The current Department of Commerce policy of examining the “country of current affiliation” for deemed export purposes may soon be revised. We understand that Commerce is considering a proposed rulemaking in the coming weeks whereby, under the likely new formulation, Commerce would look at the country of an individual’s birth/origin as one— but not the sole—factor in considering whether a deemed export has occurred and would apply the deemed export rule to a more restricted class of technologies. Thus, Commerce anticipates that the proposed rule would spell out additional factors to take into account in considering the country of an individual’s birth/origin, such as, for example, whether the person worked for a company on the Entity List while in his country of origin. An individual’s country of origin would not be the sole criterion determinative of the deemed export issue, and would lead to other questions to be vetted by a hiring company.
As noted above, the rule will be proposed and subject to public comment before being adopted in final. This rulemaking effort arises out of a recent report by the Deemed Export Advisory Commission (DEAC), which was commissioned to look at deemed exports because of various criticisms by the Department of Commerce’s Inspector General of how the program was conceived and being implemented.