, Office of Congressional and Public Affairs, Bureau of 
Industry and Security, U.S. Department of Commerce: [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    In E.O. 13873, ``Securing the Information and Communications 
Technology and Services Supply Chain,'' (84 FR 22689 (May 17, 2019)) 
the President delegated to the Secretary of Commerce (Secretary) the 
authority granted under the International Emergency Economic Powers Act 
(IEEPA) (50 U.S.C. 1701, et seq.), to the extent necessary, ``to deal 
with any unusual and extraordinary'' foreign threat to the national 
security, foreign policy, or economy of the United States in connection 
with the national emergency declared by the President with respect to 
such threat (50 U.S.C. 1701(a)). In E.O. 13873, the President declared 
a national emergency with respect to the ``unusual and extraordinary'' 
foreign threat posed to the ICTS supply chain and has, in accordance 
with the National Emergencies Act (NEA), extended the declaration of 
this national emergency each year since E.O. 13873's publication (see 
85 FR 29321 (May 14, 2020); 86 FR 26339 (May 13, 2021); 87 FR 29645 
(May 13, 2022); 88 FR 30635 (May 11, 2023); and 89 FR 40353 (May 9, 
2024)).
    Specifically, the President identified the ``unrestricted 
acquisition or use in the United States of [ICTS] designed, developed, 
manufactured, or supplied by persons owned by, controlled by, or 
subject to the jurisdiction or direction of foreign adversaries'' as 
``an unusual and extraordinary'' threat to the national security, 
foreign policy, and economy of the United States that ``exists both in 
the case of individual acquisitions or uses of such technology or 
services, and when acquisitions or uses of such technologies are 
considered as a class'' (E.O. 13873; see also 50 U.S.C. 1701(a)-(b)).
    Once the President declares a national emergency, IEEPA empowers 
the President to, among other acts, investigate, regulate, prevent, or 
prohibit any ``acquisition, holding, withholding, use, transfer, 
withdrawal, transportation, importation or exportation of, or dealing 
in, or exercising any right, power, or privilege with respect to, or 
transactions involving, any property in which any foreign country or a 
national thereof has any interest by any person, or with respect to any 
property, subject to the jurisdiction of the United States'' (50 U.S.C. 
1702(a)(1)(B)).
    To address identified risks to U.S. national security from ICTS 
transactions, the President in E.O. 13873 imposed a prohibition on 
transactions determined by the Secretary, in consultation with relevant 
agency heads, to involve foreign adversary ICTS and to pose certain 
risks to U.S. national security, including U.S. ICTS supply chains and 
critical infrastructure, and to the security and safety of U.S. 
persons. Specifically, to fall within the scope of the prohibition, the 
Secretary must determine that the ICTS transaction: (1) involves ICTS 
designed, developed, manufactured, or supplied by persons owned by, 
controlled by, or subject to the jurisdiction or direction of a foreign 
adversary, defined in E.O. 13873 section 3(b) as ``any foreign 
government or foreign non-government person engaged in a long-term 
pattern or serious instances of conduct significantly adverse to the 
national security of the United States or security and safety of United 
States persons''; and (2):
    A. ``poses an undue risk of sabotage to or subversion of the 
design, integrity, manufacturing, production, distribution, 
installation, operation, or maintenance of information and 
communications technology or services in the United States;''
    B. ``poses an undue risk of catastrophic effects on the security or 
resiliency of United States critical infrastructure or the digital 
economy of the United States;'' or
    C. ``otherwise poses an unacceptable risk to the national security 
of the United States or the security and safety of United States 
persons'' (E.O. 13873 1(a)).
    These factors are collectively referred to as ``undue or 
unacceptable risks.'' Further, E.O. 13873 grants the Secretary the 
authority to design or negotiate mitigation measures that would allow 
an otherwise prohibited transaction to proceed (E.O. 13873 1(b)). The 
President also delegated to the Secretary the ability to promulgate 
regulations that, among other things, establish when transactions 
involving particular technologies may be categorically prohibited (E.O. 
13873 2(a)-(b); see also 3 U.S.C. 301-302). Specifically, the Secretary 
may issue rules establishing criteria, consistent with section 1 of 
E.O. 13873, by which particular technologies or market participants may 
be categorically included in or categorically excluded from 
prohibitions established pursuant to E.O. 13873 (see E.O. 13873 2(b)). 
Any regulated transactions under E.O. 13873 must have a sufficient 
nexus to a foreign adversary, which, according to E.O. 13873's 
implementing regulations at 15 CFR 791.4, currently includes, China, 
People's Republic of (China), including the Hong Kong Special 
Administrative Region; Republic of Cuba (Cuba); Islamic Republic of 
Iran (Iran); Democratic People's Republic of Korea (North Korea); 
Russian Federation (Russia); and Venezuelan politician Nicol[aacute]s 
Maduro (Maduro Regime).

II. Introduction

    Pursuant to the authority delegated to the Secretary under E.O. 
13873, BIS is considering proposing a rule to address the undue or 
unacceptable risks posed by certain transactions involving ICTS 
integral to unmanned aircraft system (UAS) when the ICTS are designed, 
developed, manufactured, or supplied by persons owned by, controlled 
by, or subject to the jurisdiction or direction of foreign adversaries 
(foreign adversary ICTS). BIS is also considering whether there are 
mitigation measures that, if adopted, would allow UAS market 
participants to engage in transactions that would otherwise pose undue 
or unacceptable risks. The purpose of this ANPRM is to gather 
information to support BIS's potential development of a rule regarding 
foreign adversary ICTS

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integral to UAS. For the purposes of this rulemaking, unless terms are 
otherwise defined herein, this ANPRM will apply the definitions listed 
in 15 CFR 791.2.

