The Restrict Act 2023 Breakdown

Senator Mark R. Warner( D-VA) introduced the Restrict Act on March 03, 2023, also known as S.686 to deal with emerging security threats to information and security. The Senate released a publication that stated that this act will empower the Secretary of Commerce to review, prevent and mitigate ITC transactions with foreign adversaries.

How the Bill Foreign Adversaries

The Restrict Act defines foreign adversaries as any foreign government or regime determined by the Secretary to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or the security and safety of United States persons.  This would include the Russian Federation, the People’s Republic of China, the Islamic Republic of Iran, the Democratic People’s Republic of North Korea, and the Bolivarian Republic of Venezuela under the regime of Nicholas Maduro Moros. However, the language is flexible in the definition that any could be added or removed by the Secretary of Commerce. 

The Scope of the Bill

According to Section 3 of S.686 the Secretary of Commerce takes action to identify, deter, disrupted, prevent, prohibit, investigate, or other mitigate by negotiating, entering into or imposing and enforcing any mitigation measure to address any risk arising from any covered transaction by a person with respect to any property, subject to the determination of the United States that Secretary of Commerce determines poses an unacceptable risk :

• Sabotage or subversion of the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of information and communications technology products and services in the United States. 

• Catastrophic effects on the security or resilience of the critical infrastructure of the digital economy of the United States of America

• Interfering in or altering the result or reported result of a Federal election as determined in coordination with the Attorney General, the Director of National Intelligence, the Secretary of the Treasury, and the Federal Election Commission. 

• Covercive or criminal coercive or criminal activities by a foreign adversary that are designed to undermine democratic processes and institutions or steer policy and regulatory decisions in favor of the strategic objectives of a foreign adversary to the detriment of the national security of the United States, as determined in coordination with the Attorney General, the Director of National Intelligence, the Secretary of Treasury, and the Federal Election Commission; 

The bill provides a large list of ITC technology, hardware, and software that makes the bill encompass virtually all forms of ITC technology. The bill applies to individuals, a firm, government agencies, government departments, government commissions, labor unions, fraternal or social organizations, partnerships, trust, joint ventures, corporations, a group, subgroups, and other association that is for profit or not. 

This also applies to any individuals with a holding and holding is defined as an equity interest, stock, security, a share, partnership interest, an interest in a limited liability company, membership interest, any participation, right, or another equivalent, however, designated and of any character and includes without limitation any security, convertible into an ownership interest and right, warrant, or option to acquire ownership interests. 

The Penalty for Doing Bussiness with Foreign Adversaries

Anyone who breaks this law can be fined anywhere from 250,000 per transaction, to 1,000,000 dollars in criminal fines and can spend up to 20 years in prison. anyone who breaks this law will undergo forfeiture. Forfeiture is when the government seizes all of your assets that you can use, may use, or have used to commit a crime.  If you take into account the penalties, the scope of the bill and the powers it gives the secretary of commerce the Restrict Act gives the government dangerous levels of control over the economy with little or no transparency to the public.