BACKGROUND PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON AN EXECUTIVE ORDER TO ADDRESS THREATS POSED BY APPLICATIONS AND SOFTWARE DEVELOPED BY CHINESE COMPANIES
6:36 P.M. EST
SENIOR ADMINISTRATION OFFICIAL: Good evening, everyone, and thanks for joining the call with short notice. I really appreciate it. You’ve probably seen the EO already, and so tonight we’ve got two officials from the NSC on to talk about the EO that was signed on the threats posed by software developed or controlled by Chinese companies.
This call is on background, which means that quotes used from officials on this call must be attributed to a “senior administration official” or “senior administration officials.”
Having said that, I’ll introduce who’s on the call, just for your reference. We will have brief comments at the top and then open things up to Q&A.
The participants for the call are [senior administration officials].
So, with that, we will get started, and I’ll turn it over to [senior administration official] first, and we anticipate just having [senior administration official] give comments, and then we will have questions after that, respecting everyone’s time.
Thank you very much.
SENIOR ADMINISTRATION OFFICIAL: Thanks so much for joining us. And as [senior administration official] said, I’m [senior administration official] here at the National Security Council.
So, assuming that folks have seen or are looking at the EO, we’ll kind of keep it brief upfront, and then we’ll open it up to some questions. So, just in a couple of minutes, we want to make it clear -- and I think the executive order that you’re looking at makes it clear -- that the President has no higher priority than the safety and security of the American people.
This executive order addresses a continuing and, really, a growing, over the last years, threat that’s posed by the Chinese Communist Party and, in this particular case, through Chinese software applications.
By accessing our personal electronic devices, such as smartphones, tablets, even computers, connected software applicants can and often do access and capture vast amounts of information from the users of those devices. Oftentimes that can be, as we all know, sensitive personally identifiable information or just sort of private or privileged information.
We understand that this could provide the government of the PRC and really, frankly, the Chinese Communist Party with access to information that they can then exploit against the United States -- either our government or individuals or businesses and other entities here in America.
I think we’re all aware that Beijing requires, really, all commercial companies, no matter how large or small, to support the Chinese Communist Party’s political objectives. We’ve seen recently from Chinese regulators that they’ve demonstrated just this -- in the case of news, for example, about Alibaba or even the Ant Group. And there are other examples, obviously, cropping up really almost every week.
So I think everyone is also aware that the CCP -- the Chinese Communist Party’s mil-civ fusion strategy explicitly aims to either co-opt or, in cases, even coerce civilian enterprises into assisting with modernization and development of the People’s Liberation Army. We don’t think necessarily that, you know, Americans’ sensitive information and data, either from companies or individuals, should be contributing to that cause.
This executive order tasks the Secretary of Commerce to identify prohibited transactions involving eight named Chinese software applications. Three of those eight are actually payment services, as you probably noticed. And this tasking to the Secretary of Commerce is generally similar to what was passed in the two August executive orders that implicated WeChat and TikTok.
This executive order today, though, that the President signed also does two other things. It directs the Secretary to identify and take appropriate actions against other software applications -- so, beyond the 8 -- and now, really, 10 that have been named -- and to take, you know -- as we said, take appropriate action to get those; and also to make recommendations on how the United States should develop a program to control the export of U.S. personal identifiable or U.S. user data, generally in the bulk form, to foreign adversaries.
So, again, you know, this administration and the President has for the last four years and will continue to prioritize the safety and security of the U.S. homeland and the American people.
And with that, we’ll open it up to some questions.
SENIOR ADMINISTRATION OFFICIAL: So, actually, before we open it up, actually -- so, once again, we’ve got [senior administration official] here, as well as [senior administration official]. But thank you for that.
So, Operator, we will now open it up for a few questions. The Operator is going to identify your line number, so you will know what line is opened up. And then if you could please identify yourself and your outlet before asking your question, and then it’ll go on mute at that point.
So we’ll take as many questions as we can, respecting everyone’s time. Go ahead with questions please, Operator.
Q Thank you. This is Steven Overly from Politico. I wanted to ask a question. The executive order that -- or the two executive orders from August targeting WeChat and TikTok were heard by the courts and have been temporarily paused. I wondered if you might comment on whether this executive order could see a similar fate in the courts or whether you’re pursuing things differently this time. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Hey, Steven. That’s a great question. So, we continue to believe that those two executive orders are obviously valid and should be implemented, and we continue to fight that battle, if you will, in the courts. And, obviously, we sincerely hope and expect to win that.
