Transcript BIS DEEMED EXPORT PROGRAM

Licensing of Intangible
Transfers of Technology
John Sonderman
Office of Export Enforcement
Bureau of Industry and Security
U.S. Department of Commerce
Issue
• Should intangible technology transfers be
regulated?
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If the answer is yes: Procedures are needed for incountry transfers of controlled technology to prevent
unauthorized export or diversion
• Can in-country transfers be regulated?
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U.S. “deemed” export rule
U.S. deemed reexport rule
Controlling Intangible Technology Transfer
• Regulating the in-country transfer of
controlled technology is a viable means to
control intangible technology transfer
• Problems:
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Large number of foreign nationals in the domestic
high technology work force
Mobile and transient work force
Global networks and economies that operate
around the clock
Complicated by non-traditional, intangible
methods of transfer
What is a deemed export?
• Release in the United States of
technology or source code subject to
export control regulations to a foreign
national
• Such release is “deemed” to be an
export to the home country or countries
of the foreign national
Exempt from the Deemed Export Rule
• Any foreign national is subject to the
deemed export rule except:
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Foreign nationals granted U.S. citizenship;
Foreign nationals granted permanent
residence status; or,
Foreign nationals granted political refugee
status or political asylum.
What is a deemed reexport?
• Release of technology or source code subject
to export control regulations to a foreign
national of another country is a deemed
reexport to the home country of that foreign
national
• Deemed reexport does not apply to persons
lawfully admitted for permanent residence
Examples of Deemed Export Releases
 Visit of foreign delegations for company internal
technical conferences.
 Visual inspection (as reading technical
specifications, plans, blueprints, etc.) by foreign
nationals.
 Providing technical assistance (including verbal
exchanges) to foreign nationals.
Deemed Export Evaluation Factors
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Personal background, including visa status
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Technology and purpose of the release
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Applicant’s Technology Control Program
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Projected outcome of employment
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Permanent employee
Required Information:
Letter of Explanation
• Identities of all parties to the transaction
• Exact project location (where the technology or
software will be used)
• Type of technology
• Form in which the technology will be released and
the uses for which the technology will be employed.
• Technical scope
• Availability abroad of comparable foreign technology
or software
• Applicant’s technology control plan
Additional Helpful Information
• Applications need to also include details such as:
• Any strong ties to the U.S. (e.g., family here)
• Remaining ties to home country (bank account,
immediate family, property, 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
• A Technology Control Plan must be in place with
the following essential elements:
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Corporate commitment to export compliance
Physical security plan
Information security plan
Procedural security
Personnel screening procedures
Training and awareness program for ALL employees
Self evaluation program
Deemed Export Issues
• Lack of awareness among exporters to deemed
export requirements
• Large number of foreign nationals entering the U.S.
work force since end of the Cold War
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Almost 50 % of graduates from U.S. universities in advanced
science and engineering
Need a balance between providing opportunities and
potential for diversion of advanced technology
• Non-traditional sectors need to be addressed
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University research
Government entities involved in research
Certain industry sectors
Outreach
• Education and outreach has been key to raising
industry level of awareness to in-country transfer
requirements
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Start by targeting sectors of concern
Use different venues
Include site visits
• Outreach needs to include relevant government
agencies involved in the process
• Outreach helps licensing processes
• Aids in the development of “best practices”
Technology Control Plan
Summary
• Export control requirement for in-country transfers is
feasible from both a regulatory and practical
perspective
• A Technology Control Plan is an effective tool in
managing access and preventing unauthorized
disclosure
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Including intangible technology transfer
• Key to compliance is outreach and education
• Important to consider measures for control of incountry transfers to insure that employment of
foreign nationals do not provide a “back door” for the
diversion of controlled technology