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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.