Regarding the Acquisition of Musical.ly by ByteDance Ltd.
| Published date | 19 August 2020 |
| Citation | 85 FR 51297 |
| Record Number | 2020-18360 |
| Section | Presidential Documents |
| Court | Executive Office Of The President |
Federal Register, Volume 85 Issue 161 (Wednesday, August 19, 2020)
[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Presidential Documents]
[Pages 51297-51299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18360]
Presidential Documents
Federal Register / Vol. 85, No. 161 / Wednesday, August 19, 2020 /
Presidential Documents
[[Page 51297]]
Order of August 14, 2020
Regarding the Acquisition of Musical.ly by
ByteDance Ltd.
By the authority vested in me as President by the
Constitution and the laws of the United States of
America, including section 721 of the Defense
Production Act of 1950, as amended (section 721), 50
U.S.C. 4565, it is hereby ordered as follows:
Section 1. Findings. (a) There is credible evidence
that leads me to believe that ByteDance Ltd., an
exempted company with limited liability incorporated
under the laws of the Cayman Islands (``ByteDance''),
through acquiring all interests in musical.ly, an
exempted company with limited liability incorporated
under the laws of the Cayman Islands (``Musical.ly''),
might take action that threatens to impair the national
security of the United States. As a result of the
acquisition, ByteDance merged its TikTok application
with Musical.ly's social media application and created
a single integrated social media application; and
(b) Provisions of law, other than section 721 and
the International Emergency Economic Powers Act (50
U.S.C. 1701 et seq.), do not, in my judgment, provide
adequate and appropriate authority for me to protect
the national security in this matter.
Sec. 2. Actions Ordered and Authorized. On the basis of
the findings set forth in section 1 of this order,
considering the factors described in subsection (f) of
section 721, as appropriate, and pursuant to my
authority under applicable law, including section 721,
I hereby order that:
(a) The transaction resulting in the acquisition by
ByteDance of Musical.ly, to the extent that Musical.ly
or any of its assets is used in furtherance or support
of, or relating to, Musical.ly's activities in
interstate commerce in the United States (``Musical.ly
in the United States''), is hereby prohibited, and
ownership by ByteDance of any interest in Musical.ly in
the United States, whether effected directly or
indirectly through ByteDance, or through ByteDance's
subsidiaries, affiliates, or Chinese shareholders, is
also prohibited.
(b) In order to effectuate this order, not later
than 90 days after the date of this order, unless such
date is extended for a period not to exceed 30 days, on
such written conditions as the Committee on Foreign
Investment in the United States (CFIUS) may impose,
ByteDance, its subsidiaries, affiliates, and Chinese
shareholders, shall divest all interests and rights in:
(i) any tangible or intangible assets or property, wherever located, used
to enable or support ByteDance's operation of the TikTok application in the
United States, as determined by the Committee; and
(ii) any data obtained or derived from TikTok application or Musical.ly
application users in the United States. Immediately upon divestment,
ByteDance shall certify in writing to CFIUS that all steps necessary to
fully and permanently effectuate the actions required under sections 2(a)
and 2(b) have been completed.
(c) Immediately upon divestment, ByteDance shall
certify in writing to CFIUS that it has destroyed all
data that it is required to divest pursuant to section
2(b)(ii), as well as all copies of such data wherever
located, and CFIUS is authorized to require auditing of
ByteDance on terms it deems appropriate in order to
ensure that such destruction of data is complete.
(d) ByteDance shall not complete a sale or transfer
under section 2(b) to any third party:
[[Page 51298]]
(i) until ByteDance notifies CFIUS in writing of the intended recipient or
buyer; and
(ii) unless 10 business days have passed from the notification in section
2(d)(i) and CFIUS has not issued an objection to ByteDance. Among the
factors CFIUS may consider in reviewing the proposed sale or transfer are
whether the buyer or transferee: is a U.S. citizen or is owned by U.S.
citizens; has or has had a direct or indirect contractual, financial,
familial, employment, or other close and continuous relationship with
ByteDance, or its officers, employees, or shareholders; and can demonstrate
a willingness and ability to support compliance with this order. In
addition, CFIUS may consider whether the proposed sale or transfer would
threaten to impair the national security of the United States or undermine
the purpose of this order, and whether the sale effectuates, to CFIUS's
satisfaction and in its discretion, a complete divestment of all tangible
or intangible assets or property, wherever located, used to enable or
support the operation of the TikTok application in the United States.
(e) From the date of this order until ByteDance
provides a certification of divestment to CFIUS
pursuant to section 2(b), ByteDance and TikTok Inc., a
Delaware corporation, shall certify to CFIUS on a
weekly basis that they are in compliance with this
order and include a description of efforts to divest
the interests and rights described in section 2(b) and
a timeline for projected completion of remaining
actions.
(f) Any transaction or other device entered into or
employed for the purpose of, or with the effect of,
evading or circumventing this order is prohibited.
(g) Without limitation on the exercise of authority
by any agency under other provisions of law, and until
such time as the divestment is completed and verified
to the satisfaction of CFIUS, CFIUS is authorized to
implement measures it deems necessary and appropriate
to verify compliance with this order and to ensure that
the operations of the TikTok application are carried
out in such a manner as to ensure protection of the
national security interests of the United States. Such
measures may include the following: on reasonable
notice to ByteDance and TikTok Inc., employees of the
United States Government, as designated by CFIUS, shall
be permitted access, for purposes of verifying
compliance with this order, to all premises and
facilities of ByteDance and TikTok Inc., and any of
their respective subsidiaries, operated in furtherance
of the TikTok application located in the United States:
(i) to inspect and copy any books, ledgers, accounts, correspondence,
memoranda, and other records and documents in the possession or under the
control of ByteDance or TikTok Inc., or any of their respective
subsidiaries, that concern any matter relating to this order;
(ii) to inspect or audit any information systems, networks, hardware,
software, data, communications, or property in the possession or under the
control of ByteDance or TikTok Inc., or any of their respective
subsidiaries; and
(iii) to interview officers, employees, or agents of ByteDance or TikTok
Inc., or any of their respective subsidiaries, concerning any matter
relating to this order. CFIUS shall conclude its verification procedures
within 90 days after the certification of divestment is provided to CFIUS
pursuant to subsection (b) of this section.
(h) If any provision of this order, or the
application of any provision to any person or
circumstances, is held to be invalid, the remainder of
this order and the application of its other provisions
to any other persons or circumstances shall not be
affected thereby. If any provision of this order, or
the application of any provision to any person of
circumstances, is held to be invalid because of the
lack of certain procedural requirements, the relevant
executive branch officials shall implement those
procedural requirements.
[[Page 51299]]
(i) The Attorney General is authorized to take any
steps necessary to enforce this order.
Sec. 3. Reservation. I hereby reserve my authority to
issue further orders with respect to ByteDance,
Musical.ly, Musical.ly in the United States, and TikTok
Inc. as shall in my judgment be necessary to protect
the national security.
Sec. 4. Publication and Transmittal. (a) This order
shall be published in the Federal Register.
(b) I hereby direct the Secretary of the Treasury
to transmit a copy of this order to the appropriate
parties named in section 1 of this order.
(Presidential Sig.)
THE WHITE HOUSE,
August 14, 2020.
[FR Doc. 2020-18360
Filed 8-18-20; 11:15 am]
Billing code 3295-F0-P