III. Request for Comments

    BIS is concerned that the involvement of foreign adversaries, 
notably China and Russia, in the design, development, manufacture, or 
supply of ICTS integral to UAS poses undue or unacceptable risk to U.S. 
national security, including U.S. ICTS supply chains and critical 
infrastructure, and to the security and safety of U.S. persons. As 
described in more detail below, these countries can leverage their 
political and legal frameworks to co-opt private entities for national 
interests, and those private entities maintain dominant market 
positions in the global commercial UAS sector. This dominance, 
particularly by China, provides ample exploitation opportunities. 
Further, both countries have shown a willingness to compromise U.S. 
infrastructure and security through cyber espionage. The potential for 
these countries to direct the actions of private entities for the 
purpose of exploiting ICTS supply chains heightens concerns about their 
participation in the U.S. UAS supply chain.
    BIS seeks public input on several topics, including, but not 
limited to, certain definitions and BIS's assessment of how a class of 
transactions involving foreign adversary ICTS integral to UAS could 
present undue or unacceptable risks to U.S. national security and to 
the security and safety of U.S. persons. These risks relate to threats 
from foreign adversary-linked entities, the capabilities of UAS that 
may increase the likelihood of vulnerabilities, and the consequences to 
U.S. national security, including U.S. ICTS supply chains and critical 
infrastructure, and to the security and safety of U.S. persons if these 
vulnerabilities are exploited or intentionally inserted by foreign 
adversary linked entities. BIS recognizes the benefits of UAS 
technologies and does not imply through this ANPRM that any particular 
UAS components, such as data transmission or connectivity devices, 
should not be used. These technologies benefit the United States by 
increasing efficiency in various critical infrastructure sectors such 
as agriculture, construction, transportation, and energy, leading to 
economic growth and improved public safety. However, in E.O. 13873, the 
President focused on addressing risks that ICTS transactions involving 
foreign adversaries might present to U.S. national security and to the 
security and safety of U.S. persons. Therefore, this ANPRM, which is 
being issued pursuant to the authorities granted to the Secretary under 
E.O. 13873, seeks public comment on potential ways to address undue or 
unacceptable risks to U.S. national security, including U.S. ICTS 
supply chains and critical infrastructure, -and to the security and 
safety of U.S. persons that may arise from foreign adversary ICTS 
integral to UAS. As part of BIS's efforts to understand UAS and their 
critical ICTS components, BIS solicits comments on the -ICTS most 
integral to UAS's data collection and connectivity capabilities and 
that are most vulnerable to compromise by an adversarial actor. Such 
ICTS might be included in any mitigation measures or prohibitions 
imposed in a potential rule, and could include, but is not limited to: 
(1) onboard computers responsible for processing data and controlling 
UAV flight; (2) communications systems including, but not limited to, 
flight controllers, transceiver/receiver equipment, proximity links 
such as Global Navigation Satellite Systems (GNSS) sensors, and flight 
termination equipment; (3) flight control systems responsible for 
takeoff, landing, and navigation, including, but not limited to, 
exteroceptive and proprioceptive sensors; (4) ground control stations 
(GCS) or systems including, but not limited to, handheld flight 
controllers; (5) operating software including, but not limited to, 
network management software; (6) mission planning software; (7) 
intelligent battery power systems; (8) local and external data storage 
devices and services; and (9) artificial intelligence (AI) software or 
applications. BIS also solicits input on mechanisms to mitigate the 
risks posed by foreign adversary ICTS integral to UAS, such as 
potential design requirements, machine learning controls, 
implementation standards and protocols, cybersecurity firmware and/or 
software inputs, manufacturing integrity (i.e., the security of the 
manufacturing process to ensure no foreign adversary manipulation) 
protection systems and procedures, or prohibitions.
    Additionally, BIS seeks comment on whether it would be beneficial 
to create a process for the public to request specific authorization to 
engage in certain transactions involving foreign adversary ICTS 
integral to UAS by demonstrating that the parties to a particular 
transaction have implemented measures to adequately mitigate the risk 
to U.S. national security or to the security and safety of U.S. 
persons. BIS encourages public feedback to help inform the rulemaking 
process, particularly regarding the impact on U.S. ICTS supply chains 
and critical infrastructure of any prohibition or mitigation measures 
applicable to foreign adversary ICTS integral to UAS. BIS additionally 
encourages the submission of any public comments germane to the issues 
as described in this ANPRM.

a. Definitions

    BIS requests comments on a definition of ``unmanned aircraft 
systems'' or UAS to use in a potential rule. BIS could define UAS as 
the International Trade Administration (ITA) does to mean ``air 
vehicles and associated equipment that do not carry a human operator, 
but instead are remotely piloted or fly autonomously'' (International 
Trade Administration, Unmanned Aircraft Systems Overview (accessed 
October 15, 2024), https://www.trade.gov/unmanned-aircraft-systems/). 
UAS, more colloquially known as ``drones,'' is a generic term that can 
include, but is not exclusive to, remotely piloted aircraft systems or 
unmanned aerial vehicles. ITA's definition also states ``[a] UAS 
generally consists of (1) an aircraft with no pilot on board, (2) a 
remote pilot station, (3) a [command-and-control] link, and (4) a 
payload specific to the intended application [or] operation, which 
often includes specialized cameras or other sensors that collect data 
for near term analysis'' (International Trade Administration, Unmanned 
Aircraft Systems Overview (accessed October 15, 2024), https://www.trade.gov/unmanned-aircraft-systems/).
    BIS is also contemplating the use of other definitions of UAS from 
the U.S. government, including the definition used by the Federal 
Aviation Administration (FAA), which defines UAS as ``an unmanned 
aircraft and associated elements (including communication links and the 
components that control the unmanned aircraft) that are required for 
the operator to operate safely and efficiently in the national airspace 
system'' (49 U.S.C. 44801(12)). The FAA defines an ``unmanned 
aircraft'' to mean ``an aircraft that is operated without the 
possibility of direct human intervention from within or on the 
aircraft'' (49 U.S.C. 44801(11)).
    BIS also considered the definition of unmanned aerial vehicle (UAV) 
as used within BIS's Export Administration Regulations (EAR), which 
defines UAV as ``[a]ny `aircraft' capable of initiating flight and 
sustaining controlled flight and navigation without any human presence 
on board'' (15 CFR 772.1). The

