Deemed Exports
BIS Seeks Comments on Deemed Export Advisory Committee Recommendations
05/20/08 10:28 PM
On May
19, 2008, the Bureau of Industry and Security
(BIS) published a
notice in the Federal Register seeking public
comments on the Deemed Export Advisory Committee
(DEAC) Recommendations. Specifically, BIS is
seeking comments on whether the scope of
technologies on the Commerce Control List that
are subject to deemed export licensing
requirements should be narrowed, and if so,
which technologies should be subject to deemed
export licensing requirements. In addition, BIS
is seeking comments on whether a more
comprehensive set of criteria should be used to
assess country affiliation for foreign nationals
with respect to deemed exports.
Comments must be received no later than August 18, 2008. The DEAC report may be accessed here.
Comments must be received no later than August 18, 2008. The DEAC report may be accessed here.
Chinese Grad Student Involvement Leads to Criminal Case: Physicist Pleads Guilty to ITAR Violation
04/16/08 01:08 AM
On
April 15, 2008, the Department of Justice
announced that Daniel Max
Sherman, a physicist who formerly worked as the
director of plasma research at Atmospheric Glow
Technologies, Inc., a Knoxville, Tennessee based
company. According the to plea agreement,
between January 2004 and May 2006, Sherman and
J. Reece Roth, a Professor Emeritus at the
University of Tennessee, engaged in a conspiracy
to transmit export controlled technical data
related to a restricted U.S. Air Force contract
to develop plasma actuators for munitions-type
Unmanned Aerial Vehicle (UAV) or "drones", to a
foreign national from the People's Republic of
China.
The Chinese national was a graduate research assistant at the University of Tennessee. The DOJ reported that the University of Tennessee was victimized by the conspirators and cooperated throughout the FBI-led investigation.
Mr. Roth has not been charged in the case. The investigation of Mr. Roth has been watched closely by those in academics since May 2006 when it was reported that Customs agents copied his laptop as he returned from a trip to China and that search warrants were executed at his office and laboratory. University officials who monitor export control compliance believe that the Tennessee case may have arisen due to the involvement of a for-profit company. The International Traffic in Arms Regulations (ITAR) exempts fundamental research done by universities that is ordinarily published and shared broadly within the scientific community. However, when a private company is involved and the research is proprietary or restricted from publication or disclosure, no exemption applies.
A report on the matter in the New York Sun contained these insights from university officials:
The Chinese national was a graduate research assistant at the University of Tennessee. The DOJ reported that the University of Tennessee was victimized by the conspirators and cooperated throughout the FBI-led investigation.
Mr. Roth has not been charged in the case. The investigation of Mr. Roth has been watched closely by those in academics since May 2006 when it was reported that Customs agents copied his laptop as he returned from a trip to China and that search warrants were executed at his office and laboratory. University officials who monitor export control compliance believe that the Tennessee case may have arisen due to the involvement of a for-profit company. The International Traffic in Arms Regulations (ITAR) exempts fundamental research done by universities that is ordinarily published and shared broadly within the scientific community. However, when a private company is involved and the research is proprietary or restricted from publication or disclosure, no exemption applies.
A report on the matter in the New York Sun contained these insights from university officials:
"If you're blurring the lines between the work you do at one place and the work you do at another, you can quickly get into trouble," Patrick Schlesinger of the University of California said. Doing only publishable research also allows universities to avoid segregating foreigners, a task that may be impractical in physical science programs where American citizen students are often a minority. "If we want to preserve that safe harbor, we also need to be very vigilant," Steven Eisner of Stanford University said. "This particular case in Tennessee will wake up the university community to export controls if they weren't aware of it already."
BIS Deemed Export Webinar - April 15
04/03/08 12:14 PM
BIS
announced a Deemed Export Webinar which will take
place on April 15, 2008 from 1pm - 2pm Eastern. The
webinar costs $35 and one can sign up
here. BIS states
that participants will learn about the recently
issued Deemed Export Advisory
Committee's (DEAC) report and will learn
about deemed exports rules and regulations. Alex
Lopes, Director of the Deemed Exports and
Electronics Division of BIS, will be the main
speaker and will respond to questions. All that
is needed to participate is a telephone for the
audio portion and a computer with high speed
internet access for the visual portion of the
webinar.
Industry & University Groups Oppose DEAC Recommendations
02/26/08 10:28 AM
On February 15, 2008,
twelve industry groups (listed below) issued a
letter to the Secretary of Commerce offering their
"preliminary reaction" to the report by the Deemed
Export Advisory Committee (DEAC) issued on December
20, 2007. The signatories to the letter were: the
American Electronics Association (AeA), American
Council on International Personnel, Association for
Manufacturing Technology (AMT), Coaltion for
Employment Through Exports, Computer and
Communications Industry Association, Emergency
Committee for American Trade, Information
Technology Industry Council, International Safety
Equipment Association, National Council on
International Trade Development, National Foreign
Trade Council, and U.S.-China Business Council.
