Transcript www.tamiu.edu

Deemed Exports
Texas A&M
April 10, 2008
Alex Lopes
Director, Deemed Exports and
Electronics Division
Deemed Export Agenda
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What are deemed exports?
Key policy issues
Licensing process
Process Improvements
Path Ahead
What are “Deemed
Exports”
The Export Administration Regulations (EAR) define a deemed
export as the release of technology or source code subject to
the EAR to a foreign national in the United States. Part
734.2(b)(2)(ii).
Such release is “deemed” to be an export to the home country
of the foreign national.
Situations that can involve release of U.S technology or
software include:
- Tours of laboratories
- Foreign national employees involved in certain
research, development, and manufacturing
activities
- Foreign students or scholars conducting research
- Hosting of foreign scientist
“Deemed Export”
Concerns
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The deemed export program, in place since 1994, remains an
important mechanism to prevent the diversion of sensitive
dual use technologies to countries and end users of concern.
The deemed export program addresses two concerns:
- The vital role of foreign nationals in U.S. industry and
academia, contributing to the strength of our industrial
base and our high-technology advantage, and ultimately
our national security;
- Foreign countries seek to illegally acquire controlled U.S.
technology that could be diverted to the development of
weapons programs.
The Threat
• Dangers of illegal technology transfers are very real:
- WMD Proliferation
- Weapon Design/Manufacture
- Industrial Espionage
• US economy damaged by illegal technology transfers
The Universe of Dual Use Technology
What Technologies are Controlled
Today?
Controlled
“Use”
Subject
to Licensing *
Patents
3 technology types:
“Use”
Educational
“Production”
Published
“Development”
Not controlled
Information arising
or resulting from
fundamental research
Dual Use Technology
*
With limited exceptions, EAR
99 technology is not subject to
deemed export licensing
Deemed Export ECCNs
3B001
Semiconductor Manufacturing
Equipment (SME)
Designed for epitaxial growth
capable of producing a silicon
layer, thickness uniform to less
than +/- 2.5%, across a
distance of 200mm or more
The deemed
export rule
applies to
technology
and software
source code
3D001
Production or development
software is controlled
SME Software
3E001
SME Technology
Production or development
technology is controlled
Deemed Export ECCNs
7B001
Test, calibration or alignment
equipment specially designed for:
-Linear accelerometers used in
certain inertial nav systems
-Certain gyros and angular or
rotational accelerometers
-Certain inertial nav systems
Development or
production software
7D001
Equipment Software
-Certain altimeters
The deemed
export rule
applies to
technology
and software
source code
7E001/2/3/4
Technology
Equipment development
or production technology
Repair, refurbishing, or
overhaul technology
Recent Debate Over Deemed Export Policy
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2004: Commerce Office of Inspector General (OIG)
Report
2005-2006: BIS published three deemed export related
Federal Register Notices:
• Advanced Notice of Proposed Rulemaking
(70FR15607)
• Establishment of Advisory Committee and
Clarification of Deemed Export-Related Regulatory
Requirements (71FR29301 of 05/22/06)
• Withdrawal of the Deemed Export Advanced Notice of
Proposed Rulemaking (71FR30840 of 05/31/06)
2006-2007: Deemed Export Advisory Committee
deliberations
December 20, 2007: DEAC releases report.
Present day: BIS is reviewing ways to implement some
of the DEAC’s recommendations.
Key Policy Issues
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Citizenship of foreign nationals subject
to the Deemed Export Rule and
Country of Birth
Fundamental Research
Definition of “use” technology
Deemed Export Advisory Committee
Report of December 20, 2007
Sequence of Analysis
U.S. Citizens, Green Card Holders &
Protected Immigrants
Published
Educational Information
Patents
Fundamental Research
EAR 99
License
Exceptions
License
Foreign Nationals Not Subject
to the Deemed Export Rule
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Any foreign national is subject to the
deemed export rule except:
• A foreign national with U.S. citizenship;
• A foreign national with permanent residence
status (i.e., “Green Card” holders);
• A foreign national granted status as a
“protected individual” under 8 U.S.C.
