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US curbs WeChat transfers, limits TikTok app starting Sunday

US will prohibit cash transfers within the US related to WeChat and its parent company Tencent Holdings Ltd. Other measures prohibited as of Sept. 20 include distribution, maintenance and updates of WeChat or TikTok through app stores in the U.S.

By: Bloomberg | Updated: September 18, 2020 6:14:55 pm
US bans tiktok, us bans tiktok wechat, chinese apps tiktok wechat,U.S. national security officials are raising concerns that the data of American TikTok users would remain with a Chinese company (File Photo)

The U.S. will ban some transactions over the Chinese-owned WeChat app while prohibiting new downloads and updates of the app as well as TikTok’s app starting Sunday.

Commerce Secretary Wilbur Ross said Friday that the U.S. will prohibit cash transfers within the U.S. related to WeChat and its parent company Tencent Holdings Ltd. Other measures prohibited as of Sept. 20 include distribution, maintenance and updates of WeChat or TikTok through app stores in the U.S.

The order doesn’t apply to operations or cash transfers outside the U.S., which had been a concern of some U.S. tech companies.

“WeChat U.S., for all practical purposes, will be shut down,” Commerce Secretary Wilbur Ross said on Fox Business. Americans will still be able to use WeChat for payments in China, he said. “The basic Tiktok will stay intact until November 12,” although users won’t be able access upgrades from Sunday night, he said.

The Commerce Department also said the president has allowed until Nov. 12 for national security concerns posed by ByteDance Ltd.’s TikTok to be resolved. If they are, the prohibitions in this order may be lifted.

The Commerce restrictions place the onus on Apple Inc. and on Alphabet Inc.’s Google to delete both the Tiktok and WeChat apps from their U.S. app stores by Sept. 20. While people who already have the app on their phone won’t be impacted, the apps will be degraded over time if users can’t get access to updates.

Apple and Google didn’t respond to immediate requests for comment.

The ban could also impact U.S. companies that allow payment via WeChat, since the restrictions prohibit services through the WeChat mobile app for the purpose of transferring funds or processing payments within the U.S.

“The Chinese Communist Party (CCP) has demonstrated the means and motives to use these apps to threaten the national security, foreign policy, and the economy of the U.S,” the Department of Commerce statement said Friday as a reason for its ruling.

The Commerce Department held a number of briefings in late August with companies and lobbying groups who scurried to figure out what the potential ban could mean to their companies, according to people familiar with the matter. Some American tech firms pressed the Trump administration to let them continue to do business with the Chinese firm through their operations in Asia and to allow American citizens to use the apps there.

President Donald Trump first announced the restrictions on Aug. 6 and that details would come at the end of the 45-day timeframe laid out in that initial order.

ByteDance has been negotiating with Oracle Corp. to take a stake in a reconfigured TikTok to alleviate the president’s concerns about data on the app’s American users being exposed to China.

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