1. Licensing of Intangible Transfers of Technology
John Sonderman
Office of Export Enforcement
Bureau of Industry and Security
U.S. Department of Commerce

2. Issue Should intangible technology transfers be regulated?
If the answer is yes: Procedures are needed for in-country transfers of controlled technology to prevent unauthorized export or diversion
Can in-country transfers be regulated?
U.S. “deemed” export rule
U.S. deemed reexport rule

3. Controlling Intangible Technology Transfer
Regulating the in-country transfer of controlled technology is a viable means to control intangible technology transfer
Problems:
Large number of foreign nationals in the domestic high technology work force
Mobile and transient work force
Global networks and economies that operate around the clock
Complicated by non-traditional, intangible methods of transfer

4. What is a deemed export?
Release in the United States of technology or source code subject to export control regulations to a foreign national
Such release is “deemed” to be an export to the home country or countries of the foreign national

5. Exempt from the Deemed Export Rule
Any foreign national is subject to the deemed export rule except:
Foreign nationals granted U.S. citizenship;
Foreign nationals granted permanent residence status; or,
Foreign nationals granted political refugee status or political asylum.

6. What is a deemed reexport?
Release of technology or source code subject to export control regulations to a foreign national of another country is a deemed reexport to the home country of that foreign national
Deemed reexport does not apply to persons lawfully admitted for permanent residence

12. Technology Control Plan
A Technology Control Plan must be in place with the following essential elements:
Corporate commitment to export compliance
Physical security plan
Information security plan
Procedural security
Personnel screening procedures
Training and awareness program for ALL employees
Self evaluation program
When we review a Technology Control Plan, we look at the following essential elements:
Corp. commitment: i.e., CEO letter to employees
Physical plan: i.e., badging, visitor plan, etc.
Info Security: i.e., firewalls, electronic monitoring of databases with controlled technology, intranet systems, etc
Personnel screening: i.e., hiring process, non disclosure statements, visa status, labor certification process, etc.
Self-eval: i.e., internal audits
Another important element is how a company classifies its technology and how it integrates this classification process into its personnel screening process.

13. Deemed Export Issues
Lack of awareness among exporters to deemed export requirements
Large number of foreign nationals entering the U.S. work force since end of the Cold War
Almost 50 % of graduates from U.S. universities in advanced science and engineering
Need a balance between providing opportunities and potential for diversion of advanced technology
Non-traditional sectors need to be addressed
University research
Government entities involved in research
Certain industry sectors

14. Outreach
Education and outreach has been key to raising industry level of awareness to in-country transfer requirements
Start by targeting sectors of concern
Use different venues
Include site visits
Outreach needs to include relevant government agencies involved in the process
Outreach helps licensing processes
Aids in the development of “best practices” Technology Control Plan

15. Summary
Export control requirement for in-country transfers is feasible from both a regulatory and practical perspective
A Technology Control Plan is an effective tool in managing access and preventing unauthorized disclosure
Including intangible technology transfer
Key to compliance is outreach and education
Important to consider measures for control of in-country transfers to insure that employment of foreign nationals do not provide a “back door” for the diversion of controlled technology