Deemed Export

A Deemed Export can be defined as (1) the release (2) of technology or source code (3) having both military and civilian applications (4) to a foreign national (5) within the United States. Thus, even though the release in question takes place within the confines of the United States, the transaction is “deemed” to be an export and therefore subject to certain United States Government export control regulations. The logic is that knowledge transferred to an individual within the United States can readily be transported abroad should the recipient wish to do so.

Deemed Export controls have a significant impact on United States industry, academia and national security. If a United States commercial firm has a foreign national working in its United States-based laboratory, it may be required to obtain an export license before it can reveal information to that employee in the normal course of business if the information may also have a military application (i.e., have a “dual-use”). Similarly, a university researcher conducting a project involving a foreign national student may be required to obtain an export license before sharing knowledge with that student relating to equipment used in a research project if that equipment might also have a military application.

If compliance with the relevant licensing regulations becomes unduly burdensome, United States firms operating under such regulations are significantly handicapped when competing with firms from nations imposing less restrictive controls. The national (including “homeland”) security ramifications of Deemed Export controls are even more evident: For example, absent appropriate safeguards, biology laboratory equipment designed to produce various toxins involved in disease research may be used by terrorists to produce toxins for harmful purposes.

In recent years, increasing concern has arisen in both industry and academia that unintentional violations of United States export control laws could occur as the distinction between military and civilian technology has become blurred, and as industry and academia have become highly globalized (i.e., pursuing activities that routinely involve foreign nationals).