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EAR defines ``aircraft'' as ``[a] fixed wing, swivel wing, rotary wing 
(helicopter), tilt rotor or tilt-wing airborne vehicle'' (15 CFR 
772.1). BIS considered the use of UAV versus UAS and believes UAV is 
too narrowly focused for future rulemaking purposes, as it only refers 
to the air vehicle itself and excludes other system elements, such as 
the ground control stations, communication links, and other associated 
components necessary for operation.
    BIS is inclined to determine that ITA's definition may be more 
appropriate for purposes of potential regulation because, unlike the 
FAA and EAR definitions, it identifies specific components and systems 
that are integral to UAS. Such a definition may include UAS and UAS 
subsystems, such as control stations; data communications and 
navigation links or, more precisely, command and control and Non-
Payload Communications (CNPC) links; payloads; flight termination 
systems; electronic launch and recovery equipment; recording 
capabilities for receiving live imagery; software or AI software and 
applications necessary for the operation of airborne systems; and the 
capability of remote software or firmware updates. Additionally, ITA's 
definition would incorporate some UAS known as actively tethered UAS, 
which use a load-rated tether that is physically attached to a ground 
station to provide continuous power and which may transmit data to and 
from the UAS, which allows the UAS to remain in the air for an extended 
period of time. Please note that any definition determined by BIS to be 
appropriate for BIS rulemaking regarding UAS would not supersede any 
other legal definition of UAS used in other contexts.
    Given the various definitions that could be utilized, this ANPRM 
seeks comment on the definitions to use in a potential rule regarding 
transactions involving ICTS integral to UAS, and specifically, but not 
limited to:
    1. In what ways, if any, should BIS elaborate on or amend the 
potential definition(s) of UAS as stated above? If amended, how will 
the revised definition enable BIS to better address national security 
risks arising from classes of transactions involving ICTS integral to 
UAS?
    2. Is the term UAS broad enough to include the aircraft systems 
that may combine flight controllers, global navigation satellite 
systems (GNSS) modules, cameras, communication devices, surveillance 
modules, navigation devices, sensors with control systems, and/or 
software with onboard and offboard data storage capabilities? Does a 
better term exist to include such aircraft systems within the 
definition's scope?
    3. Are there other commonly used definitions for UAS that BIS 
should consider when defining a class of transactions involving ICTS 
integral to UAS, including definitions from industry, civil society, or 
international standards organizations? If so, why might those 
definitions be more appropriate for the purposes of a rule?
    4. What is the appropriate focus of any BIS regulations in this 
sector, including, but not limited to, UAS platforms and subcomponent 
technology, UAS capabilities, or UAS end-user sectors, including 
entities providing services performed by UAS?
    5. Are there commonly used definitions and standard capabilities 
for each of the following ICTS components, which BIS has preliminarily 
identified as integral to the UAS platform: (1) onboard computers 
responsible for processing data and controlling UAV flight; (2) 
communications systems including, but not limited to, flight 
controllers, transceiver/receiver equipment, proximity links such as 
GNSS sensors, and flight termination equipment; (3) flight control 
systems responsible for takeoff, landing, and navigation, including, 
but not limited to, exteroceptive and proprioceptive sensors; (4) GCS 
or systems including, but not limited to, handheld flight controllers; 
(5) operating software including, but not limited to, network 
management software; (6) mission planning software; (7) intelligent 
battery power systems; (8) local and external data storage devices and 
services; (9) AI software or applications? Are there additional 
components that BIS should identify as integral to the UAS platform 
and, if so, are there commonly used definitions and standard 
capabilities for each component, such as the American Security Drones 
Act?

b. Risks Associated With UAS

    BIS is soliciting comment on the risks associated with foreign 
adversary ICTS integral to UAS, the rapidly advancing technological 
functionalities of UAS, and the increasing integration of UAS with U.S. 
critical infrastructure. Exponential advancements in UAS functionality 
have allowed for the rapid expansion of the UAS industry in recent 
years. Remote and autonomous control systems have been developed to 
support operational, safety, and environmental applications, minimizing 
physical strain and risks to operators in various fields. Advancements 
in this sector have reduced production and end user costs and increased 
the accessibility of UAS technology. In addition, UAS have become 
integral to various sectors of the economy, including: (1) agriculture, 
where they are used for crop monitoring and precision spraying; (2) the 
chemical industry, where they assist in pipeline inspections and 
hazardous material handling; (3) physical infrastructure and 
transportation, where they are employed for surveying, bridge 
inspections, and construction site management; (4) emergency response; 
(5) health care administration; (6) energy; and (7) media and 
entertainment.
    Over the last decade, UAS have evolved to more sophisticated models 
with improved functionalities, including enhanced connected 
technologies such as advanced flight controllers, multi-GNSS and GNSS 
modules, cameras, receivers, and AI software and applications, which 
have enabled greater autonomy, precision in navigation, enhanced 
surveillance capabilities, and seamless integration with various 
applications across industry. These new technologies require signal and 
communication software to collect vast amounts of data, and in turn may 
increase attack vectors for malicious actors to exploit.
    Commercial UAS have been increasingly adopted in critical 
infrastructure sectors, as defined in National Security Memorandum-22 
of April 2024 (see Grand View Research, Drone Market Size, Share & 
Trends Analysis Report by Component (Hardware, Software, Services), By 
Product, By Technology, By Payload Capacity, By Power Source, By End-
use, By Region, and Segment Forecasts, 2024-2030 (accessed October 15, 
2024), https://www.grandviewresearch.com/industry-analysis/drone-market-report; see also The White House, National Security Memorandum 
on Critical Infrastructure Security and Resilience (April 30, 2024), 
https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/30/national-security-memorandum-on-critical-infrastructure-security-and-resilience/). UAS used in these sectors often rely on the same 
aircraft used by recreational drone enthusiasts, but in many cases the 
UAS used to support critical infrastructure have longer flight times, 
can lift heavier and more complex payloads, can fly beyond visual line 
of sight, and have the durability to fly through rough weather 
conditions. UAS capable of lifting and carrying payloads for extended 
periods of time pose a specific and aggravated risk of both data 
collection and manipulation, as well as remote access that could be 
misused for destructive

