The United States Government believes that controlling access to certain defense and dual-use commodities, technologies, and technical data is critical to the nation's security. As of November 9, 2010, the Obama Administration created the Export Enforcement Coordination Center within the Department of Homeland Security (DHS) culling enforcement resources from several executive departments and federal agencies in order to achieve more aggressive enforcement of Export Controls laws and regulations.
As of November 23, 2010, one of the agencies under the DHS umbrella, the United States Citizenship and Immigration Services (USCIS), requires all new employers of H-1B (professional), L-1 (intracompany transferee), and O-1 (extraordinary ability) nonimmigrant workers to attest that they have reviewed the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) and have determined that:
- a license is not required from either the U.S. Department of Commerce or the U.S. Department of State to release such technology or technical data to the foreign person, or
- a license is required from either the U.S. Department of Commerce or the U.S. Department of State to release such technology or technical data to the beneficiary and the petitioner will prevent access to the controlled technology or technical data by the beneficiary until and unless the petitioner has received the required license or other authorization to release it to the beneficiary.
Do the EAR or the ITAR affect our company?
Possibly. The EAR and the ITAR prohibit the unauthorized export or release of commodities, technology, and technical data that:
- were designed, developed, configured, adapted, or modified for a military application in form fit or function (ITAR); and
- have both commercial and military or proliferation applications as well as purely commercial items (EAR).
Need we be concerned if we do not export?
Yes. An export need not cross the United States border to occur. An export may be any of the following:
- the shipment, electronic or digital transmission of covered items or technology outside the United States;
- the use or application of covered technology for the benefit of a foreign entity or foreign person anywhere; or
- the release or disclosure of covered technology, software or equipment to a foreign national anywhere.
Are certain businesses more at risk of noncompliance?
Yes. We urge you to immediately review your obligations under the EAR and the ITAR if you currently engage in the manufacture, design, or export of controlled commodities, technology, or technical data. Further, you ought to be familiar with the EAR and the ITAR if you are involved in any aspect of dual-use or defense trade, pharmaceutical, chemical, aerospace, or higher-education sectors, and:
- you have a multinational (H-1B, L-1, J-1, TN, E-1, O-1) technical workforce;
- you have a multinational supply chain;
- you are a prime or sub-tier supplier to defense contractors;
- you engage in government-funded R&D (particularly defense);
- you are a global engineering, R&D, IT, or sourcing company; or
- you are an entity with networked data centers abroad.
What are the potential penalties for improperly completing the USCIS form?
You may subject yourself and/or the company to criminal sanctions for false statements to the United States government. These criminal penalties would be in addition to the ruinous penalties imposed by the EAR and the ITAR ($1 million per violation, up to 20 years in jail, denial of export privileges, and/or debarment from government contracts).
What should our company do?
We urge you to seek Export Controls counsel to:
- determine whether your commodities, technology, and technical data are controlled by the EAR and the ITAR;
- determine whether foreign national employees will require access to said commodities, technology, or technical data;
- develop and implement internal Export Controls policies and procedures;
- register with the licensing agency if required to do so; and
- obtain licensing authority if necessary