BIS is considering some changes to the "deemed export rule" (i.e. technology transfers to foreign nationals within the US) in response to a report (pdf) by the Commerce Department's inspector general. (For more background on deemed export, see this FAQ.)
From my quick read of the notice, the overall impact of adopting the report's recommendations would be to tighten up the rules in a few important respects:
- A modification of the definition of "use" which has the effect of expanding the definition.
- A proposal to look at a foreign national's country of birth, rather than their country of most recent citizenship/permanent residency in determining if a technology transfer to that individual requires a license. For example, under the current regulations the transfer of technology within the US to a Pakistani-born engineer with Danish citizenship would be evaluated like an export of that technology to Denmark. The Commerce IG wants BIS to treat it like an export to the foreign national's country of birth, Pakistan in this example, apparently regardless of how long the foreign national has lived in Denmark.
- Clarifications to two parts of the Q&A in the regulations both of which have the effect of being more restrictive.
BIS is accepting comments on these proposals through May 27, after which they will publish a final rule.
I'd be surprised if large sectors of industry who struggle to cope with the deemed export rule as it stands today aren't mightily annoyed at some of these changes which will only make compliance that much tougher, more burdensome, and time consuming. If this is a significant issue for your organization, I encourage you to read the entire IG report (pdf). Take an especially close look at the BIS response to each recommendation (which begins on page 51) for a sense of what other measures the agency will be taking outside the regulatory changes discussed in yesterday's notice.