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purposes. As critical infrastructure becomes more reliant on commercial 
UAS, their remote incapacitation by a foreign adversary creates 
increased risk to U.S. national security and to the security and safety 
of U.S. persons.
    Malign remote access to UAS could be used to harm or damage 
physical infrastructure via intentional collisions, the delivery of 
kinetic payload, or could result in altered sensitive readings on 
critical infrastructure data. These risks can be exacerbated if the 
ICTS integral to UAS is designed, developed, manufactured, or supplied, 
by persons owned by, controlled by, or subject to the jurisdiction or 
direction of a foreign adversary. Accordingly, BIS requests public 
comment on the undue or unacceptable risks posed by transactions 
involving foreign adversary ICTS integral to UAS technology. BIS seeks 
comments on the following topics but encourages the submission of any 
comments germane to the issues discussed in this ANPRM:
    6. BIS identified data exfiltration and remote access control as 
the two primary areas of risk associated with transactions involving 
foreign adversary ICTS integral to UAS technology. Are there other 
risks or factors contributing to the risk that BIS has not considered 
in the above analysis?
    7. Which specific sectors or elements of critical infrastructure 
operated by private organizations, specifically within the commercial 
market, are most at risk if UAS technology is compromised?

c. Threat Posed by Foreign Adversaries

    Foreign adversaries like China and Russia have established certain 
legal and regulatory frameworks through which they could compel 
entities under their jurisdiction to comply with requests for 
information regarding U.S. persons or access to systems in the U.S. 
ICTS supply chain. China has implemented a series of laws (e.g., the 
National Intelligence Law of 2017, the Cybersecurity Law of 2017, the 
Personal Information Protection Law (PIPL) of 2021, the National 
Security Law of 2015) that mandate cooperation with China's 
cybersecurity efforts, intelligence operations, and the protection of 
national security interests by individuals and entities subject to the 
jurisdiction of China. These laws require network operators and 
technology companies to assist public security agencies in safeguarding 
cybersecurity and providing access to data stored within China's 
borders (see Department of Homeland Security, Data Security Business 
Advisory (July 11, 2022), https://www.dhs.gov/sites/default/files/publications/20_1222_data-security-business-advisory.pdf). 
Specifically, the National Security Law of 2015 imposes obligations 
that require organizations and individuals to cooperate with Chinese 
authorities on undefined `matters of national security,' potentially 
requiring technology companies to expose the personal information of 
U.S. citizens or companies (see CNA, China's National Security Laws: 
Implications Beyond Borders (December 2023), https://www.cna.org/quick-looks/2023/China-national-security-laws-implications-beyond-borders.pdf).
    Similarly, Russian legislation (e.g., Federal Law No. 40-FZ, ``On 
the Federal Security Service''; Federal Law No. 144-FZ, ``Open-
Investigative Activity''; Federal Law No. 97-FZ, ``On Amendments to the 
Law'') grants the Russian government direct access to Russian 
corporations' activities and facilities. Using this authority, the 
Russian government could access companies' data and consumer 
information and mandate that companies cooperate with the Federal 
Security Services (FSB) to assist with counterintelligence actions, 
which can include installing government equipment on companies' 
infrastructure for data collection. These laws compel Russia-based 
telecommunications providers, internet service companies, and other 
entities to assist Russian security agencies in investigations and 
surveillance, ensuring compliance with national security imperatives 
(see Federal Law No. 374-FZ, ``On Amending Federal Law `On Combating 
Terrorism' And Certain Legislative Acts of the Russian Federation 
Regarding the Establishment of Additional Counter-Terrorism Measures 
and Public Security'').
    Within the United States, products developed by China-based 
entities make up at least 75 percent of the UAS consumer market (see 
Lukas Schroth, Drone Market Shares in the USA After China-US Disputes, 
Drone Industry Insights (March 2, 2021), https://droneii.com/drone-market-shares-usa-after-china-usa-disputes; see also David Kitron, Game 
of Drones: Chinese Giant DJI Hit by U.S. Tensions, Staff Defections, 
Reuters (March 8, 2021), https://www.reuters.com/article/us-usa-china-tech-dji-insight/game-of-drones-chinese-giant-dji-hit-by-u-s-tensions-staff-defections-idUSKBN2AZ0PV/). The large market share of China-based 
entities allows China to exercise control over the supply chain and 
deny access to UAS technology. With the added element of China's 
ability to exercise jurisdiction over the primary producers of UAS 
products and components globally, China is unmatched in its control 
over crucial UAS elements used for commercial needs. The preeminence of 
China-based entities in the U.S. market provides China, through its 
established legal framework and control over persons subject to its 
jurisdiction, a significant opportunity to collect U.S. persons' data 
and potentially deny services to the United States and its allies in 
response to unfavorable policies or conflicts.
    Russia, in comparison to China, comprises a relatively small 
portion of the global UAS market share, but has announced its intention 
to heavily invest in developing Russia's UAS domestic market over the 
next few years to be less reliant on external manufacturers (see, e.g., 
Russia plans to produce 18,000 drones annually by late 2026--first 
deputy premier, TASS (April 27, 2023), https://tass.com/economy/1610899). As of 2023, Russia reportedly produced only 6,000 UAS and 
aims to boost domestic drone production for various industry sectors 
(see Martin Forusek, Russian official: Russia aims to produce over 
32,000 civilian drones annually by 2030, Kyiv Independent (January 6, 
2024), https://kyivindependent.com/russian-official-russia-aims-to-produce-32-000-drones-annually-by-2030/). While the nascent state of 
Russia's UAS market may not currently pose risks to U.S. national 
security, including U.S. ICTS supply chains and critical 
infrastructure, and to the security and safety of U.S. persons in the 
commercial space, the projected growth of Russia's domestic market 
suggests national security risks will emerge if left unchecked. The 
strategic investments being made in Russia mirror the same efforts made 
by China in its own markets and may position Russia as a high-volume 
supplier in the UAS space in the near future.
    Despite their different current UAS market shares, China and Russia 
have demonstrated that they are capable of engaging in cyber activities 
that seek to harm U.S. critical infrastructure and national security 
for strategic advantage. According to the Office of the Director of 
National Intelligence, China's cyber espionage pursuits and the export 
of surveillance, information, and communications technologies by China-
based industries increase the threats of aggressive cyber operations 
against the United States and the suppression of the free flow of 
information in cyberspace (see Office of the Director of National 
Intelligence, Annual Threat Assessment (2024), https://www.dni.gov/files/ODNI/documents/assessments/ATA-2024-Unclassified-Report.pdf). 
Additionally,