And so that doesn’t prejudice our decisions going forward or that our opinion on how that should turn out does, you know, influence what we’re doing in the sense that we’re going to continue to take the right action.
I will say that those injunctions -- and I would defer you to DOJ for confirmation, but our belief is that those injunctions -- and this is public information -- are being blocked under a First Amendment clause within IEEPA, and they are probably more closely tied to social media applications in that sense. And that particular case would probably not be easily brought against some of these other applications that we’ve named today.
Q Alex Alper with Reuters. I just wanted to ask about the types of transactions that you envision the Commerce Department blocking. Would this include, you know, payment to employees? Or would it really just be about the companies that, like, host the apps on phones? Would it be the users? Who do you see as affected by it, and what sorts of transactions would you like to see banned?
SENIOR ADMINISTRATION OFFICIAL: Hey, Alex. So I think the best expectations that we would have -- at least, you know, right now, before final decisions are made -- is that it would look a lot like what you saw the Commerce regulatory framework that was published to implement those August 6th executive orders on TikTok and WeChat.
And so, you know, to answer the specific question: No, it would not target employees. We do not expect that at this time.
SENIOR ADMINISTRATION OFFICIAL: Thank you, Operator. And thanks, Alex. Operator, we’ll go ahead and take the next question please.
Q Hey, guys. This is Justin Sink at Bloomberg. I was wondering if you could talk about the 45-day timeline on the executive order. Obviously, that pushes things into the next administration. And without getting sidetracked on that, I’m wondering if there’s any expectation that you could accelerate that at all, or if not, how or if you expect the incoming administration to, sort of, handle this now that you guys have set it out.
SENIOR ADMINISTRATION OFFICIAL: Hey, thanks for that question. So there was really no consideration given to, you know, attempt to accelerate on anything. We think 45 days is the appropriate timeline for implementation, just as you saw with the August EOs. And, really, the question of if and when anything would change would probably be appropriate for that next administration.
SENIOR ADMINISTRATION OFFICIAL: Thank you, Operator. We’ll go ahead and take the next question.
Q Hi, there. This is Owen Churchill with the South China Morning Post. Thanks a lot for the briefing. I just have a couple of very quick questions. The first: I’m wondering if you could elaborate on how you came to focus in on these particular eight companies, whether you have any kind of specific evidence of U.S. -- individual states that are being used for, you know, the kind of malignant purposes that you outlined at the top.
And then, secondly, I just wanted to follow up on a prior question. Would this cover individual transactions? For example, a user of WeChat Pay just sending money to another contact through the app. Would that be covered under this? Thank you.
SENIOR ADMINISTRATION OFFICIAL: So, on the first question, the software applications that were chosen were largely chosen based on risk. We cannot get into whether and what type of information we may or may not have regarding specific applications, you know, that -- and what other nefarious or otherwise activity is being done by some of these companies. But what the executive order is based on is it’s based on risk.
And so I think what you’ll find, if you look up some of these apps, is they all have extremely high numbers of users/download. And that means to us that they are found on extremely large numbers. You know, we’re talking tens of millions of devices. And, you know, the mass collection of information and data going into, you know, PRC, whatever government department, AI algorithms, or what have you -- the potential for that is what we’re talking about: the risk.
SENIOR ADMINISTRATION OFFICIAL: Operator, we’ll go ahead and take the next question.
Q Hi, it’s Stephanie Dhue with CNBC. Thanks for the call. So, what information changed to cause the administration to do this now versus earlier in the process? What informed your timing?
SENIOR ADMINISTRATION OFFICIAL: So, I can tell you that a lot -- like, a lot of the actions that this administration has embarked on in our, you know, general strategic competition with China are probably late. But better late than never in the sense that, you know, maybe late that they should’ve been done, you know, in a prior -- years ago.
And so we’re -- we’ve had a lot of catching up to do. And I think if you look at the record that we’ve been actually quite busy. And so I wouldn’t say the timing is any particular -- I wouldn’t try to tie it to, you know, the end of -- or potential end of an administration or anything like that. I think we just need to look at the overall threat to the American people, and, you know, that we’re going to take some actions to counter that threat.
