Update on Commerce Department Actions on Deemed Export Controls

The Commerce Department announced earlier this week that it will create a Federal Advisory Committee to offer recommendations on deemed export policy. The twelve members of the Deemed Export Advisory Committee will be appointed by the Secretary of Commerce. Committee members, who must obtain a secret security clearance, are now being recruited from academia, industry and other fields. Candidates must respond by July 21, 2006.

Both the Commerce Department and Defense Department have been reviewing their policies to prevent the transfer of sensitive technologies to foreign nationals in the U.S. Proposed revisions were criticized as cumbersome, expensive, and overly restrictive.

Notice of the intent of the Bureau of Industry and Security of the Department of Commerce to establish this committee appeared in the May 22, 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 in page number 29301 (it is item #5 on the search results page.) Excerpts from this notice are below:

BACKGROUND:

“The nature of research and technological development is constantly changing and there is evidence of growing participation of foreign nationals in U.S.-based research as well as their employment in U.S.-based high-technology industries. There is also an increasing interdependence between commercial and academic research. Over the course of the past decade, these changes have inevitably led to the increased transfer of controlled information to foreign nationals in the course of research and commercial technology development.

“To ensure that the deemed export policy best protects U.S. national security, while striving not to impede the ability of U.S. industry and academic research to continue at the leading edge of technological innovation, BIS [Bureau of Industry and Security] is establishing a ‘Deemed Export Advisory Committee . . . . The DEAC will undertake a comprehensive review of the national security, technology, and competitiveness dimensions of the deemed export issue and provide recommendations for potential changes to the current deemed export policy. The DEAC’s review will include, but not be limited to, the recommendations made in the Department of Commerce Office of Inspector General (OIG) Report entitled ‘Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S.’

“The DEAC, which will not exceed 12 members, will be structured to ensure a balanced membership that will offer a comprehensive point of view on the complex technical and policy questions at issue. The advisory committee will consist of representatives from industry, academia, and other experts in the field to ensure a full discussion of all aspects of deemed exports and knowledge transfer from the corporate, academic, and national security perspectives. Members will be called upon to advise BIS on highly technical issues surrounding technology transfer and to help ensure that BIS effectively carries out its critical national security function. To that end, the DEAC shall have a diverse membership with expertise in national security affairs, scientific research and development (R&D) policy, and the various forms of technology subject to the EAR [Export Administration Regulations], such as nuclear, chemical, missile, electronics, computer, telecommunications, and avionic technology. For a full list of technology and software subject to the EAR, see 15 CFR part 774, Supp. 1.

“DEAC members will be appointed by the Secretary of Commerce and serve a term of not more than one year. DEAC members must obtain a secret security clearance prior to appointment. These clearances are necessary so that members may be permitted access to the classified information needed to formulate recommendations to the Department of Commerce. The DEAC will convene as appropriate, but in no case less than quarterly. To respond to this recruitment notice, please send a copy of your resume to Ms. Yvette Springer at Yspringer@bis.doc.gov . This Notice of Recruitment will be open until July 21, 2006.”

The following section in this notice states:

CURRENT DEEMED EXPORT POLICY:

“Given the extended public discussion of the OIG recommendations and the coming review of the deemed export policy by the DEAC, a reiteration of the current BIS deemed export policy regarding country of birth, the existing definition of ‘use’ in the Export Administration Regulations (EAR), and the relationship of fundamental research to deemed exports is warranted. BIS has decided not to make any changes at this time to current regulations and policy on these three issues.”