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Russia has long exploited vulnerabilities targeting critical 
infrastructure in the United States as well as in allied and partner 
countries (see Cybersecurity and Infrastructure Security Agency, 
Hunting Russian Intelligence ``Snake'' Malware (May 9, 2023), https://www.cisa.gov/news-events/cybersecurity-advisories/aa23-129a). Whether 
through pre-positioning attacks or exploiting software vulnerabilities, 
China and Russia have exhibited their intent and capability to 
compromise U.S. national security, including U.S. ICTS supply chains 
and critical infrastructure, and the security and safety of U.S. 
persons.
    Further, foreign adversaries, such as China or Russia, could direct 
UAS companies subject to their jurisdiction to engineer vulnerabilities 
into their products, exploit existing vulnerabilities, or push 
malicious updates, compromising these products without the UAS owner's 
knowledge. In the past, for example, China-based UAS companies have 
pushed firmware updates to implement no-fly restrictions that would 
disable their UAS in conflict zones defined by the company (see, e.g., 
Haye Kesteloo, Autel Robotics Implements No-Fly Zones in Conflict Areas 
to Prevent Drone Misuse, DroneXL (December 24, 2023), https://dronexl.co/2023/12/24/autel-robotics-drone-no-fly-zones-conflict/; 
Gareth Corfield, Drone maker DJI quietly made large chunks of Iraq, 
Syria no-fly zones, The Register (April 26, 2017), https://www.theregister.com/2017/04/26/dji_drone_geofencing_iraq_syria/). These 
UAS no-fly zones can also be altered through non-commercial methods by 
disabling UAS safety features (see, e.g., Support, No-Fly Zones (NFZ) 
Explained, Drone-Hacks Wiki (last edited June 18, 2024), https://wiki.drone-hacks.com/en/nfz-explained). As of 2024, these alterations 
can be implemented across several China-based UAS models (see, e.g., 
Drone-Hacks, Available Hacks (accessed October 15, 2024), https://drone-hacks.com/available-hacks/(an illustrative example of a website 
that allows users to download software to modify a drone's operating 
system to operate outside of specified no fly zones)). Pushing forced 
updates that disable UAS in predefined zones and circumventing safety 
features demonstrate two vectors through which a foreign adversary 
could abuse its access and influence over a company intentionally to 
target UAS products owned by U.S. persons or operated in the United 
States, disrupt their operation, and in turn severely impact U.S. 
national security, including the U.S. ICTS supply chain and critical 
infrastructure, and the security and safety of U.S. persons.
    This ANPRM seeks comments on the role of persons owned by, 
controlled by, or subject to the jurisdiction or direction of a foreign 
adversary in the U.S. supply chain for ICTS components integral to UAS. 
For clarity, this ANPRM uses the term ``UAS companies'' to refer to the 
manufacturers or distributors of a finished UAS product, like a drone, 
while the term ``UAS Original Equipment Manufacturers'' (OEMs) refers 
to the producers of the UAS components, including the tier 1, tier 2, 
and tier 3 suppliers. The term ``UAS service providers'' refers to 
entities responsible for desktop and mobile applications supporting 
UAS. A single company, depending on its products, could be a UAS 
company, OEM, and service provider all at once. BIS seeks comments on 
the below topics but encourages the submission of any comments germane 
to the issues discussed in this ANPRM:
    8. In this section, BIS identified threats posed by transactions 
involving ICTS integral to UAS with a nexus to China or Russia. Has BIS 
fully captured and articulated the threat posed by transactions 
involving such ICTS? If not, what additional threats should BIS 
consider?
    9. Do other foreign adversaries identified in 15 CFR 791.4, such as 
Iran, North Korea, Cuba, and the Maduro Regime of Venezuela, pose 
similar risks to the UAS ICTS supply chain that BIS should consider? 
Are there specific persons or entities with a nexus to these foreign 
adversaries that BIS should consider?
    10. Which ICTS components integral to UAS are designed, developed, 
manufactured, or supplied predominantly or exclusively by persons owned 
by, controlled by, or subject to the jurisdiction or direction of a 
foreign adversary?
    a. Are UAS companies capable of tracking and reporting the sources 
of these ICTS components?
    b. Are there specific ICTS components that UAS companies focus on 
when evaluating their supply chains for involvement with foreign 
adversary linked entities?
    11. What are the potential tradeoffs of a rule prohibiting the 
resale or rental in the United States of UAS or UAS components that are 
designed, developed, manufactured, or supplied by persons owned by, 
controlled by, or subject to the jurisdiction or direction of a foreign 
adversary?
    12. What are the software applications, whether freeware or 
requiring an account or purchase, that companies within the UAS supply 
chain generally develop or distribute in support of UAS, and/or sell or 
resell within the United States or to U.S. persons?
    a. What is the provenance of all source code for such software 
applications? What do the distribution channels for such software 
applications look like (e.g., direct, follow components, aftermarket)?
    b. Please identify any significant third parties that develop 
source code for UAS OEM's software product lines.
    13. Please describe the ICTS supply chain for UAS that are used or 
sold in the United States. Particularly useful responses may include 
information regarding:
    a. Market leaders for each distinct phase of the supply chain for 
ICTS integral to UAS (e.g., design, development, manufacturing, or 
supply) including, but not limited to: (1) UAS companies; (2) OEMs, 
including tier one, tier two, and tier three suppliers; and (3) service 
providers.
    b. Geographic locations where software (e.g., product operating 
systems or waypoint software), hardware (e.g., light detection and 
ranging (LiDAR) sensors), or other ICTS integral to UAS in use in the 
United States, are designed, developed, manufactured, or supplied.
    c. The length of time it typically takes to conduct due diligence 
on UAS vendors, how long the design phase is for UAS, and how quickly 
UAS companies can make changes to the supply chain.
    14. Which ICTS components integral to UAS, including but not 
limited to those identified in this ANPRM, pose the greatest risk to 
U.S. national security, including U.S. ICTS supply chains and critical 
infrastructure, or to the security and safety of U.S. persons if they 
are foreign adversary ICTS?