In the letter, the groups note a "marked disparity between the DEAC's analysis of the difficulties of regulating the transfer of technological knowledge in a globally interconnected world," an analysis they largely endorse, and the specific recommendations for a new approach to controlling the transfer of controlled information to foreign nationals while in the U.S. -- which they believe would be "difficult to translate into regulations, burdensome for U.S. companies' compliance programs and ultimately counterproductive to the U.S. national interest."
Specifically, the groups claimed that:
1. Controlled technologies would not be refined
2. More foreign nationals would be subject to controls
3. Recommendations would harm U.S. technological leadership
In conclusion, the groups stated, "We urge the Department to go back to the drawing board and work closely with industry in developing an approach that will produce a more balanced result."
Similarly, on February 20, 2008, the Association of American Universities (AAU) and the Council on Governmental Relations (COGR) submitted a letter to the Secretary of Commerce expressing their views on the findings and recommendations of the DEAC report. The groups stated that they strongly agree with the DEAC's principal conclusion that ". . . the existing Deemed Export Regulatory Regime no longer effectively serves its intended purpose and should be replaced with an approach that better reflects the realities of today's national security needs and global economy."
In the letter, the groups endorsed and specifically highlighted the following points:
1. Too many technologies are subject to deemed export controls and the list of covered technologies should be drastically reduced;
2. Each technolgoy on the CCL should "sunset" automatically after a period of one year, unless there is explicit action to retain it on the list following a review process; and
3. They agree wtih the DEAC recommendation to eliminate any distinction between research products and knowledge regarding equipment needed to conduct the research.
The letter then goes on to state the groups' serious concerns over the following DEAC recommendations:
1. They urge Commerce to regject the deemed export decision process construct proposed in the report -- specifically, as with the industry groups, they disapprove of the proposed "loyalty" assessments, which they claim would raise very serious policy, practical, and legal issues for universities;
2. They are concerned about the impact of loyalty assessments and broad-based background checks will have on reviews of deemed export license applications; and
3. They reject the DEAC's proposal to change the definition of fundamental research.
In conclusion, they state that they find the report to be well-considered and contains many helpful findings, but they urge Commerce to seriously consider the concerns outlined.
In the letter, the groups note a "marked disparity between the DEAC's analysis of the difficulties of regulating the transfer of technological knowledge in a globally interconnected world," an analysis they largely endorse, and the specific recommendations for a new approach to controlling the transfer of controlled information to foreign nationals while in the U.S. -- which they believe would be "difficult to translate into regulations, burdensome for U.S. companies' compliance programs and ultimately counterproductive to the U.S. national interest."
Specifically, the groups claimed that:
1. Controlled technologies would not be refined
2. More foreign nationals would be subject to controls
3. Recommendations would harm U.S. technological leadership
In conclusion, the groups stated, "We urge the Department to go back to the drawing board and work closely with industry in developing an approach that will produce a more balanced result."
Similarly, on February 20, 2008, the Association of American Universities (AAU) and the Council on Governmental Relations (COGR) submitted a letter to the Secretary of Commerce expressing their views on the findings and recommendations of the DEAC report. The groups stated that they strongly agree with the DEAC's principal conclusion that ". . . the existing Deemed Export Regulatory Regime no longer effectively serves its intended purpose and should be replaced with an approach that better reflects the realities of today's national security needs and global economy."
In the letter, the groups endorsed and specifically highlighted the following points:
1. Too many technologies are subject to deemed export controls and the list of covered technologies should be drastically reduced;
2. Each technolgoy on the CCL should "sunset" automatically after a period of one year, unless there is explicit action to retain it on the list following a review process; and
3. They agree wtih the DEAC recommendation to eliminate any distinction between research products and knowledge regarding equipment needed to conduct the research.
The letter then goes on to state the groups' serious concerns over the following DEAC recommendations:
1. They urge Commerce to regject the deemed export decision process construct proposed in the report -- specifically, as with the industry groups, they disapprove of the proposed "loyalty" assessments, which they claim would raise very serious policy, practical, and legal issues for universities;
2. They are concerned about the impact of loyalty assessments and broad-based background checks will have on reviews of deemed export license applications; and
3. They reject the DEAC's proposal to change the definition of fundamental research.
In conclusion, they state that they find the report to be well-considered and contains many helpful findings, but they urge Commerce to seriously consider the concerns outlined.
Commerce Secretary Receives Report and Recommendations from Deemed Export Advisory Committee
12/20/07 05:13 PM
The Advisory Committee Chairman, Norman Augustine, a retired Chairman and CEO of Lockheed Martin Corporation, delivered the report, entitled, The Deemed Export Rule in the Era of Globalization. The report can be found here.