Committee calls for overhaul of U.S. “deemed export” rules

Committee calls for overhaul of U.S. “deemed export” rules

Committee calls for overhaul of U.S. “deemed export” rules

A committee composed of 11 senior industry and academic officials called for the U.S. Commerce Department to overhaul its regulations for controlling access to certain U.S. technologies by foreign nationals.
   The Deemed Export Advisory Committee, which was commissioned by the department in September 2006 to examine the complex issue of so-called “deemed exports,” filed its report to Commerce Secretary Carlos M. Gutierrez on Thursday.
   “It’s the committee’s principal conclusion that the existing deemed export regulatory regime no longer effectively serves its intended purpose and should be replaced with an approach that better reflects the realities of today’s national security needs and global economy,” said the committee in a letter to Gutierrez.
   “The obsolescence of the current regime has been brought about by profound developments in science and technology, the free flow of massive amounts of information, the mobility of the world’s populace, the burgeoning economies of other nations, and the change in the character of threats to America’s security,” the committee added.
   The deemed export rule currently requires the Commerce Department’s Bureau of Industry and Security and State Department’s Directorate of Defense Trade Controls to determine whether an export license is required to release technological know-how to a foreign national working in the United States. The government believes that unauthorized release of tightly monitored technologies to “parties of concern” could contribute to the development of weapons of mass destruction.
   Since the Sept. 11, 2001 terrorist attacks, the Bush administration and some members of Congress have called for the Commerce Department to strengthen its deemed export controls. A 2004 Commerce Department Office of Inspector General’s report said current controls in this area were weak.
   An effort in 2005 by BIS to toughen its deemed export rules caused a backlash from the industry and universities, which argued that severe restrictions on access to knowledgeable foreign nationals would cause their research and development programs to suffer. After withdrawing its proposed rule in June 2006, BIS quickly formed the Deemed Export Advisory Committee.
   The committee met in both open and closed sessions on six occasions, with its first meeting held in Washington on Oct. 12, 2006. The committee received a total of 45 formal presentations.
   The committee’s report concluded that “by adopting a more rational construct for managing deemed exports based on building high walls around small fields comprised only of the most militarily consequential technologies, the nation’s security, which depends increasingly on access to the latest commercial technologies generated around the world, can actually be enhanced.
   “That is, the nation will be better served in balance, by seeking to accelerate its own technical prowess than by seeking to deny potential enemies access to broad avenues of knowledge.”
   The committee’s two main recommendations include:
   ' Replace the existing deemed export licensing process with a simplified new process that will “both enhance national/homeland security and strengthen American’s economic competitiveness.”
   ' Extend the BIS educational outreach program to help assure that all parties potentially subject to licensing with the deemed export rules are familiar with those rules, noting the current “highly ‘uneven’ distribution of firms and universities currently seeking deemed export licenses.”
   The 153-page report, The Deemed Export Rule in the Era of Globalization, is available online at https://tac.bis.doc.gov/2007/deacreport.pdf.
   “We intend to carefully review the committee’s findings as we move forward to strike the right balance of protecting national security while continuing to attract the world’s best and brightest,” Gutierrez said. ' Chris Gillis