Export Compliance: "Deemed Exports" and Non-US Persons
 

What is a "Deemed Export" Rule and a Foreign National?

An export of technology or source code (except encryption source code) is "deemed" to take place when it is released to a foreign national within the US. (See 15 CFR §734.2(b)(2)(ii) of the Export Administration Regulations (EAR).

Technology is "released" for export when it is available to foreign nationals for visual inspection (e.g. reading technical specifications, plans, blueprints, etc.); when technology is exchanged orally; or when technology is made available by practice or application under the guidance of persons with knowledge of the technology. See 15 CFR §734.2(b)(3).

Per §772 of the Export Administration Regulations (EAR), "technology" is specific information necessary for the "development," "production," or "use" of a product. The General Technology Note states that the "export of technology...is controlled according to the provisions of each Category." It further states that "technology required for the development, production, or use of a controlled product remains controlled even when applicable to a product controlled at a lower level." Please note that the terms "required," "development," "production," "use," and "technology" are all defined in §772 of the EAR. Controlled technology is that which is listed on the Commerce Control List.

Any foreign national is subject to the "deemed export" rule except a foreign national who (1) is granted permanent residence, as demonstrated by the issuance of a permanent resident visa (i.e., "Green Card"); or (2) is granted U.S. citizenship; or (3) is granted status as a "protected person" under 8 U.S.C. 1324b(a)(3). Foreign nationals include all persons in the U.S. as tourists, students, businesspeople, scholars, researchers, technical experts, sailors, airline personnel, salespeople, military personnel, diplomats, etc. As noted, one exception to this general statement is a "protected person." "Protected persons" include political refugees and political asylum holders. Be aware that individuals seeking "protected person" status must satisfy all of the terms and conditions that are fully set forth in 8 U.S.C. 1324b(a)(3). It should be emphasized that although the deemed export rule may be triggered, this does not necessarily mean that a license is required, since the technology may be license exception eligible.

For individuals who are citizens of more than one foreign country, or have citizenship in one foreign country and permanent residence in another, as a general policy, the last permanent resident status or citizenship obtained controls. If, for some reason, the status of a foreign national is uncertain, then the issue may be referred to the Bureau of Industry and Security (BIS), to determine where the stronger ties lie, based on the facts of the specific case. In response to a request for the status of a foreign national, BIS will scrutinize the foreign national's family, professional, financial, and employment ties.

 
 

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