The Intersection of Export Law and Immigration

The U.S. Government has issued a proposal extending export controls to include new categories of emerging technologies.

U.S. export laws impact relatively few types of goods and services, but there are inklings of change on this front that could affect employers of foreign nationals on work visas.

On November 19, 2018, the Bureau of Industry and Security (“BIS”), a branch of the U.S. Department of Commerce, responsible for regulating U.S. exports, published an Advance Notice of Proposed Rule Making (“ANPRM”).[1]

The ANPRM invited the public to comment on what “emerging” technologies should be covered under the Export Administration Regulations (EAR), which defines when licenses are required for products and services intended to be exported from the U.S. The Comment Period, which was due to conclude on December 11, was extended through January 10, 2019.[2]

U.S. national security

The EAR requires licensure of “controlled” technologies or software, i.e. items that could have some impact on U.S. national security. The most common type of controlled technology or software is “dual use,” i.e. can have military as well as civilian uses.

Historically, controlled technologies were relatively easy to identify: guns, rockets, biological weapons, super computers, nuclear technology etc. but, in recent years, there has been a muddying of the waters as emerging technologies and software increasingly can be viewed as having national security implications.

For example, in discussing the emerging technologies in question, the ANPRM identified speech and audio processing, nanobiology, genomic and genetic engineering, artificial intelligence, etc.— technologies, many of which have been spearheaded in their development by the commercial sector.

Especially now, in an era where we have witnessed how even social media technology and software can be weaponized to disrupt the nation’s social cohesion, there is an argument to be made that many types of emerging technologies- and software should be “controlled” in the national interest.

Export law and immigration intersection

The linkage between Export law and Immigration law is the, so called, “deemed export” rule, which is defined at Section 734.13 of the Export Administrative Regulations (“EAR”). The pertinent subsection reads as follows: “Any release in the United States of `technology’ or source code to a foreign person is deemed an export to the foreign person’s most recent country of citizenship or permanent residency.”

What this means is that U.S. export laws

It potentially does not just impact goods and services designated for physical export from the U.S., but also can impact the transfer of scientific knowledge to individuals, even within the U.S., who may be from countries which are subject to U.S. export restrictions.

While companies engaging in the development of clearly identifiable military technologies, like fighter jets, would be able readily to appreciate the application of the “deemed export” rule. For a software development company pioneering a new type of virtual reality technology intended for the gaming market, it may not be that obvious that such technology could be “controlled” technology subject to export licensure in connection with transfers to foreign nationals even within the U.S.

Moreover, controlling the transfer of certain emerging technologies could, conceivably, affect not only what kinds of disclosures can be made to foreign national employees under the “deemed export” rule.

As a result domestic firms can transfer technology since there are many businesses operating in the U.S. who also employ foreign nationals and/or are owned by foreign nationals who could come from countries subject to U.S. export restrictions.[3] As such, broadening the categories of emerging technologies subject to export controls.

This  could well end up subjecting more U.S. firms and educational organizations to export licensing requirements, even with respect to wholly domestic transfers of technological know-how.

The I-129 Immigration form that covers numerous work visa categories includes at Part 6 a question asking the petitioning employer whether it is required to obtain an export license in order to be able to disclose “technology and technical data to the foreign person.”

It is probably the case that most petitioning employers barely consider the question before marking the item– “A license is not required. . .”   In the future, employers may need to be more thoughtful about answering this question and even have their counsel perform a preliminary EAR analysis to see if an export license is required.

The take away:

• Right now, a relatively small percentage of goods and services require export licenses;
• However, BIS recently issued an Advanced Notice of Proposed Rule Making to consider whether certain emerging technologies should become subject to export controls. The proposed categories of new technologies suggest that in the years to come more technologies may be subject to export licensure;
• Because of the “deemed export” rule, employers who employ foreign nationals and operate in a technology area that could be affected by BIS’s rule making should take special note of its current initiative and consider advancing comments pursuant to the ANPRM. Comments can be submitted via the Federal e-rule making portal: http://www.regulations.gov, or submitted in writing to the Regulatory Policy Division/Bureau of Industry and Security/U.S. Department of Commerce, Room 2099B/14^thStreet and Pennsylvania Avenue, NW/Washington D.C. 20230/Refer to RIN 0694-AH61.

[1]The ANPRM is entitled “Review of Controls for Certain Emerging Technologies and was published in the Federal Register (See Federal Register, vol. 83, no. 223, p. 58201 (November 19, 2018). [83 FR 58201 (November 19, 2018)]

[2]See 83FR 64299 (December 14, 2018)

[3]This, however, presupposes that the technology transferor knows that the transferee business intends on disclosing the covered technology to foreign nationals, which is most often not the case.

Related articles: