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Licensing of Intangible Transfers of Technology

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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

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