Definition[edit | edit source]

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.

Overview[edit | edit source]

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 U.S. 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.

The United States is the only nation that controls Deemed Exports and also participates in multilateral export control regimes as, for example, the 40-nation Wassenaar Agreement. Other nations depend largely on their visa processes, intelligence information, and commercial intellectual property controls rather than a formal Deemed Export licensing regime. As a consequence, unlike many other export control practices, changes to United States Deemed Export policy can be made unilaterally at the United States' discretion.

Historical Background[edit | edit source]

The Deemed Export control regime traces its origin to the Export Administration Act of 1979, as amended. Jurisdiction over the regulation of dual-use exports, including Deemed Exports, was assigned by Congress to the Secretary of Commerce, who in turn delegated that authority to the Department of Commerce's Bureau of Industry and Security (BIS). Over the years, various concerns have been raised over the interpretation and application of the Deemed Export regulations. Many of these concerns were alleviated by National Security Decision Directive (NSDD) 189 issued on September 21, 1985 that clarified the definition of “Fundamental Research” — a very large and important category that was thereby excluded from Deemed Export regulation.

Fundamental Research was defined as comprising basic and applied research in science and engineering, the results of which “ordinarily are published and shared broadly within the scientific community.” The output or product of such research is not subject to BIS’s Deemed Export regulations as set forth in the Export Administration Regulations. The result of this interpretation was to greatly reduce the potential demands on the academic community and, to a much lesser degree, the industrial community, to comply with the Deemed Export regulations because the results of virtually all academic research “ordinarily are published and shared broadly within the scientific community” — or at least so intended.

In March 2004, the Office of the Inspector General of the Department of Commerce recommended modification of another major interpretation of the EAR having to do with so-called “use” technology (discussed later) that would have the potential to vastly expand the number of activities subject to Deemed Export licensing. In response to this and other recommendations of the Inspector General, in 2005, the Bureau of Industry and Security (BIS) sought public comments prior to making any revisions. A large number of concerns were raised throughout the industrial and academic communities.

Recognizing the contentiousness and complexity of the Deemed Export issue, BIS determined in May 2006 that a broad independent assessment should be conducted of the overall Deemed Export regulatory regime. To conduct this review, a Federal Advisory Committee was established comprising individuals with experience in government, business, educational research and national and homeland security matters. The present document constitutes the report of that committee based on its discussions with government officials, national security personnel, educators, industrialists, association executives and members of the public. Both classified and unclassified presentations were received by the Committee. A total of six meetings were held (one each in Santa Clara, Atlanta, Cambridge and Chicago, and two in Washington, D.C.). Public input was solicited and received at each meeting. It is noted that several other ad hoc committees are currently studying various aspects of the United States' export policy, including one under the auspices of the National Research Council Committee on Scientific Communication and National Security, one under the auspices of the Center for Strategic and International Studies, and one recently completed effort by the National Research Council Committee on a New Government-University Partnership for Science and Security.

Impact on U.S. Industry and Academia[edit | edit source]

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).

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