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

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Export controls deemed export advisory committee report

Export Controls – Deemed Export Advisory Committee Report

NCURA

Regional Spring Meeting

April 27, 2008


Deac report opening statement
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


Background
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


Bis response to ig
BIS Response to IG

  • March 2005 ANPRM

    • 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


Formation of deac
Formation of DEAC

  • June 2006

  • Balance among government, industry, and academia perspectives

  • Chair(s):


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

DEAC Membership


Deac meetings
DEAC Meetings

  • Open and closed session

  • Six meetings

    • Washington, D.C. (2)

    • Santa Clara, CA

    • Atlanta, GA

    • Cambridge, MA

    • Chicago, IL


Deac observations
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


Deac observations1
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


Deac findings
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


Deac findings1
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.


Deac findings2
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


Deac recommendations
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





Deemed export design construct3
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?


Deemed export design construct4
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?


Deemed export design construct5
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


Deemed export design construct6
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?


Alternatives rejected by the deac
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


Bis response to deac report
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


Bis response to deac report1
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


Post deac issues to monitor
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


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