"Deemed Export" Laws Restrict Sharing Information with Foreign Nationals

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Heightened Security for Information Sharing

Among the many new security restrictions that have surfaced in the United States in recent years, one area that universities and educational institutions need to watch closely are laws that limit whether foreign nationals working or studying at U.S. universities may be exposed to secret or sophisticated technology, otherwise referred to as "deemed exports." Foreign nationals are identified essentially as all persons who are not U.S. citizens or permanent residents. This includes visiting scholars and foreign students.

This issue first became a significant concern for Americans back in the 1950s when attention focused on a talented foreign student who had studied aerospace engineering and mathematics at the Massachusetts Institute of Technology (MIT) and the California Institute of Technology (Caltech). That student, Qian Xuesen, later became the "father" of China's nuclear weapons program. The U.S. government has since recognized that little difference exists between exposing a foreign engineer, or even an intern, to sensitive technical data and putting that data directly into the hands of foreign governments. U.S. laws have increased regulations regarding deemed exports, and relevant agencies are now beginning to impose large fines and criminal penalties that can cause companies and universities public embarrassment.

Some experts in this area are estimating that federal agents plan to make between 40 and 60 visits to research universities in the upcoming months to investigate deemed exports (Flanagan & Carnegie, 2004). In 2004 the Department of Defense issued a troubling report concluding that the Department of Commerce's Bureau of Industry and Security (BIS) does not have "adequate processes to identify unclassified export-controlled technology and to prevent unauthorized disclosure to foreign nationals" (United States Department of Defense [U.S.D.O.D.], 2004). The report also stated that at least two government contractors and one university granted foreign nationals access to unclassified export-controlled technology without an export license or other authorized approval or exemption. The report criticized universities that were relying on the terms of contracts with the government in addressing access by foreign nationals and were not examining their practices in light of the deemed export laws and regulations.

The two federal agencies that administer most of the regulations by which deemed exports are controlled are the BIS and the Department of State's Office of Defense Trade Controls (ODTC). Unfortunately, having two different agencies oversee this one area causes a significant amount of confusion and makes the regulations difficult to understand, often duplicative and unnecessarily burdensome.

In a nutshell, the BIS propagates and administers the Export Administration Regulations (EAR), which cover dual-use exports. Any software or technology that is subject to the EAR and is released to a foreign national is considered an export to the home country of the foreign national and termed a deemed export (U.S.D.O.D., 2004). Software or technology can be exported by a visual inspection of U.S. equipment and facilities by foreign nationals, oral exchanges of information, or through the application of personal knowledge or technical expertise. These exports include those with both commercial and military or strategic uses as well as those with wholly civil uses. A release of controlled technology to a foreign national who is not a permanent resident of the United States is thus deemed an export. For this reason, American universities and colleges that employ foreign workers or admit foreign students to work on technology research must be conscious of the laws concerning deemed exports. These regulations apply to foreign nationals working for U.S. companies and universities both abroad and within the United States.

These deemed export laws are specifically aimed at foreign nationals and the knowledge and technological skills they may acquire while working and going to school in the United States. …