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Restrictions on data

UNITED STATES

Since 1999

Chapter Data policies  |  Sub-chapter Restrictions cross-border on data flows
Network Security Agreements
It is reported that foreign communications infrastructure providers have been asked to sign Network Security Agreements (NSAs) in order to operate in the US. These agreements ensure that U.S. government agencies have the ability to access communications data when legally requested.

The agreements reported range in date from 1999 to 2011 and involve a rotating group of government agencies including the Federal Bureau of Investigation (FBI), Department of Homeland Security (DHS), Department of Justice (DoJ), Department of Defense (DoD) and sometimes the Department of the Treasury.

According to the Washington Post, the agreements require companies to maintain what amounts to an “internal corporate cell of American citizens with government clearances” ensuring that “when U.S. government agencies seek access to the massive amounts of data flowing through their networks, the companies have systems in place to provide it securely.”

Moreover, the agreements impose local storage requirements for certain customers data as well as minimum periods of data retention for data such as billing records and access logs.
Coverage Telecommunication sector
Establishment restrictions

UNITED STATES


Chapter Bussiness mobility  |  Sub-chapter Quotas, Labour Market Tests, Limits of Stay
Code of Federal Regulations Title 8: Aliens and nationality, section 214.2(h)(ii)(D)
For contractual services suppliers (CSS), a visa is issued if there are not sufficient workers who are able, willing, qualified and available at the time of application. Depending on the circumstances of the service and service provider, and on how contractual services suppliers is to be defined, visa categories which are not subject to a needs test may be applicable.
Coverage Horizontal
Source
  • OECD: Code of Federal Regulations Title 8: Aliens and nationality, part 214.2(h)(ii)(D): http://www.uscis.gov/iframe/ilink/docView/SLB/HTML/SLB/8cfr.html
Establishment restrictions

UNITED STATES


Chapter Bussiness mobility  |  Sub-chapter Quotas, Labour Market Tests, Limits of Stay
Immigration and Nationality Act (INA), section 214(g)(1)(B)
For independent service supplier (ISS) there is a quota of 65,000. Quotas do not apply to individuals employed at an institution of higher learning or a related or affiliated nonprofit entity. For individuals who have earned a master's or higher degree from a US higher education institution, there are quotas up to a maximum of 20,000 individuals. For contractual service providers (CSS), quotas depends on the visa requirement and the service that is provided.
Coverage Horizontal
Source
  • OECD: http://www.uscis.gov/ilink/docView/SLB/HTML/SLB/0-0-0-1/0-0-0-29/0-0-0-3422/0-0-0-3594.html
Establishment restrictions

UNITED STATES

Since 1999

Chapter Competition policy  |  Sub-chapter Other restrictive practices related to competition policy
Network Security Agreements
It is reported that foreign communications infrastructure providers have been asked to sign Network Security Agreements (NSAs) in order to operate in the US. These agreements ensure that U.S. government agencies have the ability to access communications data when legally requested.

The agreements reported range in date from 1999 to 2011 and involve a rotating group of government agencies including the Federal Bureau of Investigation (FBI), Department of Homeland Security (DHS), Department of Justice (DoJ), Department of Defense (DoD) and sometimes the Department of the Treasury.

According to the Washington Post, the agreements require companies to maintain what amounts to an “internal corporate cell of American citizens with government clearances” ensuring that “when U.S. government agencies seek access to the massive amounts of data flowing through their networks, the companies have systems in place to provide it securely.”

