The U.S. Citizenship and Immigration Service’s requirement for “Certification Regarding the Release of Controlled Technology or Technical Data to Foreign Persons in the United States” will go into effect on February 20, 2011.
The certification applies to employers submitting petitions under the visa categories H-1B (specialty occupation), H-1B1 (specialty occupation professionals from Singapore or Chile), L-1 (intra-company transferees) or O-1A (extraordinary ability). The requirement will impact universities, as well as aerospace, defense, high-tech, and advanced manufacturing businesses and organizations, regardless of size.
The certification requirement was to go into effect on December 23, 2010, but has been delayed for 2 months. The so-called “Part 6” certification is found on Form I-129 (Petition for a Nonimmigrant Worker) and is aimed at enforcing the “deemed export” rule. A “deemed export” refers to the release of technology or technical data that is subject to either the U.S. Department of Commerce Export Administration Regulations (EAR) or the U.S. Department of State International Traffic in Arms Regulations (ITAR). The release of such information to a foreign national inside the U.S. is considered to be a “deemed export” to the foreign national's country of residence or, in some instances, to that person’s country of birth. A “deemed export” may be subject to an export license requirement. Making a “deemed export” without a required license is a violation of the EAR or the ITAR and is subject to administrative, civil, and even criminal penalties.
A “deemed export” can occur in many forms, including visual inspection (such as providing technical specifications, schematics, blueprints, etc.), a verbal exchange of the technology or technical data, or when the information is made available through business practices. Business meetings, conference calls, videoconferences, PowerPoint presentations, trade shows, and email exchanges all present instances in which a “deemed export” could occur.
As of February 20, employers submitting an I-129 petition under one of the covered visa categories will have to certify that: 1) it has reviewed the EAR and the ITAR; and either a) it has determined that an export license is not required for the release of technology or technical data to the beneficiary; or b) if an export license is required, that the beneficiary will not have access to the information until the employer obtains the required license.
Employers should plan now for the additional time needed to assess whether foreign national employees will have access to technology or technical data controlled under the EAR or the ITAR, determine whether an export license is required and, if so, submit a license application. In addition, employers should fully document the decision-making process so that it can be relied upon should questions arise. Failing to take these necessary steps and properly certify the I-129 petition will likely lead to entity-level administrative and civil penalties, as well as the possibility of entity-level and individual criminal penalties being imposed. If an employer becomes concerned that a violation may have already occurred, it should seek assistance to determine whether to make a voluntary self-disclosure (VSD) to all involved agencies.
15 January 2011
13 January 2011
Former NASA Employee in Ohio Charged with ITAR Violation
A former employee of the NASA Glenn Research Center in Cleveland has been charged with one count of violating the Arms Export Control Act (AECA) and the International Traffic in Arms regulations (ITAR).
An Information filed in the U.S. District Court for the Northern District of Ohio alleges that between 2000 and 2005, the defendant violated the AECA and the ITAR by knowingly and willfully exporting defense articles to South Korea without an export license obtained from the Department of State. The Information alleges that the defendant did not obtain a license prior to exporting infra red focal plane array detectors and infra red camera engines, which are on the U.S. Munitions List (USML). A second count of filing a false tax return was also included.
The charges against the former NASA employee come less than a week after the Sixth Circuit Court of Appeals (which has jurisdiction over cases from the federal courts in Kentucky, Michigan, Ohio, and Tennessee) upheld the conviction of former University of Tennessee professor John Roth on multiple counts of violating the AECA and the ITAR. The court of appeals rejected Roth’s argument that the jury in his trial should have been instructed that he could be convicted only if it found that “he knew the data and items he allegedly exported were listed on the United States Munitions List.” The court held that a conviction under the AECA does not require such evidence, but only that the defendant had “knowledge that the underlying action is unlawful.”
The court also rejected Roth’s contention that the ITAR-controlled plasma actuator testing data that he transferred to foreign nationals was not a defense article or defense services. The court ruled that the ITAR export controls extend to “all stages of defense projects that are covered by the [AECA], not just the final stages when military devices are directly involved.” The court noted that “technical data” and “defense articles” recognize that research is performed in multiple stages and that the ITAR applies to each stage. The court found that Roth’s argument ignored “the fact that the final goal of Phase II was to incorporate plasma actuators on military drone aircraft.”
The Roth decision is now the backdrop against which the recently charged former NASA employee must attempt to defend himself. While his actions appear to have been unknown to NASA, the case is yet another reminder for aerospace and defense companies and their employees to be knowledgeable about the ITAR regulations and that proper internal controls, starting with a written and enforced compliance policy, are in place to avoid even unknowing violations.
An Information filed in the U.S. District Court for the Northern District of Ohio alleges that between 2000 and 2005, the defendant violated the AECA and the ITAR by knowingly and willfully exporting defense articles to South Korea without an export license obtained from the Department of State. The Information alleges that the defendant did not obtain a license prior to exporting infra red focal plane array detectors and infra red camera engines, which are on the U.S. Munitions List (USML). A second count of filing a false tax return was also included.
The charges against the former NASA employee come less than a week after the Sixth Circuit Court of Appeals (which has jurisdiction over cases from the federal courts in Kentucky, Michigan, Ohio, and Tennessee) upheld the conviction of former University of Tennessee professor John Roth on multiple counts of violating the AECA and the ITAR. The court of appeals rejected Roth’s argument that the jury in his trial should have been instructed that he could be convicted only if it found that “he knew the data and items he allegedly exported were listed on the United States Munitions List.” The court held that a conviction under the AECA does not require such evidence, but only that the defendant had “knowledge that the underlying action is unlawful.”
The court also rejected Roth’s contention that the ITAR-controlled plasma actuator testing data that he transferred to foreign nationals was not a defense article or defense services. The court ruled that the ITAR export controls extend to “all stages of defense projects that are covered by the [AECA], not just the final stages when military devices are directly involved.” The court noted that “technical data” and “defense articles” recognize that research is performed in multiple stages and that the ITAR applies to each stage. The court found that Roth’s argument ignored “the fact that the final goal of Phase II was to incorporate plasma actuators on military drone aircraft.”
The Roth decision is now the backdrop against which the recently charged former NASA employee must attempt to defend himself. While his actions appear to have been unknown to NASA, the case is yet another reminder for aerospace and defense companies and their employees to be knowledgeable about the ITAR regulations and that proper internal controls, starting with a written and enforced compliance policy, are in place to avoid even unknowing violations.
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