Steven Mnuchin: Trump administration to conduct 'national security review' of TikTok’s proposed sale to Oracle

Chinese-owned TikTok’s fate in the United States now rests with a review by the Committee on Foreign Investment in the United States and a decision by President Trump following a purchase proposal by U.S.-based Oracle one week ahead of the ban deadline.

Treasury Secretary Steven Mnuchin confirmed on Monday that TikTok’s Beijing-based parent company, ByteDance, rejected a purchase offer from Microsoft and Walmart, which had teamed up on a proposal, but instead agreed to a proposal to sell TikTok’s U.S. operations to Oracle, a California-based multinational technology firm. Mnuchin said the U.S. government would now need to review the proposal, which remains largely secret, as the Sept. 20 deadline in Trump’s July executive order looms.

“There are two processes that we’re going through. One is the CFIUS review. The other is the national security review under the president’s executive order,” Mnuchin told CNBC’s Squawk Box on Monday. "We did get a proposal over the weekend that includes Oracle as the trusted technology partner, with Oracle making many representations for national security issues. There’s also a commitment to create TikTok Global as a U.S.-headquartered company with 20,000 new jobs ... We will be reviewing that at the CFIUS committee this week, and then, we will be making a recommendation to the president and reviewing it with him.”

Mnuchin added: “I would say ... a critical factor for us driving national security is making sure the technology on Americans’ phones is safe and making sure it is not corrupt. We have a lot of confidence in both Microsoft and Oracle. They’ve chosen Oracle. We’ll be reviewing it with their technical teams and our technical teams to see if they can make the representations we need.”

ByteDance and TikTok have repeatedly claimed that they have not and would never turn over TikTok user data to the Chinese government, but national security experts have raised concerns about China’s 2017 national intelligence law, which requires all Chinese companies to assist Chinese intelligence services when asked — and to keep it secret.

Trump’s early August executive order said that "any transaction ... subject to the jurisdiction of the United States” would be prohibited “with ByteDance … or its subsidiaries" within 45 days. The order argued that “the spread in the United States of mobile applications developed and owned by companies in the People's Republic of China,” such as TikTok, “continues to threaten the national security, foreign policy, and economy of the United States.”

Microsoft revealed Sunday that “ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft.” However, Microsoft added that “we are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

The Chinese state-run outlet China Global Television Network quickly cast doubt on any deal, citing “sources” who claimed ByteDance “will not sell TikTok's U.S. operations to Microsoft or Oracle, nor will the company give the source code to any U.S. buyers.”

Numerous U.S. government officials, including John Demers, the assistant attorney general of the National Security Division, have described that a national security threat is posed by TikTok, and the Pentagon, other government agencies, and a host of organizations have banned employees from using the app.