Moreover, the agreements impose local storage requirements for certain customers data as well as minimum periods of data retention for data such as billing records and access logs.
Coverage Telecommunication sector
Establishment restrictions

UNITED STATES

Reported in 2013

Chapter Competition policy  |  Sub-chapter Competition
Antitrust enforcement
Foreign and domestic communications service suppliers have reported that dominant US telecom carriers charge high fees for wholesale access. In fact, according to a 2013 communication of the International Telecommunications Users Group, over 90% of last mile business access services in the US is controlled by incumbents, who enjoy profit margins of 60-170% - compared to the US regulator’s last authorized rate of return of just 11.25%. This is reported as a significant restriction for new entrants and prevents effective competition.
Coverage Telecommunication sector
Establishment restrictions

UNITED STATES


Chapter Competition policy  |  Sub-chapter Competition
Local Loop Unbundling
US telecommunications market is deregulated and competition rules apply. Nonetheless, in a 2015 submission to the Federal Communications Commission (FCC), the International Telecommunications Users Group has stated that over 90% of last mile business access services in the US continues to be controlled by a few incumbents.
Coverage Telecommunication sector
Establishment restrictions

UNITED STATES

Since 1976

Chapter Intellectual Property Rights  |  Sub-chapter Copyright
Copyright Act
Section 107 of Copyright Act provides that fair use for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship and research is not an infringement of copyright.
Coverage Horizontal
Establishment restrictions

UNITED STATES

Reported in 2015

Chapter Intellectual Property Rights  |  Sub-chapter Patents
US International Trade Commission's order (ITC)
The US International Trade Commission (ITC) concluded that Samsung infringes two Apple patents.
Additionally, Motorola handsets with problematic calendar app designs were blocked from the US market.

The ITC also issued an exclusion order against Apple based on a FRAND-committed patent from Samsung. This decision was subsequently overturned shortly thereafter by the White House through its US Trade Representative (USTR).

In September 2015, an appeals court granted Apple an injunction following its 2012 patent victory over Samsung saying that the “public interest strongly favors an injunction” on the use of certain phone features. If Samsung does not win an appeal, it may have to tweak the software even in recent devices such as its latest Galaxy S6.
Coverage Samsung, Apple and Motorola
Establishment restrictions

UNITED STATES


Chapter Investment  |  Sub-chapter Screening of investment and acquisitions
Federal Communications Commission (FCC) first report on the review of foreign ownership policies for common carrier licenses (2012)

National Security Review conducted by the Committee on Foreign Investment
There are several restrictions which can apply on cross-border mergers and acquisitions that are above general restrictions for competition reasons.

Section 310(a) of the Communications Act of 1934 states that a foreign government or representative may not directly hold a spectrum license.

Section 310(b)(1) and (2) state that foreign individuals and business entities may not directly hold any common carrier, broadcast or aeronautical fixed on en route licenses. Under 310(b)(3), a foreign entity is limited to a 20% ownership interest in any common carrier, broadcast or aeronautical fixed on en route licenses. Pursuant to section 310(b)(4), a foreign entity is limited to a 25% ownership interest in a US corporation that controls any common carrier, broadcast or aeronautical fixed on en route license.

The Federal Communications Commission has the discretion to allow foreign ownership in excess of 25% unless such ownership is inconsistent with the public interest.

Furthermore, CFIUS can block an acquisition based on national security considerations.
Coverage Spectrum, common carriers, broadcast and aeronautical fixed on en route licenses
Establishment restrictions

UNITED STATES

Since 2008.

Chapter Investment  |  Sub-chapter Screening of investment and acquisitions
Foreign Investment and National Security Act of 2007 (Public Law 110-49)

National Security Review conducted by the Committee on Foreign Investment
Foreign investments are subejct to approval unless contrary to national interest. The review of the Committee on Foreign Investment on National Security considerations applies to controlling investments in US businesses (it does not apply to Greenfield investments). Additionally, the Committee on Foreign Investment in the United States (CFIUS) seeks to identify and address any national security risk that arises as a result of a covered transaction and can request that the President determines whether to suspend or prohibit a covered transaction or take other action.

The list of factors for consideration by CFIUS are:
- potential effects of the transaction on the domestic production needed for projected national defense requirements;
- potential effects of the transaction on the capability and capacity of domestic industries to meet national defense requirements;
- potential effects of the transaction on U.S. international technological leadership in areas affecting U.S. national security;
- potential national security related effects on U.S. critical technologies;
- potential national security related effects of the transaction on U.S. critical infrastructure, among others.