d. Capabilities of UAS That May Increase the Likelihood of 
Vulnerabilities That Foreign Adversary Linked Entities Could Exploit

Data Collection

    UAS incorporate numerous ICTS components including sensors to 
gather environmental information, actuators to enable remote or 
autonomous movements, telecommunications equipment to receive signals 
necessary for flight, and software with intelligent algorithms to 
execute actions based on the gathered data. UAS for commercial or 
military purposes may incorporate additional equipment to collect more 
complex data, including multispectral sensors, thermal cameras, 
infrared

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sensors, and radar. These sensors may collect and transmit a wide 
variety of sensitive data (e.g., critical infrastructure facility 
layouts which could be used to plot potential avenues for sabotage of 
such facilities). In general, data collected by UAS can be stored in 
multiple locations depending on the specifications of the UAS and user 
decisions, including on an internet-connected device such as a mobile 
phone or a computer, on a radio control device, on a hard drive or 
personal server, or on a cloud platform provided by UAS companies. In 
some instances, UAS companies state in their privacy policies that data 
may be stored in data centers located outside of the user's home 
country, to include where the UAS company is headquartered.
    BIS seeks to better understand the data collection capabilities 
including intelligent machine learning algorithms of UAS and the ICTS 
components therein. In particular, BIS seeks further comment on the 
following topics but encourages the submission of any comments germane 
to the issues discussed in this ANPRM:
    15. What are the general data collection capabilities of UAS? What 
is the level of aggregation and scale of data that UAS can collect on 
U.S persons, entities, geography, and infrastructure?
    a. Who besides the operator of the UAS generally has authorized 
access to, or control of, data collected by UAS?
    b. How is the data collected by UAS sold or integrated into data 
markets?
    16. What are the UAS industry standard policies or procedures, if 
any, governing how data generated by, owned by, or otherwise associated 
with U.S. persons is stored, managed, processed, gathered, or protected 
in or on data-related services equipment located outside of the United 
States? BIS defines ``data-related services equipment'' as hardware 
used to receive, store, process or transmit data in support of data-
related services, including routers, firewalls, gateways, switches, 
servers, load-balancers, intrusion detection systems, domain name 
systems, and storage area networks.
    17. Are there standards or best practices for data retention and/or 
data disposition policies or procedures, involving data-related 
services equipment located outside the United States following the 
termination of any UAS account services by U.S. persons?
    18. What are the standard policies or procedures related to UAS 
companies' and UAS OEMs' review of or access to data generated by, 
owned by, or otherwise associated with U.S. persons?
    19. Are there industry standard policies or procedures establishing 
how UAS companies must or should protect the privacy of data generated 
by, owned by, or otherwise associated with U.S. persons?
    20. What cybersecurity measures, authentication, or controls do UAS 
service providers and other companies supporting the UAS supply chain 
use to mitigate risks surrounding data collection, access, storage, 
processing, and exfiltration?
    21. Is it standard for UAS companies to have data-related services 
equipment located outside of the United States that, at any time, UAS 
companies use to store, collect, process, analyze, share, distribute, 
or manage data generated by, owned by, or otherwise associated with 
U.S. persons?
    22. How are UAS integrated in critical infrastructure sectors? 
Which of these integrated UAS services, if any, are particularly unique 
or of a sensitive nature such that a disruption to the UAS supply chain 
would create a gap for the sector?
    23. Which sensors in or on UAS that are typically used in critical 
industries (e.g., agricultural, chemical, construction, energy, 
telecommunication) are able to collect or transmit data or have 
connection capabilities?
    a. Are there official aftermarket modification or customization 
options available for these types of sensors?
    b. Are there any standard requirements for these sensors?
    24. What is the standard practice for data sharing relationships 
between UAS companies and individuals or entities within the United 
States?
    a. Are there agreements between UAS companies and cloud computing 
service providers that require the exclusive or prioritized use of that 
cloud service's network infrastructure? If so, please provide examples 
of how those agreements operate.
    b. In industries in the United States where UAS are used to collect 
data, do companies share the data they collect with other companies? 
For what purpose (if not for the primary purpose of data collection)?
    25. Are there any standard assessments, audits, or evaluations, 
internal or by an external party, of UAS companies' data privacy 
policies related to any data generated by, owned by, or otherwise 
associated with U.S. persons?
    26. What role do specific remote sensing ICTS components serve for 
data collection by UAS? Particularly useful responses will describe the 
data collection role of the following components:
    a. Imagery (RGB and Multi-spectral), 3-Dimensional, or Acoustic 
Sensors;
    b. Particle Sensors (regardless of wavelength);
    c. Radio Frequency Sensors;
    d. Proximity and Navigation Sensors;
    e. Electro-Magnetic Sensors; and/or
    f. Other Sensors (including inertial).
    27. How often are software applications related to the operation of 
UAS installed on a UAS user's phone? What policies govern the 
application's access to other information on the user's phone?
    28. What systems, sensors, or equipment do UAS and their affiliated 
UAS operators use when not navigating or storing data over mobile 
networks?
    29. How do UAS operators secure data that is transmitted, received, 
or stored during the normal operation of a UAS without connecting to 
the internet?

