Deemed Exports under Review

Bookmark and Share

Deemed Exports under Review

Did you know that your company might need an export license for foreign nationals working in the United States? The U.S. government requires “deemed export” licenses for certain foreign nationals if they are working with controlled products and technology while they are in the United States.

Over the past two years, a number of questions about this policy have been asked, as well as stated concerns that many businesses and universities might not know about the requirement. To address these concerns, the government created the Deemed Export Advisory Committee (DEAC)—with the mission to examine the policy in terms of national security, economic competitiveness and technological leadership. The DEAC is a select group of eleven senior executives of academia and industry. Applied Materials CEO Mike Splinter is a member.

The DEAC issued its report in late December. The report contains a thorough analysis of how the United States must compete in a global market for scientific talent and how the factors that affect technological leadership have changed. The key findings are:

  • Much scientific knowledge and items can be obtained from other countries.
  • The current list of U.S.-controlled products is too all-encompassing.
  • The deemed export rules are vague and too complex.
  • Many companies and universities are not aware of the regulations.
  • The regulations focus on foreign nationals, but most export violations involved U.S. citizens.
  • The regulations contain logical inconsistencies and the criteria for assessing potential threats appear superficial.

The report argues that deemed export policy must be changed in order for the United States to remain a leader and offers a series of recommendations. The committee proposes a new process for deemed export decision making and urges the government to extend outreach programs. The recommendations are premised on the government conducting a systematic review of the control list and paring it back which SEMI views as a key objective of export control reform.

The Commerce Department’s Bureau of Industry and Security (BIS) has started an interagency review of deemed export policy based on the DEAC report and likely will seek public input on potential changes to the rules. They are also creating a new technical advisory committee with public and private sector participation to focus on emerging technologies and are working to improve their outreach efforts to promote awareness of and compliance with deemed export requirements.

For the BIS announcement and the full DEAC report, click here.

February 13, 2008