SENIOR ADMINISTRATION OFFICIAL: Operator, we’ll go ahead and take three more questions.
Q Hi, Bobby Allyn here with NPR. Thanks for taking my question. So, as it’s been noted, you know, the previous EO back in August targeting WeChat -- with that halted in the Court, I’m why there is another -- you know, another attempt here to go after WeChat and not ByteDance, which is TikTok’s owner, because ByteDance has been making moves in the e-payment world, and there’s been talk of TikTok even developing some kind of e-payment service. So I’m wondering why ByteDance wasn’t among the Chinese companies listed in this EO.
SENIOR ADMINISTRATION OFFICIAL: So, thank you for your question. It’s a great question. One of the items that obviously we’re looking at, and one of the pieces that is in this executive order, is for the Secretary of Commerce to continue to review and assess applications related -- and related companies that would be appropriate for further action.
So, that -- this is an evolutionary process as we continue to assess a wide range of risks to national security and take appropriate action as we work through these different issues.
SENIOR ADMINISTRATION OFFICIAL: Great. Two more -- two more questions, Operator.
Q Hi, this is Brett Fortnam with Inside U.S. Trade. In terms of the transition, have you communicated with the Biden team about this order and this -- actually, since that 45-day timeline is going to go past January 20th? Has there been any question on how that order will be carried out?
SENIOR ADMINISTRATION OFFICIAL: The potential transition activity with the possible incoming Biden administration does not involve -- that is just potential transition-related activity through GSA, and it does not cover this EO.
Operator, we’ll go ahead and take one last question.
Q Hi, Dave Perera from MLex. Thank you so much for taking my question. I wonder if you can elaborate a little bit on the national security risks at hand here. The executive order, for example, cites the hacks of OPM and the hack of Anthem at the behest of Chinese hacking groups. But I suppose you're not intimating that these apps are hacking into the devices of their users. So there's no hacking going on here. What's the national security risk?
SENIOR ADMINISTRATION OFFICIAL: Hi, Dave. Thanks. And it’s a great question. I'm glad you asked it. And what we’re really talking about here is the risks of giving exabytes of data, really granular data on the American people and people trusting the American, you know, commercial infrastructure with really sensitive information and handing that over to a totalitarian, fascist, technology-enabled dictatorship run by the Chinese Communist Party.
And if you look at what that totalitarian, fascist, technology-enabled communist dictatorship does, it uses mass amounts of information in order to control and oppress its people. It oppresses -- it uses that data to oppress the Uighurs. It uses that data to oppress the people of Hong Kong. And it’s using that data to try and oppress peoples outside of Chinese geographic perimeter today in various countries.
And what we’re trying to do is articulate to the world and then take concrete steps here in the United States to stop the encroachment of China’s big-data strategy here in the United States and prevent the data of the American people and of their, you know, intimate information -- photos off of their phones, text messages, phone calls to their parents; maybe those parents are abroad, et cetera, et cetera -- from being fed into this mass tool for global oppression.
And so, you know, when you look at these applications, and when you look at the direction given to the Secretary of Commerce, what you see is one step among many that the President has taken over the past four years to fight back against that digital totalitarianism. And here what we’re doing is blocking the transfer of really sensitive information from the American people and for people using American telecommunications networks and technologies from just being funneled into these terrifying databases that, as we see, they apply to more and more people every day.
And so, you know, I think it really -- I think every American ought to look at what these apps seek to do. It’s just -- you know, there's a lot of it here in these materials, in terms of what happens when you allow these applications to gain access to your phone, what information they pass back, essentially to the Chinese Communist Party, to people that are by law -- by Chinese law required to comply with the secret directives of the Chinese Communist Party.
And, I mean, it’s really terrifying. And not only is it terrifying, but it’s illiberal. Right? It essentially feeds them tools of mass oppression for billions of people worldwide. And we’re just not interested in facilitating that.
SENIOR ADMINISTRATION OFFICIAL: Great. Thanks very much, [senior administration official], and thanks, [senior administration official], for your answers.
And thanks, everyone, for participating here this evening.
Once again, just as a reminder, the ground rules that we stated at the top of the call: This is on background, attributed to a “senior administration official” or “senior administration officials.”
Thanks again, everyone. And if you have other questions, please go ahead and email us through the NSC Press distro. Thank you, Operator.
END 6:58 P.M. EST