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Foreign Employee Visa Applications Linked to Deemed Export Certification
February 17, 2011
On February 20, 2011 the United States Citizen and Immigration Service (“USCIS”) will require employers submitting certain non-immigrant work visa applications for foreign employees to certify their compliance with U.S. export control laws governing the release of technology to foreign persons. Specifically, employers seeking to obtain, extend, or amend non-immigrant status for H-1B, L-1 and O-1 foreign employees must certify on the Form I-129 that they have reviewed the Export Administration Regulations (“EAR”) and the International Traffic in Arms Regulations (“ITAR”) and determined whether or not a license is required before releasing that technology to the foreign person employee (1).
The certification addresses what is known in the export compliance industry as the “deemed export” rule. Unlike the traditional notion of an export, a “deemed export” occurs when controlled technology is released to a foreign person entirely within the bounds of the United States. The export is “deemed” to be an export to that foreign person’s home country.
These rules are not new. They have been in place for decades, impose strict liability, and violations can result in severe civil and criminal penalties including imprisonment. Notwithstanding, until now many have remained unaware of their existence. The new certification requirement, made under pains and penalties of perjury, is set to change that—placing compliance firmly in the lap of all employers seeking to utilize foreign employees.
In order to complete the certification, employers must develop export compliance procedures that allow them to understand and continuously monitor the export control classification of the technology that it has access to. This includes technology relating to the employers own products as well as technology provided by clients and customers as part of the design and manufacturing process. The procedures must track who will have access to this technology and whether or not a license will be required prior to releasing that technology to the foreign employee. The procedure must also be dynamic—able to accommodate changes in products and technologies as well as job functions changes, which may expose foreign employees to controlled technology for the first time.
Technology controlled under the ITAR will almost certainly require a license or other form of approval from the Department of State before release to a foreign employee unless one of the few ITAR license exemptions applies. In contrast, most products and related technology subject to the EAR do not require a license prior to export or release to a foreign person within the U.S. Only technology that is classified in one of the ten different categories of the Commerce Control List (“CCL”) may be licensable. If it is listed on the CCL the employer must then determine whether export to the foreign person’s home country would require a license. If it does, and none of the many EAR exceptions apply, then a license will be required.
License applications can take considerable time (2 to 4+ months) and hence require advance planning when considering whether to hire a foreign employee. Denials are infrequent but possible and conditional employment offers may be necessary. A visa application certifying that a license is required may also trigger a Visa Mantis review—the State Department U.S. consular process used to screen visa applications involving key technology—possibly causing additional delays. Human resources must also tread the line between establishing a foreign person’s home country for export compliance purposes without falling afoul of discrimination laws based on ethnicity, race, and citizenship for example. Good documentation is critical. The USCIS, Department of State, or the Department of Commerce may engage in an audit at any time and without notice, requiring an employer to demonstrate its export compliance review and licensing determinations.
Even for those not filing visa applications the new certification requirement has important consequences—suggesting renewed focus by the U.S. government on enforcing compliance with the deemed export laws.
(1) “Technology” is used collectively to refer to “technical data” (as it is defined under the ITAR) and "technology" (as it is defined under the EAR). Broadly speaking, it can be anything that conveys technical know-how about a product and may include blueprints, drawings, photographs, plans, instructions, documentation, or even the product itself. A “release” encompasses all forms of disclosures, whether visual, verbal, deliberate, or inadvertent. A foreign person is anyone who is not a U.S. citizen, permanent resident (green card holder), asylee, refugee, or temporary resident granted amnesty.
This Alert is provided for information purposes only, and does not constitute legal advice. According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2011 Posternak Blankstein & Lund LLP. All rights reserved.