Once again courtesy Doug Jacobson of International Trade Law News, here is a write-up of today's deemed export breakout:
Alex Lopes, Director, Deemed Exports and Electronics Division
Alex introduced the program by saying that compared to three years ago, everyone now knows what a deemed export is. They have come a long way in raising issue of awareness in deemed exports.
--Alex noted that three years ago BIS had few outreach events on deemed exports, which were limited to small number of companies in high-tech industries. BIS now conducts 120 outreach events per year. Increased staff in Deemed Export Division has helped their efforts (staff has doubled over the past few years).
--He noted that as a result of Inspector General’s report BIS has spent the last few years working on deemed export issues.
--Next, Alex introduced the members of the panel, which included:
- Rolf Migun, Manager of export controls compliance at the Oak Ridge National Laboratory
- Marcus Cohen, Senior Intelligence Analyst at BIS Office of Enforcement Analysis – Authored deemed export propose rule and withdrawal notice.
- Todd Willis, Senior Policy Analyst, BIS Deemed Exports and Electronics Division
--After the introduction, Alex discussed the deemed export year in review.
--Congress authorized an increased budget for deemed export compliance activities, which resulted in an increase in BIS deemed export staff from three to six.
--BIS published two deemed export related Federal Register notices in FY 2006, which included the withdrawal of the deemed export proposed rule and establishment of the DEAC, the Deemed Export Advisory Committee.
--BIS received 840 deemed export applications in FY 2006. BIS approved most applications received and less than 1% were denied. Almost 60% of the deemed export licenses received were for PRC foreign nationals, followed by India (13%), Iran (7%), Russia and Germany (2% each) and UK (1%).
--While some applications languish, most deemed export licenses are processed in 40 days (down from 70+ days a few years ago).
-Next, Alex discussed the clarification of "use" technology. This was a result of the OIG report indicating there was confusion in this area and suggested that BIS change definition. BIS did not change the definition, but provided clarification in the FR notice. The confusion related to the connector "and" in the definition. Applies to "required" technology, which means that it is peculiarly responsible for item to be export controlled. The May 31, 2006 Federal Register notice states that all six elements are required for "use" requirement to apply.
--Technology that is publicly available is classified as EAR99 and is not subject to licensing requirement in most cases (exceptions are Cuban-born nationals or prohibited uses). Take a look at the Q&As on BIS website regarding "use" technology issues.
--In the May 31, 2006 FR notice, BIS reaffirmed existing policy with respect to third-country nationals, rather than using OIG’s suggestion of using country of birth. The existing policy is based on most recent established citizens or permanent residence. U.S. citizens, green card holders, are not subject to deemed export licensing requirements.
--Scope of "fundamental research" also remains unchanged. Fundamental research exclusion based on technology that is ordinarily shared with scientific community. May be instances where preexisting controlled technology may be used and therefore deemed export requirements may come into play. Certain controlled fundamental research that is protected (placing a box around the research or technology), may be subject to the EAR. See the BIS advisory opinion on patents on research.
--Deemed Export Advisory Committee (DEAC). Purpose of the DEAC is to base policy on collaboration with affected communities. DEAC met for first time last Thursday. Program is only chartered for one year and is expected to make its recommendation by next Fall. Will meet several times over the next few months to get various perspectives and comments. Meeting will be published in FR in advance.