1324b(a)(3). Protected individuals include
political refugees and political asylum holders.
Reaffirmation of Foreign National Licensing Policy
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Naturalized U.S. citizens, U.S. Legal Permanent Residents and U.S.
Asylees and Refugees are protected individuals and are not subject
to the deemed export rule.
Deemed export licensing policy for foreign nationals that are not
protected individuals (i.e., third country nationals) is based on
recently established legal permanent residence or citizenship.
• For example: A foreign national born in Iran that has
established citizenship or permanent residency in Canada
would be treated for licensing purposes as a Canadian.
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If an exporter is unable to determine a foreign national’s country
of origin for deemed export licensing, the exporter should consult
with BIS.
For deemed reexports to a foreign national of another country,
licensing is also based on the foreign national’s recently
established permanent residency or citizenship.
Country of Origin
(Permanent Residency)
Release of controlled technology to a foreign
national of one country, say India, who has
obtained permanent residency in another,
say the U.K., is treated as if the technology
transfer were being made to the U.K. and
licensing requirements would be the same as
for a British national in the U.K.
If the former Indian national becomes a
British citizen, transfers of technology
would be viewed as transfers to the
U.K.
Country of Origin
(Dual Citizenship)
As a general principle, a
foreign national’s most
recently obtained citizenship
governs the licensing
If an Indian foreign national
requirement.
becomes a citizen of the U.K.
but retains Indian citizenship, the
most recent citizenship is with
the U.K. and releases of
technology would be viewed as
releases to the U.K.
Sequence of Analysis
U.S. Citizens, Green Card Holders &
Protected Immigrants
Published
Educational Information
Patents
Fundamental Research
EAR 99
License
Exceptions
License
Scope of Fundamental Research
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“Fundamental research is basic and applied research
in science and engineering where the resulting
information is ordinarily published and shared
broadly within the scientific community.” (EAR Part
734.8)
"While the product of the fundamental research is
not subject to the EAR because the results of that
research are intended for publication and
dissemination within the scientific community,
authorization may be required if during the conduct
of the research controlled technology is released to a
foreign national.“(71FR30840 of 05/31/06)
Scope of Fundamental Research
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Fundamental research technology is not subject to
the EAR because:
• the technology that rises during or results from the research
is normally made public; and,
• the technology necessary to conduct the research is
normally obtained from public or published sources.
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If preexisting technology necessary to conduct the
research is export controlled; or, if a researcher
makes a decision to control the technology that
results from the research, then, deemed export
licensing requirements must be considered.
Universe of Research
Publicly available
technologies
x
x
(Not Subject to the EAR)
x
x
x
x
x
Preexisting Export Controlled
Technologies (Subject to the
EAR)
INPUT
x
x
x
Results of research published:
(e.g., Fundamental Research)
x
x
x
x
x
x
x
x
x x
x
(Not Subject to the EAR)
x
x
x
Results of research withheld
from publication
(Subject to the EAR)
OUTPUT
Clarification of “Use” Technology
Mere use of equipment is not a deemed export. Deemed
exports occur only if technology subject to the EAR is
transferred.
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The regulatory definition of “use” is technology for
“operation, installation (including on-site installation),
maintenance (checking), repair, overhaul and refurbishing.”
• All six attributes of the definition must be present in
order to qualify as “use” technology.
• Otherwise the technology is likely EAR99.
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This issue was the source of substantial controversy in
2004. Since BIS affirmed the conjunctive definition, this
issue has subsided in importance.
Technology Subject to the EAR
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General Technology Note
• Supplement 1 to EAR Part 774
• The term “technology” as used in the EAR refers to
specific information “required” for the “development,”
“production,” or “use” of specific product (e.g. computer,
fermenter, machine tool, etc.).
• “Required” technology refers only to that portion of
technology which is peculiarly responsible for achieving
or exceeding controlled performance levels,
characteristics or functions.
Sequence of Analysis
U.S. Citizens, Green Card Holders &
Protected Immigrants
Published
Educational Information
Patents
Fundamental Research
EAR 99
License
Exceptions
License
Available License Exceptions for
Deemed Exports
•
CIV: Civil End Use (EAR §740.5)
 Applies to deemed exports for 3E002 technology.
