U.S. BIS final rule prohibits transactions involving vehicle connectivity systems (VCS) with nexus to China or Russia

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today released a final rule (213 pages) addressing national security risks associated with information and communications technology and services (ICTS) in connected vehicles. The rule prohibits transactions involving vehicle connectivity system (VCS) hardware and covered software designed, developed, manufactured, or supplied by entities under the control or jurisdiction of “foreign adversaries,” specifically China and Russia.

A related BIS release (January 14, 2025) explains that the final rule:

• Establishes that hardware and software integrated into the VCS hardware and software integrated into the Automated Driving System (ADS)—i.e., systems in vehicles that allow for external connectivity and autonomous driving capabilities—present an undue and unacceptable risk to national security when designed, developed, manufactured, or supplied by persons with a sufficient nexus to China or Russia
• Applies only to passenger vehicles (defined as those under 10,001 pounds)
• Prohibits the import of VCS hardware or connected vehicles containing such hardware, and the import and sale of vehicles containing VCS or ADS software, with a sufficient nexus to China or Russia
• Prohibits manufacturers with a sufficient nexus to China or Russia from selling new connected vehicles that incorporate VCS hardware or software or ADS software in the United States, even if the vehicle was made in the United States

The restrictions concerning software will be implemented for the 2027 Model Year. Those related to hardware will be enforced starting with the 2030 Model Year, or on January 1, 2029, for units that do not have a designated model year. Additionally, bans on the sale of connected vehicles by manufacturers with significant ties to China or Russia, regardless of whether they are produced in the United States, will also commence for the 2027 Model Year.