Employers seeking to hire foreign workers to temporarily perform services are now required to certify that they will comply with export control laws related to the release of controlled technology or technical data to those foreign workers. The certification, included by U.S. Citizenship and Immigration Services (USCIS) as part of a revised Form I-129,1 requires employers to declare that they have reviewed the Export Administration Regulations (EAR) administered by the Department of Commerce and the International Traffic in Arms Regulations (ITAR) administered by the Department of State and have considered the applicable export controls and restrictions under each set of regulations.
In particular, employers will need to certify as part of the I-129 petition that they have reviewed the EAR and ITAR and have determined that either (1) a license is not required from the Department of Commerce or the Department of State to release or otherwise provide access to technology or technical data or (2) a license is required from the Department of Commerce or the Department of State to release such technology or technical data and the foreign worker will not have access to the controlled technology until, and unless, the required license or authorization has been obtained. Under both the EAR and the ITAR, the release of controlled technology or technical data to foreign persons in the United States, including employees, would be deemed an export to that person’s country or countries of nationality and, in many cases, would require a license from the Department of Commerce or the Department of State.
Although the revised Form I-129 does not modify current law regulating deemed exports, the additional certification may increase a company’s exposure, as any violation of export controls on the release of technology or technical data may subject the company to additional penalties for making false statements to the U.S. government. In fact, a Government Accountability Office (GAO) report released in February 20112 determined that the I-129 certification could help government officials enforce export controls more effectively. According to the report, the difficulty of proving that an entity willfully intended to violate deemed export regulations has led to a relatively low number of criminal convictions and civil penalties for violations related to deemed exports. The certification could be used to support a false statement charge, without any need to demonstrate intent, and could therefore lead to an increase in the number of deemed export investigations resulting in penalties. Moreover, because the certification is part of an employment visa application, a company found to be making false certifications could face investigation, audit, severe fines, or be restricted from filing for future immigration petitions by U.S. Citizenship and Immigration Services. Bureau of Industry and Security officials have recently indicated publicly that they expect to review the I-129 certifications with a view towards audits and enforcement actions.
While the certification does not impose any new requirements with respect to export controls, and while many companies already choose to determine any potential deemed export issues during the process of hiring a new foreign employee, all companies will now need to consider the impact of a potential hire on compliance with export controls. As a result, many companies will need to review, and potentially amend, existing compliance procedures and hiring practices, particularly considering the possible increase in enforcement described above. Companies that do not have dedicated export control personnel, for example, will need to ensure that their human resources personnel have the necessary knowledge and understanding to certify to the company’s compliance with the applicable export controls.
Compliance with rules regulating deemed exports can present challenges to employers because controlled technology may be present in various forms of information routinely handled in a business and can include technical assistance and technical data, such as plans, diagrams, formulae, designs, specifications, instructions and other documentation. Moreover, identifying those technologies deployed within a company that may be controlled can be difficult even for an experienced exporter. For example, a manufacturer that generally does not produce controlled items may nonetheless be required to address deemed export controls if the machinery or equipment it uses to produce its goods (and the technology or technical data related to such machinery or equipment) is subject to export restrictions. Lastly, the circumstances that may involve the release of controlled technology or technical data are not always obvious to an employer and can occur even where the foreign national employee comes to the job with unique knowledge of, or experience with, controlled technical information, but then collaborates with other company researchers or develops further work product for the company using that knowledge.
Employers should work with internal export compliance personnel and/or outside counsel to develop practices that ensure compliance with export controls and related laws and to implement processes to allow the company to prepare the required certification as part of the I-129 petition process.