The Department of Commerce has withdrawn proposed changes to regulations
involving the access by foreign nationals to controlled technologies.
Future changes to the deemed export control regulations will be reviewed
by an advisory committee whose formation was announced in late May (see
The Commerce Department's Bureau of Industry and Security published
an advance notice of the proposed regulatory revisions in March 2005.
The revisions were a response to a 2004 report issued by its Inspector
General entitled, "Deemed Export Controls May Not Stop the Transfer
of Sensitive Technology to Foreign Nationals in the U.S." In
essence, the revisions would have required an institution to consider
a foreign national's birthplace, and not just his or her current citizenship
in deciding whether to apply for a license. In addition, the revisions
would have expanded what was considered the "use" of a sensitive
technology by such individuals.
The Department of Commerce requested comments when the proposed rulemaking
was announced in 2005. There were 311 responses from academic institutions,
law firms and legal associations, companies, trade associations, U.S.
national laboratories, academic associations, Member of Congress, federal
agencies, foreign governments, and individuals. The Commerce Department
web site has 1,176 pages devoted to these comments, which can be read
(see Public Comments for June 27, 2005.)
"Almost without exception, the comments stated clear opposition"
to the recommendation "that deemed export licenses be based
on a foreign national's country of birth rather than country of citizenship."
The notice in the May 31, 2006 Federal Register explained this opposition
as follows: "Numerous comments expressed concern that excessive
and bureaucratic requirements will foster a perception among foreign
students and researchers that the United States does not welcome foreign
nationals in its high-technology research community. Many comments observed
that the decrease in the number of foreign nationals in U.S. academic
institutions and U.S. industry has already been detrimental to the economy
of the United States. These comments argued that a change in the deemed
export licensing policy from country of citizenship to country of birth
would further adversely impact the United States."
The other major proposed change was in regard to what is the use of
a controlled technology, and involved the substitution of the word "or"
for "and." The current definition requires six activities
relating to the use of a controlled technology: operation, installation,
maintenance, repair, overhaul, and refurbishing. As written in the May
31 notice, the Commerce Department explains: "it is the totality
of those activities that [currently] triggers the requirement
for a deemed export license." By substituting the word "or"
for "and" in the list of the six activities, critics complained
that the new regulation "would capture too many routine operations
carried out by students/employees, and thus constitute a large (and
generally unnecessary) compliance burden on organizations." The
notice later states "organizations from all sectors appear concerned
that a change in the definition would restrict the scope of fundamental
research by capturing more routine activities that are currently not
subject to the EAR [Export Administration Regulations]. Many
public comments noted that such narrowing of the scope of fundamental
research would have a chilling effect on U.S. research efforts conducted
by industry and universities alike."
The comments received indicated the need for greater public outreach
by the Bureau of Industry and Security (BIS). The notice concludes:
"it is apparent that an expanded outreach program must be supplemented
by a collaborative effort between BIS and the regulated community to
ensure that the deemed export policy is consistent with evolving technologies
and national security concerns."
The notice of the withdrawal of the proposed rulemaking appeared in
the May 31, 2006 issue of the Federal Register. It may be read at http://www.gpoaccess.gov/fr/index.html
In the search box for 2006, type page number 30840 (it is item
#5 in the results list.)