ExportÆs human touch
U.S. government grapples with keeping certain foreign nationals away from sensitive technologies.
By Chris Gillis
Declaring whether a person from overseas should have access to sensitive U.S. technologies may be as easy as checking a box on the proper visa form, but companies and universities must do their homework before signing off.
U.S. Citizenship and Immigration Service (USCIS) on Nov. 10, 2010 adopted the revised Form I-129, which is used to petition a person to come to the United States or continue their stay on a temporary basis to perform a certain task. On the form, the employer must specify if an export license from the Commerce or State departments is required.
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| Paul DiVecchio president, DiVecchio & Associates |
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| 'You've got to know if you're doing it right and be able to back it up.' | |
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'You've got to know if you're doing it right and be able to back it up,' said Paul DiVecchio, president of DiVecchio & Associates, a Boston-based consulting firm specializing in export compliance. 'Otherwise you risk a significant compliance problem.'
This human element, known as 'deemed' exports, is difficult to understand and control, not just for private and public institutions, but also for federal regulators. The concern is vulnerabilities in the U.S. government's deemed export control system could help China and other countries of concern improve their military capabilities.
The Government Accountability Office, a congressional watchdog agency, has released several reports since 2002 criticizing the Commerce and State departments for insufficient oversight of visa applications for potential unlicensed deemed exports.
In a report released earlier this year, GAO noted that Commerce's screening of visa applications had dropped from 54,000 in 2001 to 150 by 2009. The report also said from 2004 to 2009 1.05 million specialty occupation visas in high-tech fields were issued to foreign nationals from 13 countries of concern. In addition, the report highlighted that enforcement agencies have neither monitored security conditions nor improved coordination between Commerce's Office of Export Enforcement, Homeland Security's Immigration and Customs Enforcement, and the FBI.
In early 2010, USCIS asked Commerce's Bureau of Industry and Security (BIS) and other government agencies to review the text of the proposed 'Box 6' to its I-129 form 'petition for A Nonimmigrant Worker.' The goal was to ensure that it was not inconsistent with the requirements of the Export Administration Regulations, which BIS administers.
The new I-129 form for H-1B (specialty occupation professional), L-1 (intra-company transferee), and O-1 (alien of extraordinary ability) is considered by some export control experts to be the government's response to these GAO reports. In specific, the form, which became effective Feb. 20, includes a new certification regarding the release of controlled technology or technical data to foreign persons in the United States.
With this form, USCIS is expected to provide Commerce and State departments, ICE and FBI with feedback from the applicant who files the I-129 indicating that a deemed export license is required.
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'Analysts in BIS's Office of Enforcement Analysis (OEA) will take advantage of I-129 data to identify potential end-use checks and to pursue law enforcement leads developed from other sources,' said Kevin Wolf, assistant secretary of commerce for export administration at BIS. 'Standard operating procedures for use of this new resource are under development. OEA analysts routinely collaborate with counterparts in other agencies; this will continue to be the case with USCIS and the Department of State with respect to the I-129 data.'
In specific, Commerce's Export Administration (EA) and Export Enforcement (EE) units will partner on site visits to deemed export license holders to review their compliance activities against the internal control programs included as part of their license applications.
'EA and EE will use the results of the site visits to develop additional regulatory compliance guidance,' Wolf said. 'In addition, OEA analysts cross-reference multiple data sources in order to identify growing diversion concerns. This background research will allow OEA to narrow their focus to those I-129 records most likely to reveal an enforcement issue,' Wolf said.
'The bottom line is more enforcement oversight,' DiVecchio said.
Despite the changes to the I-129 form and potential for increased enforcement, U.S. exporters interviewed for this article generally welcomed the changes.
'I see it as a godsend,' said Dennis Farrell, global export compliance manager for Analog Devices, a Massachusetts-based data conversion and signal conditioning technology firm. 'It finally brings the human resources department to the table and makes them realize they need to play a role in the export compliance of a company.'
