Read the original article: Could the TikTok and WeChat Executive Orders Undermine IEEPA?
On August 6, President Trump issued two executive orders targeting popular apps owned by Chinese companies. One order would ban transactions with ByteDance, the Chinese owner of TikTok. The other would ban transactions with Chinese company Tencent Holdings related WeChat, a multi-service messaging app widely used in China as well as among the Chinese diaspora and foreigners doing business in China.
The orders were rightly received as a significant escalation of tensions between Washington and Beijing. Commentators have observed that the administration’s move is a major step toward further balkanization of the internet, with powerful countries restricting or preventing access to foreign apps and technology and creating exclusive spheres of control over networks. While the order on TikTok has received the most attention, many analysts have warned that effectively banning WeChat would be a devastating blow to the ability of U.S. persons to connect with people in China and to do business in the country. Some commentators have questioned the national security rationale the administration put forward in support of its actions, pointing to gaps and oversights in preparing for its potential repercussions.
For now, the immediate legal implications of the executive orders are unclear and fairly limited. The specific restrictions the orders provide for will only become effective in 45 days, and they depend on further action by the secretary of commerce (though Bobby Chesney suggests that the secretary’s role may be limited).
But the orders could have an unexpected yet important indirect effect. At least with respect to TikTok, the president’s action constitutes a particularly bold and unusual application of the International Emergency Economic Powers Act (IEEPA) against a powerful target with robust U.S. presence. What’s more, the action arguably raises First Amendment issues. If the restrictions against TikTok ever reach the courts, the judiciary might not be as deferential to the administration’s national security argument as it typically has been in previous cases involving sanctions pursuant to IEEPA. The administration’s move may invite more judicial scrutiny than usual that could result in additional restrictions on the application of a key U.S. foreign and security tool that has hitherto been exercised relatively freely.
The Orders
The two orders are very similarly structured, invoking IEEPA and the National Emergencies Act as the source for the president’s authority. Chesney recently provided a useful overview of the relevant aspects of IEEPA as applied to TikTok. In a nutshell, IEEPA grants the president broad authority to take extensive economic measures in response to an “unusual and extraordinary” threat to the national security, foreign policy, or economy of the United States, if he declares an emergency with respect to that threat. That authority includes the power to impose sanctions on individuals and entities:
(a)In general
(1)At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—
(A)investigate, regulate, or prohibit—
(i)any transactions in foreign exchange,
(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
(iii) the importing or exporting of currency or securities,
by any person, or with respect to any property, subject to the jurisdiction of the United States;
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, 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; […]
The orders do not declare a new emergency, but instead rely on the national emergency Trump declared in May 2019 with respect to “Securing the Information and Communications Technology and Services Supply Chain.” According to the orders, both TikTok and WeChat pose a national security threat because they facilitate the transfer of troves of data about Americans to the Chinese government. The apps, the orders claim, also serve as conduits for the Chinese government to control undesired narratives and spread disinformation.
The operative portion of the orders provides that, beginning in 45 days, any transaction by any person subject to the jurisdiction of the United States with ByteDance, and any WeChat-related transaction with Tencent, will be prohibited. However, the orders also provide that “45 days after the date of this order, the Secretary [of Commerce] shall identify the transactions subject to” the prohibition. This could suggest that not every transaction would in fact be prohibited.
The requirement for further implementing action arguably renders the orders inoperative until such time as the secretary of commerce decides which types of “transactions” would be subject to the ban: Offering the apps on app stores? Downloading the apps to a personal device? Uploading content? Failing to erase a previously downloaded app? For now, there is ambiguity as to the scope of the prohibition.
Notably, many commentators have pointed out that the WeChat order could prohibit transactions with additional U.S. companies owned in whole or in part by Tencent—which has significant stakes in several gaming apps, among other interests in U.S. companies. In my view, a better reading of the order is that it would not reach transactions with Tencent unrelated to WeChat, as the order explicitly refers to “any transaction that is related to WeChat … with Tencent Holdings” or its subsidiaries.
The reason for the 45-day grace period in the executive orders appears to be the ongoing negotiations between Microsoft and ByteDance to potentially acquire a significant chunk of TikTok opera
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Read the original article: Could the TikTok and WeChat Executive Orders Undermine IEEPA?