The United States (U.S) Department of Commerce has released a press statement on its website banning a number of transactions with two Chinese companies from the country.
In the statement titled “Commerce Department Prohibits WeChat and TikTok Transactions to Protect the National Security of the United States”, the US has resolved to ban transactions with two Chinese companies Tik Tok and WeChat which it says is in response to the 6th August 2020 executive order in which the country’s president Donald Trump branded the companies threats to the national security.
According to the statement, these following transactions are prohibited starting 20th September 2020, this Sunday.
“Any provision of service to distribute and maintain the WeChat or mobile applications, constituent code, or application updates through an online mobile application store in the U.S” and “any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payment within the U.S” it reads highlighting transactions that involve downloading of the applications from app stores of any third party sources.
The other banned transactions with varying dates of commencement include 1) any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S, 2) any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S, 3) Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S and 4) any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.
The above are effective starting 20th September for WeChat, and starting 12th November for Tik Tok. The extension of the Tik Tok ban has been interpreted by Eamon Javers, a Washington Correspondent for CNBC covering the white house on his Twitter, as intended to “…allow Trump to avoid a massive backlash from users before voting” probably because of millions of users, about 100 million use the app on a daily.
However, the statement states that the extension for Tik Tok is to allow for the national security concerns posed by Tik Tok to be resolved. That resolution most likely includes the forced sale directive by Trump requiring that Tik Tok’s owner Bytedance sale the company’s US operations to a US company.
A suspect arrangement has already been announced in which the company instead of an outright sale announced that it will be partnering with Oracle, after rejecting a purchase offer by Microsoft. The new arrangement awaits the approval of the White House. It is possible that once approved, the new announced ban might be lifted, but already there are signs that it would be rejected as the president expressed his discontent with the arrangement. In the statement, the department also reserves the right to ban any other transactions as may be spelled out in the future, alongside any other measures that may be added should Tik Tok or other businesses try to indirectly offer those banned tra