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| Dennis Farrell global export compliance manager, Analog Devices |
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| 'It finally brings the human resources department to the table and makes them realize they need to play a role in the export compliance of a company.' | |
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'I don't see it as particularly onerous,' added Jonathan Wise, classification manager at Agilent Technologies, based in Santa Clara, Calif. 'It's something you had to do anyway. Otherwise, how do you know if you need a deemed export license or not?'
For companies with a handle on their export controls, DiVecchio said adherence to the I-129 form won't be a problem. However, there are a number of firms and universities that lack the in-house knowledge and expertise that could land them in hot water if the form is not properly handled.
If a federal agency finds a non-U.S. person gaining access to controlled technology, it could result in penalties of up to $250,000 per violation ' not to mention the negative publicity ' and in the worst case scenario the loss of export privileges. With exports generating the bulk of revenue for many of today's U.S. technology firms, non-compliance with deemed export rules could result in a significant financial blow.
BIS has provided training and outreach activities related to the export control provision in Form I-129. 'Based on the various responses BIS has received to these training sessions, there are a significant number of people from the immigration and human resources communities who were previously unaware of their export control obligations and best practices that pertain to their companies,' Wolf said.
Wolf and staff from BIS's Office of Exporter Services have conducted a number of widely attended teleconferences and webinars to explain to stakeholders the relationship between USCIS's revised I-129 visa requirements and the deemed export rule. For instance, more than 300 people participated in the March teleconference with USCIS that BIS sponsored.
Resources permitting, BIS plans to conduct additional regulatory compliance outreach activities with industry, research, academia and immigration stakeholders throughout the United States, the agency said.
In addition to the seminars, BIS plans to increase deemed export awareness by:
' Developing materials that provide interested parties with interactive Web-based self-teaching (www.bis.doc.gov).
' Working with the research community through the technical advisory committee process.
' Cooperating with other U.S. government agencies that have foreign national equities.
' Conducting site visits to ensure license holders are implementing their internal control programs.
BIS encourages the public to call or e-mail its export control counselors their questions. Each year BIS counselors respond to more than 50,000 inquiries from the public on a wide variety of export control issues. Another useful resource on BIS's Web site is its 'frequently asked questions' on deemed exports.
Wolf said the agency will make adjustments to its licensing staff based on number of deemed export applications and the funding to process them. He added that enforcement-related staffing changes as a result of the new export control certification requirement of the I-129 form will depend on the volume of voluntary self-disclosures submitted by companies who become aware of past violations of the Export Administration Regulations.
DiVecchio warned it's more important than ever for hiring managers, human resources, and export compliance officers of companies and universities to determine the licensing classification and requirements before completing the I-129 form. 'No HR personnel or immigration attorney should be completing the form without input from the export compliance officer and hiring manager,' he said.
A focal point must be established inside the company or university to research and confirm the classification of the technologies at issue. There must also be the ability to ensure all controlled technology is 'firewalled' so unauthorized access by foreign nationals doesn't occur, he said.
'Changes in control status of the technology or employment of the foreign national must be coordinated between the compliance officer, HR and the employee's manager to ensure a current classification is applicable,' DiVecchio said. 'Individuals change positions and this needs to be monitored.'
In addition, sponsor letters to foreign nationals seeking a visa approval from U.S. embassies or consulates must be accurate and should address the licensing status of the technology to be accessed, he said.
While U.S. employers cannot discriminate against any person with respect to recruitment, hiring or discharge from employment based on nationality or citizenship status, it is legal to ask about citizenship when the position applied for (or held) may require exposure to controlled technology and for ensuring compliance with U.S. export control laws.
'It must be made clear that the information is required for compliance with federal export control laws only and that it will be used for no other purpose,' DiVecchio said. 'The best practice is to ask at the application stage by using a questionnaire or job application addendum in order to obtain this information from each new hire candidate.'