1. Export Controls – Deemed Export Advisory Committee Report
NCURA
Regional Spring Meeting
April 27, 2008

2. DEAC Report – Opening Statement
If you guard your toothbrushes and diamonds with equal zeal,
you’ll probably lose fewer toothbrushes and more diamonds.
McGeorge Bundy
National Security Advisor
to Presidents Kennedy & Johnson
11/20/2018

3. Background March 2004 IG report –
Commerce/Bureau of Industry and Security not protecting technology under deemed export rule
Lax application to industry and academia
Revise definition of “use technology” (and/or)
Look at country of origin, not current citizenship
11/20/2018

4. BIS Response to IG March 2005 ANPRM May 2006 Notices
Should definition of “use technology” be revised?
Use of country of origin?
May 2006 Notices
Will not revise definition
Will form a Deemed Export Advisory Committee to study the issue
11/20/2018

5. Formation of DEAC
June 2006
Balance among government, industry, and academia perspectives
Chair(s):
11/20/2018

6. DEAC Membership Analytic Services (former CIA) LSU (former NASA) UCLA
NAM (former Gov. of Michigan)
CO State
USAF/CIA
Duke/ORNL
Penn State
Applied Materials
UVA
BIS
11/20/2018

7. DEAC Meetings Open and closed session Six meetings
Washington, D.C. (2)
Santa Clara, CA
Atlanta, GA
Cambridge, MA
Chicago, IL
11/20/2018

8. DEAC Observations
Build “high walls” around smaller areas- few highly sensitive technologies with significant military applications
U.S. is only nation that controls deemed exports and participates in multilateral export control regimes
Other countries relay on visa processes, intelligence, and commercial IP controls
11/20/2018

9. DEAC Observations
U.S. Research enterprise would barely function without foreign nationals
NSF:
Graduation of U.S. citizen engineers declined by 20% over last two decades
2/3 of engineering PhDs are granted to non-citizens
Greater use of dual-use, not just military, technology by DOD
11/20/2018

10. DEAC Findings
Most technology will not be denied by U.S. export controls; it will be obtained by other countries
Current Commerce Control List is too all-encompassing – includes:
Police handcuffs
Hunting rifles
Conventional radios
Mass-market computers
11/20/2018

11. DEAC Findings
Results of fundamental research not subject to deemed export rule but knowledge relating to operation of lab equipment may be subject to control.
Deemed export rule not working – only 1% rejected. 54% of applications from three U.S. companies.
11/20/2018

12. DEAC Findings
Many “escapements” to the rule – foreign-born person who becomes U.S. citizen is not covered; most export violations by U.S. citizens
“Use” technology – “operation, installation, maintenance, repair, overhaul and refurbishing.” But what about collusion among team members to learn parts of the six?
Country of origin
11/20/2018

13. DEAC Recommendations
Systematically review the CCL to remove low consequence items and technologies
Use a panel of scientific and engineering experts to conduct annual “sunset” review
Establish a category of “Trusted Entities”
Voluntarily elect to qualify for streamlined treatment
11/20/2018

14. Deemed Export Design Construct
11/20/2018

15. Deemed Export Design Construct
11/20/2018

16. Deemed Export Design Construct
11/20/2018

17. Deemed Export Design Construct
Step I – conduct overall assessment of probable loyalty of the individual
Include consideration of time and character of past and present foreign involvements
Indication of tie to terrorist-supporting country would result in denial
Step II – is information classified?
11/20/2018

18. Deemed Export Design Construct
Step III – is military application truly significant?
Focus on nuclear weapon technology, toxic biologic agents, chemical warfare, cryptology
Step IV – is information readily available outside the US?
11/20/2018

19. Deemed Export Design Construct
Step V – is activity fundamental research?
Old definition: “ordinarily published”
Proposed definition:
Falls within conventional definition (e.g. “curiosity-driven research seeking new knowledge”) or
Is not precluded from publication by contract or regulation
11/20/2018

20. Deemed Export Design Construct
Step VI – is the organization seeking the license a Trusted Entity?
Once qualified, could transfer people, knowledge equipment based on self-assessment
Step VII – are there any remaining material adverse consequences, military, commercial, or political of a release?
11/20/2018

21. Alternatives Rejected by the DEAC
Rely on security classification to protect information
Doesn’t account for commercial competitiveness
Rely on visa approval system to determine license approval
Visa review staff are not equipped to make commercial and national security decisions about leading-edge science and technology
11/20/2018

22. BIS Response to DEAC Report
Increased training about deemed export rule
Plan to publish Fed. Reg. notice about what technology should be protected by the rule
Will convene a group of S&T experts for a “zero-based review” of CCL
Interested in flagging emerging technology
BIS is updating website to add guidance
Proposed rule on intra-company license exception
Would allow export to foreign affiliates
Under interagency review
11/20/2018

23. BIS Response to DEAC Report
“Notice of Inquiry” to request comment
use of citizenship
develop objective criteria for considering
past and present nationalities and residences
when authorizing deemed exports
develop criteria for determining which technology should be protected
11/20/2018

24. Post-DEAC Issues to Monitor
Future opportunities to comment
Technology
Use of citizenship
Definition of fundamental research
Deemed Export Design Construct would need to be revised and re-ordered to feasibly implement
Use of Trusted Entity concept
11/20/2018