May
25
“Do What I Say” Etc., Etc.
Posted by Clif Burns at 5:45 pm on May 25, 2010
Category: Criminal Penalties • DDTC • Deemed Exports • Technical Data Export
In case you can’t read the text of the “WARNING” in this RFP from the Naval Air Systems Command sent to me by an alert reader, it says:
WARNING: THIS DOCUMENT CONTAINS TECHNICAL DATA WHOSE EXPORT IS RESTRICTED BY THE ARMS EXPORT CONTROL ACT (TITLE 22, U.S.C. SEC 2751 ET SEQ) OR THE EXPORT ADMINISTRATION ACT OF 1979, AS AMENDED, (TITLE 50, U.S.C. APP 2401, ET SEQ). VIOLATIONS OF THESE EXPORT
Which is why, of course, the document is posted on the web where any foreign person in any country could download the document and obtain export-restricted technical data. I was able to download without problem all of the documents attached to the RFP.
Perhaps the contracting officer was unaware that the Internet was available outside the United States or that foreign nationals in the United States could actually access the Internet. Or did the contracting officer think that if, say, an Iranian saw this “WARNING” either a crise de conscience or fear of the long arm of U.S. law would cause him or her to heed the warning and not download the juicy details? (I have blurred the details of the RFP so as to not to assist any foreign person in locating this particular RFP, and I’m not providing a link for the same reason.)
The government regularly threatens defense contractors, universities (cf. Professor Roth), and others with huge fines and criminal penalties for disclosures of ITAR-controlled technical data, even data that is already available elsewhere on the Internet. So why haven’t I read about a raid on the Naval Air Command Systems office at the Pentagon and seen pictures of ICE carting off all their computers?
May
12
Maybe Carbon Paper Wasn’t Such a Bad Thing After All
Posted by Clif Burns at 11:40 am on May 12, 2010
Category: Deemed Exports
Another day; another export compliance nightmare. First it was cloud computing and now it is . . . copy machines. Seriously.
An alert reader pointed me to this CBS News story about hard drives found in almost all copy machines built after 2002. They store images of the last 20,000 or more things copied on the machines to which they are attached. Your resumé. Your tax return if you copied it at work before you sent it. The photocopy you hilariously made at the office Christmas party of, well, you know who you are and you know what I mean.
It also includes any export-controlled technical data copied on the machine. And since you probably lease that machine, your vendor comes in periodically to replace the machine, whisking away the old one, and its hard drive, and sending them to destinations unknown. Have you worked up a cold sweat yet?
The CBS reporters downloaded copies of hard drives from used copy machines Each copier was bought for $300 each. They found confidential patient medical records, details of an on-going drug investigation by the Buffalo police, and pay stubs with names, addresses and, yes, social security numbers. And I’m sure that export-controlled technical data wouldn’t be hard to find either. At the facility where CBS bought the used copy machines, two containers of used copy machines were being packed for export to Singapore and Argentina. Was your copy machine in that batch?
As soon as you finishing reading this, you probably want to take steps to make sure that copy-machine hard drives are scrubbed before the machines leave your facility and that, in the future, all export-controlled technical data or technology is only copied on secure machines that implement a factory option to erase each image from the hard drive after the copy is made.
Mar
15
Obama Hints at Specific Export Reforms
Posted by Clif Burns at 8:30 pm on March 15, 2010
Category: BIS • DDTC • Deemed Exports • Encryption
Last week, in his speech before the Ex-Im Bank, President Obama provided some details about the specific export control reforms which might be in the offing. The first relates to our ludicrously archaic and burdensome system of encryption controls. Obama promised to streamline the review process for “products with encryption capabilities like cell phone and network storage devices.” He promised to cut the review process required before exporting such devices from 30 days to 30 minutes. While a welcome change, even 30 minutes is too much. The U.S. should acknowledge the widespread availability of commercial encryption outside the U.S. and deregulate exports of all encryption products other than military encryption.
Second, Obama promised reform in a somewhat obscure area of export law mostly known to export control junkies and geeks:
And second, we’re going to eliminate unnecessary obstacles for exporting products to companies with dual-national and third-country-national employees. Currently, our exporters and foreign consumers of these goods have to comply with two different, conflicting set of standards. They’re running on two tracks, when they could be running just on one. So we’re moving towards harmonizing those standards
What Obama is referring to here is the conflict between the standards applied by the State Department and the Commerce Department on “deemed exports.” Under the deemed export rules, exports of technology are deemed to be exports to the country of which the recipient is considered a national.
