Deemed
Exports & Hiring Foreign Persons:
Deemed Export:
The definition of an export in both the Export Administration Regulations
(EAR) and the International Traffic in Arms Regulations (ITAR) includes
the release of technology or technical
data to a foreign person located either overseas or in the United States
(The EAR refers to this as a "deemed export"). It is “deemed” to be an
export to that person’s home country (or “countries” in the case of a dual
citizen).
A verbal or visual disclosure of controlled information, even if within a
U.S. facility, is considered an export. Therefore, a foreign person
overhearing a technical discussion about military or dual-use technology in
the cafeteria or restroom would be an illegal export unless there was a
license in place that authorized access by the foreign person to that
information.
Deemed Export Licensing:
As a general rule, a deemed export license is required for the release of
controlled information to a foreign person if the export of that information
would require a license to export to the foreign person's country of
citizenship. Controlled Information, which includes technology and technical
data, is broadly defined under the EAR and ITAR and in general covers the
specific information necessary for the "development," "production," or "use"
of a product. It also covers technical information that may be relayed in
employee technical meetings, emails, and other common interactions within a
U.S. company.
From which agency (Departments of State or Commerce) you obtain a deemed
export license will depend on the “jurisdiction”
of the controlled information being provided to that individual.
Hiring Foreign Persons:
Before making a hiring decision, you must determine the legal status of your
prospective employee. If they are a “permanent resident alien” or “green
card holder”, then they are not considered “foreign persons”
and for export control purposes can be treated as a “U.S. Person”. However,
if
they are determined to be “foreign persons”, then the business has a
number of issues to address above and beyond the visa requirements in order
to hire them.
If the determination is made that hiring a “foreign person” is the right
business decision, then the company must determine many factors before
proceeding with the employment. Factors such as:
• Identifying the exact program or product line on which the person will be
working,
• Determining exactly what technology the person will need to have access to
during the course of their employment or consulting services,
• Identifying what other technology the person might have access to during
the course of their employment,
• Determining the jurisdiction of that information,
• Coordinating with HR, Security, IT and Export Control to determine the
ramifications of your hiring decision,
• Addressing issues such as access controls, segregation of unauthorized
data, IT controls and access rights, etc…
• Getting the needed licenses in place to allow for their access to the
controlled information.
New Requirement on I-129 Visa Application
Form:
Beginning on December 23, 2010, companies using the Form I-129 to petition
for certain nonimmigrant visas to employ foreign persons in the United
States are now required to certify whether or not an export license is
required for that foreign person to perform his or her job at the company.
The addition of the export licensing certification on the Form I-129 now
makes export controls an important part of the visa petition process.
The new Form I-129 certification does not represent a change in the export
control laws, but is intended to cross reference the Visa and Export control
requirement contained in the associated U.S. Government regulations. Failure
to obtain a needed deemed export license can lead to significant
administrative fines and penalties. In addition, falsely certifying that an
export license is not required may lead to a criminal action against the
company, certifying individual, or both.
The new certification is limited to petitions for H-1B, H-1B1, L-1, or O-1
visas which are the most popular visa types for highly skilled, foreign
national employees who may hold advanced degrees from U.S. educational
institutions.
So whether you need to provide controlled information to a foreign
person, or are contemplating the hiring a foreign person in a position that
exposes them to controlled information, this is
an export control issue that requires attention. ITC Strategies is
well versed in this aspect of Trade Compliance and can assist in determining
your deemed export obligations.
