Executive Order 13943 of August 6, 2020, Addressing the Threat Posed by WeChat, and Taking Additional Steps To Address the National Emergency With Respect to the Information and Communications Technology and Services Supply Chain. Published in the Federal Register at 85 FR 48641 (August 11, 2020).

WeChat is a messaging, social media, and electronic payment application owned by the Chinese company Tencent Holdings Ltd. WeChat is like China’s version of Twitter, Instagram, and PayPal all in one. Chinese students and scholars use it while in the United States to communicate with family, friends, and colleagues back home, and U.S. colleges and universities also use it to communicate with Chinese students and their families.

Executive Order 13943 Section 1.a. sets up authority to prohibit "any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce." Section 1.c. requires the Secretary of Commerce to identify the specific transactions that will be subject to the general prohibition by September 20, 2020. Section 2.a. also prohibits "any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order..."

Developments

Lawsuit: On September 19, 2020, the judge in the case “U.S. WeChat Users Alliance et al,” case # 3:20-cv-05910, granted the plaintiffs motion for a nationwide preliminary injunction. "The court grants the plaintiffs’ motion for a nationwide injunction against the implementation of Executive Order 13,943 (limited to the Secretary of Commerce’s Identification of Prohibited Transactions 1 through 6)."... "The court grants the motion on the ground that the plaintiffs have shown serious questions going to the merits of the First Amendment claim, the balance of hardships tips in the plaintiffs’ favor, and the plaintiffs establish sufficiently the other elements for preliminary-injunctive relief." The “U.S. WeChat Users Alliance et al" case was filed in federal court on August 21, 2020, and asked for a preliminary injunction to stop implementation of Executive Order 13943.

Secretary of Commerce's Transaction List: On September 18, 2020, a public inspection copy of the Secretary's list of prohibited transactions was made available. The notice is scheduled to be published in the Federal Register on September 22, 2020, but would be effective on September 20, 2020. However, the nationwide preliminary injunction in the case “U.S. WeChat Users Alliance et al,” Case # 3:20-cv-05910, temporarily blocks implementation of the Secretary of Commerce’s Identification of Prohibited Transactions 1 through 6, as listed below.

"... the Secretary identifies the following transactions that are prohibited, effective as of September 20, 2020: Any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, involving:

  1. Any provision of services to distribute or maintain the WeChat mobile application, constituent code, or mobile application updates through an online mobile application store, or any online marketplace where mobile users within the land or maritime borders of the United States and its territories may download or update applications for use on their mobile devices;
  2. Any provision of internet hosting services enabling the functioning or optimization of the WeChat mobile application, within the land and maritime borders of the United States and its territories;
  3. Any provision of content delivery services enabling the functioning or optimization of the WeChat mobile application, within the land and maritime borders of the United States and its territories;
  4. Any provision of directly contracted or arranged internet transit or peering services enabling the functioning or optimization of the WeChat mobile application, within the land and maritime borders of the United States and its territories;
  5. Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments to or from parties within the land or maritime borders of the United States and its territories;
  6. 6. Any utilization of the WeChat mobile application's constituent code, functions, or services in the functioning of software or services developed and/or accessible within the land and maritime borders of the United States and its territories; or
  7. Any other transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd., or any subsidiary of that entity, as may be identified at a future date under the authority delegated under Executive Order 13943.

The identified prohibitions herein only apply to the parties to business-to-business transactions, and apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to Executive Order 13943, and notwithstanding any contract entered into or any license or permit granted before the date of Executive Order 13943. Any other transaction with Tencent Holdings Ltd. or its subsidiaries is permitted under Executive Order 13943, as implemented by the Secretary, unless identified as prohibited or otherwise contrary to law.

These identified prohibitions do not apply to:

  1. Payment of wages, salaries, and benefit packages to employees or contractors;
  2. The exchange between or among WeChat mobile application users of personal or business information using the WeChat mobile application, to include the transferring and receiving of funds;
  3. Activities related to mobile applications intended for distribution, installation or use outside of the United States by any person, including but not limited to any person subject to U.S. jurisdiction, and all ancillary activities, including activities performed by any U.S. person, which are ordinarily incident to, and necessary for, the distribution, installation, and use of mobile applications outside of the United States; or
  4. The storing of WeChat mobile application user data in the United States."

NAFSA note: The Secretary of Commerce's transaction list includes measures that target businesses that facilitate the downloading and support of the WeChat app starting September 20, 2020 (such as app stores). Companies likewise cannot provide WeChat software updates or security patches for apps already downloaded.  However, the Secretary's identification of transactions also clearly states that for end users who already have the app, "The exchange between or among WeChat mobile application users of personal or business information using the WeChat mobile application, to include the transferring and receiving of funds," is not prohibited. This is consistent with a letter from the Department of Justice to the plaintiffs' attorneys that was entered as an exhibit in the case asserted that "we can provide assurances that the Secretary does not intend to take actions that would target persons or groups whose only connection with WeChat is their use or downloading of the app to convey personal or business information between users,or otherwise define the relevant transactions in such a way that would impose criminal or civil liability on such users. In other words, while use of the app for such communications could be directly or indirectly impaired through measures targeted at other transactions, use and downloading of the app for this limited purpose will not be a defined transaction,and such users will not be targeted or subject to penalties." Regardless, the nationwide preliminary injunction in the case “U.S. WeChat Users Alliance et al" temporarily blocks implementation of the Secretary of Commerce’s list of prohibited transactions.

NAFSA note: A related Secretary of Commerce determination regarding TikTok will be issued on September 22, 2020 to implement Executive Order 13942 of August 6, 2020 restricting the TikTok video-sharing app owned by the Chinese company ByteDance Ltd.