On February 20, 2011, US Citizenship and Immigration Services (USCIS) will require all employers filing for a nonimmigrant employment visa on the revised Form I-129 (i.e. an H-1B, H-1B1, L-1 or O-1A visa) to certify compliance with the "deemed export rule" as set forth under the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). The deemed export rule requires that U.S. persons, including employers, seek and receive authorization from the U.S. government before transferring, releasing or disclosing, within the United States, certain technology or technical data to foreign nationals unless those nationals are U.S. permanent residents or citizens.
While the deemed export rule has been in effect for some time, companies filing for a nonimmigrant visa will now have to certify compliance with this rule. Specifically, each company will have to certify that, with respect to the technology and technical data it will release or provide access to the foreign national receiving the visa, the company has reviewed the EAR and ITAR and has determined either: (i) a license is not required to release such technical data to the foreign national, or (ii) a license is required and the company will prevent access to the controlled technology or technical data to the foreign national until and unless the company has received the required license.
This certification provides yet another avenue for the U.S. government to prosecute violators of the deemed export rule. Since companies have to certify compliance with the rule, the government can now, in addition to bringing actions under the EAR and/or ITAR, prosecute any violators under 18 U.S.C. § 1001, which makes it a federal crime to make false or misleading statements to the government.
Companies that employ foreign nationals or plan to employ foreign nationals and may produce, develop, or use controlled technology or technical data, or have customers or vendors that may produce, develop, or use controlled technology or technical data, should consult an attorney about complying with the deemed export rule. Penalties for noncompliance are severe. Violators can face up to $500,000 in civil fines and up to $1 million in criminal fines per violation. Moreover, violators can be sentenced to up to 10 years in prison, be denied export privileges and be barred from receiving U.S. government contracts.