Acquisitions blocked or delayed by CFIUS on national security grounds include the following cases:
1. In 2008, Bain Capital and Huawei Technologies withdrew their offer to acquire the network and software firm 3Com, due to the inability to successfully negotiate a mitigation agreement with CFIUS members.
2. The acquisition of Sprint Nextel by the Japanese firm SoftBank was opposed to, given the former relied on Huawei for equipment and cell tower base stations. SoftBank agreed to remove Huawei as a supplier when the acquisition was completed.
3. In 2011, some Members of the US Congress requested the Obama Administration to support a recommendation by CFIUS to block a proposed acquisition of 3Leaf Systems by Huawei Technologies over national security concerns. Given this backdrop, Huawei discontinued its efforts to acquire the firm.
Coverage SoftBank acquisition, Huawei Technologies, Bain Capital
Sources
Establishment restrictions

UNITED STATES


Chapter Investment  |  Sub-chapter Restrictions on ownership
Communications Act of 1934

Federal Communications Commission (FCC) first report on the review of foreign ownership policies for common carrier licenses (2012)
Section 310(a) of the Communications Act of 1934 states that a foreign government or representative may not directly hold a spectrum license.

Section 310(b)(1) and (2) state that foreign individuals and business entities may not directly hold any common carrier, broadcast or aeronautical fixed on en route licenses. Under 310(b)(3), a foreign entity is limited to a 20% ownership interest in any common carrier, broadcast or aeronautical fixed on en route licenses. Pursuant to section 310(b)(4), a foreign entity is limited to a 25% ownership interest in a US corporation that controls any common carrier, broadcast or aeronautical fixed on en route license.

The Federal Communications Commission has the discretion to allow foreign ownership in excess of 25% unless such ownership is inconsistent with the public interest.
Coverage Spectrum, common carriers, broadcast and aeronautical fixed on en route licenses
Fiscal Restrictions

UNITED STATES

SInce December 2012

Chapter Public Procurement  |  Sub-chapter Technology mandate
Trade Agreements Act of 1979
The Trade Agreements Act (TAA) of 1979 rules are frequently used as a barrier to the use of Free and Open Source Software (FOSS) in federal government procurement. Companies must certify compliance with the TAA, which requires a product to be manufactured or substantially transformed in the United States or a designated country.

A designated country is a country with which the U.S. has a trade agreement on government procurement or a similar arrangement. It is reported that this creates a problem bebause FOSS frequently contains routines or components whose origin is not sufficiently certain to certify compliance with these requirements.
Coverage Free and open source software (FOSS)
Fiscal Restrictions

UNITED STATES

Since April 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
WTO Government Procurement Agreement (GPA)
Although the US is a signatory to the WTO Government Procurement Agreement (GPA), its coverage schedules only partially cover telecommunication services, which is an important service sector for digital trade.
Coverage Telecommunication sector
Fiscal Restrictions

UNITED STATES

Since January 2011

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Section 5000C of the Internal Revenue Code
In 2011, the US enacted a bill that imposes a 2% tax on foreign procurement of goods and services by the Federal government. The law provides that the new tax "shall be applied in a manner consistent with United States obligations under international agreements" but that the tax will apply to procurements from "any country which is not a party to an international procurement agreement with the United States." This means that there are exemptions for FTAs partners of the United States and signatories of the WTO Government Procurement Agreement.
Coverage Horizontal
Fiscal Restrictions

UNITED STATES

Since 1933
Since 1979

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Buy American Act (BAA)

Trade Agreements Act (TAA)
The Buy American Act legislation has been in force since 1933 with the aim of ensuring domestic jobs. This legislation requires, among other things, a price preference for US suppliers. Since 2004, the Congress has exempted commercial IT products from the reach of the Buy American Act.

However, if the acquisition value of the tender is above a certain purchasing threshold, the Trade Agreements Act (TAA) applies to the tender (the threshold is mostly around 200,000 USD, but lower for selected FTAs). The TAA opens procurement markets only for products from the US or “designated countries” and prohibits procurement of end products from non-designated countries (e.g. China, India, Indonesia, Thailand).
Coverage Horizontal
Sources