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< Back to current issue of Immigration Daily < Back to current issue of Immigrant's Weekly

Basics Of The Deemed Export Rule

by William Henry Humble III

Introduction

Immigration attorneys need to know about this issue because it may delay/stop NIV status changes or visa issuance, and may trigger an investigation of the petitioning company, leading to fines, civil sanctions and criminal penalties.

Basics

What: An export license is required to release controlled technology to an alien in the USA.

Why: Such release is "deemed" to be an export1, which could allow the technology to fall into the wrong hands.

Where: In the USA.

When: An export license is required for deemed exports whenever transfer of the same technology to the alien's home country (physical export) would require an export license (see below, Applicability).

How: Apply online for an export license from the Commerce Department (www.bis.doc.gov/snap/pinsnapr.htm)2.

Who: The deemed export rule applies to all aliens and all exporters (but see below, Exceptions).

Definitions

"Export" means, in this context, not only the transfer of a physical item to a foreign county but also the non-physical release of information to an alien in the USA.

"Release" means communicated orally to an alien or made available to her for visual inspection under the guidance of persons with knowledge of the technology.3 Watch out: even a mere inspection or discussion can be a release.

"Technology" means specific information necessary for the "development," "production," or "use" of a product.4

"Controlled technology" is any information that could be a national security or foreign policy concern. See, e.g., the Commerce Control List (CCL), the U.S. Munitions List, the International Traffic in Arms (ITAR),5 etc.

"Exporter" means anybody doing the transfer or release, not just a company. This includes a non-sold transfer/release between friends (e.g. gift), regardless of the commercial value, even academic communications between teachers and students.6

"Dual-use" means a commercial item with a military application, even if not obvious.

"Home country" means the country of last permanent resident status or citizenship, but the Bureau of Export Administration may also look at the alien's family, professional, financial, and employment ties.

"End-use or end-user" means the technology would support a dangerous activity, such as nuclear, chemical/biological, or missile activities in a country of concern.7

"Deemed re-export" is where, for example, a U.S. company sends controlled technology to Spain, where a Moroccan employee is exposed to it. The U.S. company may need an export license if sending the technology directly to Morocco would require licensing.8

Applicability (i.e. license required)

This issue should be triggered in your mind anytime the technology, the alien's country, or the end-use/user involves something related to a national security or foreign policy concern (e.g. an embargo). It's a two-step process to determine if the deemed export rule applies to your technology:

1. Find your technology's Export Control Classification Number (ECCN) on the CCL.9
  • Many companies list ECCNs on their website.
  • If your item's not on the CCL, the ECCN is "EAR99" and no license is required (e.g. low-tech consumer goods) unless the export is to an embargoed country or to a prohibited end-use/user.

2. Use the Commerce Country Chart10 to see if there's an "X" at the intersection of your alien's home country and your technology's Reason for Control.

Exceptions (i.e. no license required)
The deemed export rule doesn't apply to:

  • A technology that isn't "controlled technology" (see above, Definitions).
  • A technology that is "publicly available" or the result of "fundamental research."11
  • An alien who has become a Refugee, Asylee, USC, or LPR.12
  • An exporter who's been granted an exception under EAR 740.

Penalties

An exporter faces high fines for administrative violations, and even criminal penalties.13 An alien seeking to violate or evade export rules is inadmissible.14

Warning

Liability is strict, in that a deemed exporter need not know (nor have reason to know) that the alien will pass the technology to a country requiring a license. The mere release is enough for liability.15 The definition of release is so inclusive that an export license may be required for an alien who has unrestricted access to data through a computer server.16

Questions

The Office of Exporter Services can be reached at (202) 482-4811. See also www.bis.doc.gov.

2008, William Henry Humble III


End Notes

1See 734.2(b)(2)(ii) of the Export Administration Regulations (EAR); 15 CFR 730-774 (2007).

2Or call (202) 482-3332 and request Form BIS-748P. For military technology, apply through the State Department (http://www.pmddtc.state.gov/licensing/index.html). Applications may be reviewed by other agencies, such as the departments of Energy, Defense, Treasury, Justice, and the Central Intelligence Agency. Trade embargoes & sanctions/Transactions - Department of the Treasury

315 CFR 734.2(b)(3); EAR 734.2(b)(3); 22 CFR 120.17(4).

4EAR 772.

522 CFR 120.

6On 09/03/08, J. Reece Roth, a retired University of Tennessee professor was convicted of violating the Arms Export Control Act by allowing two foreign students (from China and Iran) to see sensitive data, not hardware.

7EAR 744.

8See EAR 734.2(b)(4).

915 CFR 774; EAR 774 (online at www.access.gpo.gov/bis/ear/ear_data.html#ccl, Scroll down to Part 774).

10EAR 738, Supplement No. 1 (online at http://www.access.gpo.gov/bis/ear/pdf/738spir.pdf).

11The full definitions of these terms are beyond the scope of this synopsis.

12See 8 USC 1324b(a)(3) - but note that this exception does not apply to an LPR who fails to timely naturalize.

13See http://www.bis.doc.gov/complianceandenforcement/othereetopics.htm#penalties. Mr. Roth faces up to 160 years in prison and more than $1.5 million in fines (as reported by Duncan Mansfield, Associated Press Writer).

14INA 212(a)(3)(A)(i)(II).

15See R. C. Thomsen II and A.D. Paytas, "Export Licensing Requirements for Hiring Foreign Nationals," in Professionals: A Matter of Degree, 78 (AILA 4th ed. 2003).

16See A. DeBusk and D. Fisher-Owens, "Legal Action Center Practice Advisory: Export Licensing Requirements for Foreign Nationals" (07/17/2003), American Immigration Law Foundation, at www.ailf.org.


About The Author

William Henry Humble III is an attorney at the firm Judith G. Cooper, P.C., in Houston, TX, where he practices exclusively immigration and nationality law. Before coming to Houston he practiced in Dallas, San Antonio, and New York City. He can be reached by email at whumble@immigration-visas.com.


The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.


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