Under Commerce’s deemed export rules, an export to a foreigner with multiple citizenships or countries of permanent residencies is considered an export to the country of the most recently acquired citizenship or permanent residency. Under State Department rules, the export is considered to be an export to each of the countries — with the most restrictive licensing policy applied.
Obama doesn’t say which of these conflicting rules will yield to the other as they are “harmonized.” We can only hope that the Commerce rules will prevail.
Feb
23
More Deemed Export Red Tape Courtesy of BCIS
Posted by Clif Burns at 8:29 pm on February 23, 2010
Category: Deemed Exports
DHS’s Bureau of Citizenship and Immigration Services (“BCIS”) wants to make your life more difficult if you hire H-1B workers and need a deemed export license to do so. Under a proposed revision in the form used to apply for H-1B visas for skilled technical workers, employers will now need to obtain the deemed export license from the Bureau of Industry and Security (“BIS”) before applying for the H-1B visa. Previously, the license needed to be obtained before the foreign worker could be given information on the controlled technology, but the employer could file for the visa and the deemed export license simultaneously. Now, the export license must be obtained before the visa can even be submitted to BCIS. Here is a copy of the proposed form. Check out page 6.
Oddly, this requirement is only for employees needing BIS deemed export licenses. Those requiring a deemed export license from the Directorate of Defense Trade Controls (“DDTC”) for foreign workers involved with technologies controlled by the United States Munitions List (“USML”) can apply for the visa and the license at the same time.
BCIS, with typical transparency, announced the revision and asked for comments in this public notice in the Federal Register. The public notice doesn’t reveal the nature of the proposed changes or how to find them other than suggesting that employers go try to find the proposed forms at regulations.gov. Good luck with that. We can only thank a loyal reader for tracking down the proposed, but undisclosed, changes in the visa application form.
Comments on this proposed change are due by April 9, 2010. Comments can be submitted by fax to 202–272–8352, or via e-mail to rfs.regs@dhs.gov.
Apr
14
DDTC Asks NSC For Guidance on Foreign National Rules
Posted by Clif Burns at 10:06 pm on April 14, 2009
Category: BIS • DDTC • Deemed Exports
An article (paid subscription required) in this week’s Washington Tariff & Trade Letter reports that at the Defense Trade Advisory Group (“DTAG”) meeting held on April 7, Frank Ruggiero, the Deputy Assistant Secretary of the Directorate of Defense Trade Controls (“DDTC”) announced that the agency had asked the National Security Council to review the treatment of foreign nationals under U.S. export laws. The DDTC request was sent at the end of March, but there is no current timetable for its consideration by the NSC inasmuch as the Obama administration is still putting together and organizing the new NSC.
At issue is the difference between the way the Bureau of Industry and Security (“BIS”) and DDTC treat foreign nationals with respect to approving transfer of controlled technical data to them. For example, DDTC may use the country of birth of a foreign national to deny licenses or agreements involving transfer of technical data to that individual. BIS, on the other hand, considers the individual’s current citizenship in evaluating his or her ability to receive controlled technical data regarding dual use items.
DDTC’s policy of considering country of birth has created some concern within the export community because it has been applied inconsistently and without any clear statement of applicable guidelines. In some formulations, it appears that the DDTC would automatically apply the policy to bar access to technical data by persons born in, but not citizens of, countries subject to arms embargos under section 126.1 of the International Traffic in Arms Regulations. At other times, DDTC has suggested that a case-by-case consideration would be applicable to foreign nationals born in proscribed countries, an approach that makes more sense when you consider situations such as a child of French diplomats born in China.
The policy has also drawn criticism from abroad. Human rights commissions in Canada and Australia have pointed out that the DDTC’s policy is, in effect, an illegal discrimination based on national origin. This has put U.S. contractors doing business in those countries in a difficult position since it is impossible for them to comply both with DDTC requirements and local laws.
Although a review of these issues for the purposes of achieving uniformity is laudable, DDTC’s motive in requesting that review is somewhat hard to determine. On the one hand, perhaps DDTC is looking for administrative cover to back away from its stricter rule and provide some relief from U.S. defense contractors with overseas operations. On the other hand, DDTC might simply be seeking to have its own narrower view imposed on BIS and other export agencies.