Remote Access and Control

    Connectivity features in UAS have raised significant concerns 
regarding illicit remote access and security vulnerabilities (see, 
e.g., Department of the Army, Discontinue Use of Da Jiang Innovation 
(DJI) Corporation Unmanned Aircraft Systems (August 2017), https://www.suasnews.com/2017/08/us-army-calls-units-discontinue-use-dji-equipment/). As UAS become increasingly sophisticated and equipped with 
advanced communication technologies such as Wi-Fi, Bluetooth, cellular 
connections, or other cellular communications technologies, the risk of 
unauthorized access to and control over UAS by malicious actors may 
grow. The integration of advanced communication technologies may allow 
malicious actors to intercept or hijack communication signals between a 
UAS and its controller, potentially leading to unauthorized access to 
sensitive data or control over the UAS itself.
    Malicious actors could gain illicit access to cloud platforms used 
by UAS to store data or authorize remote control access and use that 
access to determine the location of a UAS and pilot (see Andy 
Greenberg, This Hacker Tool Can Pinpoint a DJI Drone Operator's Exact 
Location, Wired (March 2, 2023), https://www.wired.com/story/dji-droneid-operator-location-hacker-tool/). Once malicious actors gain 
such access, they can obfuscate their identities to obtain U.S. 
persons' sensitive information and data related to critical 
infrastructure. For example, researchers studying this issue have been 
successful in reverse engineering the radio frequency that controls a 
UAS and have been able to pinpoint the position of the UAS, the UAS 
home point, and the remote pilot's location (see Nico

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Schiller, et al., Drone Security and the Mystery Case of DJI's DroneID 
(March 2023), https://www.ndss-symposium.org/wp-content/uploads/2023/02/ndss2023_f217_paper.pdf). Further, unauthorized UAS access may 
provide avenues for malicious actors to infiltrate drone operations 
within critical infrastructure companies, compromising their 
functionality and security. The potential consequences of compromised 
UAS systems are significant. Malicious actors' access to UAS could lead 
to the exfiltration of sensitive data, including real-time video feeds 
and geolocation information, which can be used to gather intelligence 
and conduct surveillance to threaten U.S. national security, including 
U.S. ICTS supply chains and critical infrastructure, or the security 
and safety of U.S. persons.
    To understand the vulnerabilities inherent in UAS, BIS requests 
comments regarding specific ICTS components that enable UAS 
connectivity, such as network connectivity chips, operating software, 
AI software and machine learning applications, and data transmission 
devices. These components, which facilitate UAS communication with 
external networks, are susceptible to various forms of potential UAS 
cyber vulnerabilities if not properly secured. Supply chain security 
for these components may be essential. Compromised network connectivity 
chips, for example, may introduce backdoors or other malicious 
functionalities during the manufacturing process, which may be 
triggered when the UAS is activated. UAS could also be compromised 
through the corruption and injection of artificial intelligent code 
during the supply chain process in order to introduce vulnerabilities 
or functionalities affecting data access and UAS control, for example. 
The supply chain may be manipulated by foreign adversaries who seek to 
exploit vulnerabilities at various stages of production and 
distribution. Understanding and mitigating these risks by implementing 
comprehensive security assessments and standards may be vital for 
ensuring the integrity and security of UAS communication capabilities. 
Enhanced scrutiny of the UAS supply chain, especially regarding foreign 
adversary ICTS components, may be necessary to safeguard against 
potential threats from foreign adversaries. As such, BIS seeks to 
understand the following topics in greater detail but welcomes any 
other comments germane to the issues discussed in this ANPRM:
    30. What is the physical range of connectivity for UAS systems for 
commercial use?
    31. Where is data stored on the physical UAS if any? Where is data 
that a UAS captures during routine operations stored off the physical 
UAS?
    a. How long is data stored on and off the UAS platform?
    32. What, if any, industry standard policies or procedures govern 
how UAS communicate, what kinds of information UAS can communicate, 
with what they can communicate, and which components enable, store, or 
analyze these communications?
    33. What controls or procedures govern or should govern the use of 
AI in UAS?
    34. What types of remote access or control do OEMs have over their 
UAS? Please also describe under what circumstances an OEM would require 
remote access or control.
    35. To what extent can individual sensors and components 
communicate independently from the UAS Operating System (OS)?
    36. What cybersecurity standards and best practices exist for the 
UAS supply chain? How do UAS OEMs supplement existing cybersecurity 
standards and best practices at each step of the UAS supply chain, 
including design, manufacturing, and maintenance?
    37. How do UAS OEMs or UAS operators integrate payloads and related 
components from third parties into their software, OS, and AI software 
and applications?
    38. Who are the third parties that commonly provide payloads and 
component parts (e.g., sensors, payloads, cameras) for integration into 
UAS production?
    a. Which, if any, of these third parties are owned by, controlled 
by, or subject to the jurisdiction or direction of a foreign adversary? 
Which, if any, of these third parties are owned by entities that 
operate under the laws of a foreign adversary? Where are these third 
parties incorporated and physically located? Please provide factual 
support where possible.
    39. What ICTS components, other than payloads and related 
components, are made by non-U.S. third parties (i.e., not the U.S. UAS 
OEM) for incorporation into UAS? Where are these component parts made? 
Where are the UAS assembled, and what entity (e.g., OEM, third party 
servicer, or user/operator) would typically incorporate or integrate 
these additional components into a UAS?
    40. Who provides and is responsible for cybersecurity updates to 
software, firmware, and AI software and applications for component 
parts integrated into UAS (e.g., sensors, camera, payload)?