 Requires Foreign National Review (FNR)
•
TSR: Technology and Software Under Restriction: (EAR
§740.6)
 Applies to technology and software under national security
only for country group “B” nationals.
 Requires Letter of Assurance
•
APP: Applied Peak Performance (EAR §740.7)
 Applies to deemed exports for 4D001/4E001 software and
technology. (FNR Required)
Sequence of Analysis
U.S. Citizens, Green Card Holders &
Protected Immigrants
Published
Educational Information
Patents
Fundamental Research
EAR 99
License
Exceptions
License
Is a License Required?
Step 1:
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Determine the technologies to be
released. It is critical to classify the
technology.
• Is the technology publicly available?
• Is the technology EAR99?
• Is the technology described in an entry
on the Commerce Control List?
• If so, does a License Exception apply?
Is a License Required?
Step 2:
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Determine the home country of the
foreign national.
Technology and home country of the
foreign national determine licensing
requirements.
The Deemed Export Application
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Same as other technology exports
plus
• Detailed Letter of Explanation
• Comprehensive Bio/Resume
• Complete job description
• Safeguards to restrict access to that
approved (Technology Control Plan)
Deemed Export Evaluation Factors
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Personal background, including visa status
Technology and purpose of the release
Applicant’s Technology Control Plan (TCP)
Projected outcome of employment (becoming
U.S. citizen)
Permanent employee
Applications are easier to approve if they
include details such as:
• Any strong ties to the U.S. (e.g., family here)
• No ties to home country (no bank account, immediate
family, etc.)
• Any special benefits or expertise the foreign national
brings to the applicant (i.e., why the foreign national
brings more to the company than he or she will take
away)
Letter of Explanation
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Identities of all parties to the transaction
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Exact project location (where the technology or
software will be used)
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Type of technology and scope
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Availability abroad of comparable foreign
technology or software
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Form in which the technology will be released and
the uses for which the technology will be employed.
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Applicant’s internal technology control plan
Foreign National’s Resumé
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All educational institutions attended beyond high
school, with street addresses and degrees and/or
certificates received.
All positions held, with employers’ names and street
addresses, and brief description of work done.
All time from high school graduation should be
accounted for and presented in month/year format,
with no gaps greater than 30 consecutive days.
Brief abstracts of all scientific and technical papers
published, and presentations at scientific and
technical conferences.
Helpful Information
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Applications are easier to approve if
they include details such as:
• Any strong ties to the U.S. (e.g., family
here)
• No ties to home country (no bank account,
immediate family, etc.)
• Any special benefits or expertise the foreign
national brings to the applicant (i.e., why
the foreign national brings more to the
company than he or she will take away)
Technology Control Plan (TCP)
•
•
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TCPs are a standard condition found in deemed
export and technology exports licenses
A TCP should contain the following essential
elements:
• Corporate commitment to export compliance
• Physical security plan
• Information security plan
• Personnel screening procedures
• Training and awareness program
• Self evaluation program
TCPs are a good practice for all holders of export
controlled technology
Process Improvements
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The following process improvements
have been in place since January
2004
• Deemed export license validity aligned
with visa
• Six month extension provided for
licenses being renewed
• Twenty day turnaround on upgrade
license applications
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Details on the BIS Website
The Path Ahead
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Address DEAC recommendations
Ongoing Efforts
• Creation of Emerging Technology and
Research Advisory Committee
• Intracompany License Exception
Proposal
• CCL Review
• Expanded deemed export outreach
• Notice of Inquiry regarding foreign
national country of affiliation
Deemed Export Contacts
Alexander Lopes
Director, Deemed Exports and
Electronics Division
Ph: 202-482- 4875
E-mail: [email protected]
Ilona Shtrom
Senior Export Policy Analyst
Ph: 202-482-3235
E-mail: [email protected]
Kurt Franz
Senior Export Policy Analyst
Ph: 202-482-2278
E-mail: [email protected]
Robert Juste
Senior Electrical Engineer
Ph: 202-482-8245
E-mail: [email protected]