Industry coalition protests proposed U.S. “deemed export” changes

Industry coalition protests proposed U.S. “deemed export” changes

Industry coalition protests proposed U.S. “deemed export” changes

   A coalition of three large high-tech industry groups called the Bush administration’s proposed changes to licensing rules that determine which foreign nationals gain access to U.S. technology development “unfortunate and self destructive.”
   The so-called U.S. “deemed export” rule requires the Commerce Department’s Bureau of Industry and Security (BIS) and State Department’s Office 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.
   Since the Sept. 11, 2001 terrorist attacks, the Bush administration and some members of Congress have called for the Commerce Department to strengthen these controls.
   In particular, the proposed rule, which was released for public comment March 28, would make use of the individual’s birth country rather than the country of most recent citizenship or permanent residence as criteria for deemed export licensing. An Iranian-born Canadian green card holder would be considered an Iranian under the proposed rule, leading to denial of an export license for the individual.
   “We do not dispute that some who come here will acquire technological know-how and then take it back home,” said the Industry Coalition on Technology Transfer (ICOTT) Tuesday in a letter to the Commerce Department. “We believe, however, that such individuals are far fewer in number than those who come because they want to live in our open, democratic and economically robust society.”
   ICOTT, which comprises the American Association of Exporters and Importers, Semiconductor Equipment and Materials International, and Semiconductor Industry Association, warned that if this policy is made permanent many companies would move their research and development operations offshore “where it is easier to make use of intelligent, capable individuals who do not happed to be ‘United States persons.'”
   According to a May 7 New York Times article, Sun Microsystems plans to expand its research and development facilities in four countries.
   ICOTT has asked the Commerce Department to drop the proposed rulemaking, and consider reverting to its pre-1994 policy for deemed exports licenses (For more information about the U.S. deemed export debate, read the June issue of American Shipper, pages 56-58).