e. Consequences of Foreign Adversary Involvement in ICTS Integral to 
UAS

    The ability of a foreign adversary to direct or control private 
companies through applicable legal frameworks, combined with the 
possible exploitation of vulnerabilities in the increasingly capable 
ICTS components integral to UAS, poses a significant threat of data 
exfiltration and malicious remote access. This could lead to severe, 
and in some instances catastrophic, consequences for U.S. national 
security, including U.S. ICTS supply chains and critical 
infrastructure, and for the security and safety of U.S. persons.
    Through foreign adversary ICTS integral to UAS, the intelligence 
agencies of foreign adversaries could exfiltrate, collect, and 
aggregate a wide range of sensitive data on U.S. persons and critical 
infrastructure held by companies in the UAS ICTS supply chain. The data 
collected by UAS or by a connected device could include locations, for 
example, of military installations or critical infrastructure including 
water infrastructure or energy generation or storage facilities, flight 
paths, audio and video recordings, as well as information about 
operators' identities, finances, contacts, operator base locations, and 
operating sector, including critical infrastructure, which can be 
collected by UAS or by a connected device.
    In addition, denial of service through backdoors embedded in a 
UAS's software could enable a foreign adversary linked entity under 
certain conditions to obtain control over various UAS functions, 
including the ability to disable the UAS completely. To illustrate 
using an example noted generally above, in December 2023, a China-based 
UAS manufacturer rolled out a firmware update to their UAS that 
disabled any UAS located in ``conflict zones'' defined by the company 
to include Gaza, West Bank, Israel, Russia, Ukraine, and Taiwan, among 
others. Once the UAS entered one of the conflict zones with the 
downloaded update, it would cease functionality. Users would only be 
able to continue operation by refusing to download the update to the 
detriment of the long-term functionality of the UAS, as it would 
effectively bar the users from receiving future updates (see Haye 
Kesteloo, Autel Robotics Implements No-Fly Zones in Conflict Areas to 
Prevent Drone Misuse,

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DroneXL (December 24, 2023), https://dronexl.co/2023/12/24/autel-robotics-drone-no-fly-zones-conflict/). If abused by a malicious actor, 
pushed updates like this could open users up to the risk of newly 
defined and restricted ``zones'' that could affect the use and control 
of their UAS. A foreign adversary could exploit firmware updates of 
this type by exercising influence or control over a UAS service 
provider and instructing them to push a certain update.
    BIS seeks to better understand how UAS OEMs may impact UAS 
functionality through their incorporated ICTS components. In 
particular, the ANPRM seeks further comment on the following topics but 
encourages the submission of any comments that are germane to the 
issues discussed in this ANPRM:
    41. In what instances, and how, would OEMs be able to terminate 
functionality of a UAS (i.e., denial of service)?
    a. What are the standards and best practices governing the ability 
of OEMs to terminate functionality of a UAS?
    b. Are there instances in which a third party or a subcomponent 
maker (e.g., a maker of sensors) could remotely deny service to and 
fully or partially terminate functionality of a UAS or its respective 
sensor or component independently of the OEM?
    c. Once service is denied or functionality is terminated, what are 
the standards and best practices for reinstating full operability?
    d. Are there instances in which a UAS and its subcomponents can use 
any inherent connectivity they possess to connect to other devices, the 
cloud, or connected software applications online but be insulated 
against denial-of-service updates or patches by the OEM?

f. Mitigations and Authorizations

    In addition to the topics discussed above, this ANPRM seeks comment 
on processes and mechanisms that BIS could implement in a potential 
rule to authorize otherwise prohibited ICTS transactions if the parties 
to such transactions adopt certain mitigation measures or otherwise 
mitigate the undue and unacceptable risks to U.S. national security, 
including U.S. ICTS supply chains and critical infrastructure, or to 
the safety and security of U.S. persons. In particular, the ANPRM seeks 
further comment on the following topics but encourages the submission 
of any comments that are germane to the issues discussed in this ANPRM:
    42. Are there instances in which granting a temporary authorization 
to engage in otherwise prohibited UAS ICTS transactions would be 
necessary to avoid supply chain disruptions or other unintended 
consequences and in the interest of the United States?
    43. Which, if any, categories or classifications of end users 
should BIS consider excluding from any prohibitions on transactions 
involving foreign adversary ICTS integral to UAS because transactions 
involving such end users would not pose an undue or unacceptable risk?
    44. For what categories of ICTS transactions relating to UAS should 
BIS require a specific authorization before the transaction is 
permitted in the United States?
    45. Please comment on potential requirements for authorizations and 
certifications for industry participants (e.g., assemblers, 
manufacturers, dealers, sellers) filed electronically with BIS.
    46. What certification or validation process should be implemented 
in order to validate mitigation actions taken? Should third-party 
testing and evaluation occur, and at what stage in the process should 
this testing and evaluation occur in order to validate mitigation 
actions?

g. Economic Impact

    BIS is mindful that any regulation of transactions involving 
foreign adversary ICTS integral to UAS could have significant economic 
impacts on sectors that have incorporated this technology into their 
processes and may rely on UAS. For example, BIS recognizes regulations 
on these transactions could pose supply chain obstacles that could 
affect UAS and UAS component prices. BIS is concerned, however, about 
the short-term and long-term consequences of UAS and UAS supply chain 
abuse by foreign adversaries. Accordingly, this ANPRM seeks further 
comment on the following topics but encourages the submission of any 
comments that are germane to the issues discussed in this ANPRM:
    47. What, if any, anticompetitive effects may result from 
regulation of transactions involving foreign adversary ICTS integral to 
UAS as contemplated by this ANPRM? And what, if anything, can be done 
to mitigate the anticompetitive effects?
    48. What data privacy and protection impacts to U.S. businesses or 
the public, if any, might be associated with the regulation of 
transactions involving foreign adversary ICTS integral to UAS 
contemplated in this ANPRM? What are the benefits and costs, if any, of 
these impacts?
    49. What additional economic impacts to U.S. businesses or the 
public, if any, might be associated with the regulation of transactions 
involving foreign adversary ICTS integral to UAS contemplated by this 
ANPRM?
    a. If responding from outside the United States, what economic 
impacts to local businesses and the public, if any, might be associated 
with regulations of transactions involving foreign adversary ICTS 
integral to UAS in the United States?
    50. What actions can BIS take, or provisions could it add to any 
proposed regulations, to minimize potential costs borne by U.S. 
businesses or the public?
    a. If responding from outside the United States, what actions can 
BIS take, or what provisions could it add to any proposed regulations, 
to minimize potential costs borne by local businesses or the public?

Elizabeth L.D. Cannon,
Executive Director, Office of Information and Communications Technology 
and Services.
[FR Doc. 2024-30209 Filed 1-2-25; 8:45 am]
BILLING CODE 3510-33-P
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