Section 889 of the Fiscal Year 2019 NDAA is a US law aimed at safeguarding national security in the US IT industry. It prohibits federal agencies and their contractors from utilising certain telecommunications and video surveillance equipment or services from specific foreign companies or their subsidiaries.

Who does this impact?

Section 889 of the NDAA significantly impacts sectors involved in providing or using telecommunications and video surveillance equipment or services, particularly those connected to specific foreign companies.

Organistions

  • Telecommunications or video surveillance companies with ties to various foreign companies.
  • Federal agencies and contractors involved in telecommunications or video surveillance.
  • IT contractors providing services to federal agencies.

Sectors
If your business operates in sectors such as transportation, energy, health care, education, or security, relying on telecommunications and video surveillance technologies, compliance with this law is crucial to avoid potential risks or violations.

Covered equipment and services

Section 889 of the NDAA applies to a broad range of equipment and services, including routers, switches, servers, cameras, cloud computing, and software development, sourced from or connected to governments of covered foreign countries.

Considerations when contracting under section 889 of the NDAA

Federal agencies and their contractors

  • Identify, remove, and replace prohibited equipment or services.
  • Certify compliance in contracts and report instances of non-compliance.
  • Request waivers or exceptions if necessary.

Non-federal entities

  • Ensure your equipment or services do not contain covered items.
  • Disclose use to contracting partners or customers.
  • Adjust contract terms, pricing, or delivery schedules as needed.

Challenges for the IT industry

Section 889 of the NDAA poses challenges for the global supply chain, affecting a wide range of equipment and services and impacting the IT industry, especially considering the prevalence of products and components sourced from or manufactured in China.

How to comply with section 889

You can take the following steps to comply:

  1. Conduct a thorough inventory and assessment of current equipment and services.
  2. Remove and replace covered items or seek waivers for specific cases.
  3. Implement policies to prevent future use of prohibited items.
  4. Train employees on the law’s requirements.
  5. Certify compliance status and report non-compliance to authorities.
  6. Monitor and update compliance efforts as the law evolves.

Actions to take next