President Biden will sign an executive order Wednesday that aims to stop data brokers and other companies from selling Americans' data to organizations in adversarial foreign countries, including China and Russia.

Why it matters: This is the first time a president has attempted to clamp down on third-party sales and access to the data collected about U.S. citizens by tech, advertising and marketing companies.

• Biden's executive order also comes as Congress has struggled to pass a comprehensive data privacy law that would address what information companies can collect and sell about U.S. citizens.

What's inside: Under the order, the Department of Justice will propose a rule that will restrict and prohibit most bulk data transfers of Americans' personal information to adversarial nations and the organizations based in those countries.

• U.S. entities participating in data sales and transfers will be required to get commitments from purchasers that their sales won't end up in the hands of adversarial governments or organizations, a senior DOJ official told reporters.
• DOJ also plans to define sensitive data to include genomic data, biometric identifiers, precise geolocation data, personal health and financial data and certain data tied to "sensitive" national security matters, the official added.
• Countries of concern include China, Russia, North Korea, Iran, Cuba and Venezuela, a senior administration official told reporters.
• Only transfers that meet a certain size threshold will be subject to the new rule, the senior administration official added.

Between the lines: The Justice Department is modeling enforcement and disclosures of affected data transfers after U.S. sanctions law, the senior DOJ official said, which requires companies to monitor who they're transacting with.

Yes, but: Enforcing the executive order will still be a difficult task.

• U.S. sanctions can be evaded.
• And adversarial nations could find loopholes: It's unclear how DOJ would enforce the rule in an instance where a U.S. data broker sells to a third-party who then sells that data to an organization in an adversarial country.

The big picture: U.S. officials have long feared that nation-states are legally purchasing data about Americans that could assist in espionage and hacking campaigns.

• Data brokers collect information about people based on their online activities, including their social media activity, the advertisements they click on and more.
• Brokers then sell that data to marketers and other legitimate companies to help them target the right audience.
• But often times, governments — including U.S. spy agencies — will purchase bulk data sets from brokers, too.

What's next: The Department of Justice will soon release a draft of its proposed rule and start accepting public comments.

• DOJ plans to accept two rounds of public comments before the rule goes into effect, the agency official added.