Deemed Export Rules Make Research a Commodity

Language isn’t the only barrier that complicates collaboration among scientists from different countries. Many researchers also find themselves struggling to communicate with foreign colleagues while adhering to export regulations that restrict information exchanged within the United States.


At first thought, defining “export” might seem simple enough: an item transported from one country to another.

But the U.S. government also has regulations for “deemed exports.” Under those rules, an export is deemed to have occurred when technical knowledge that could have military or defense implications is given to someone who is not a U.S. citizen. Once he or she possesses the knowledge, the rationale goes, the foreign national can transmit it to people in other countries, thus exporting it.

In some cases, the deemed export rules allow knowledge to be shared only after a license is obtained from the Commerce Department. In other cases, information sharing is banned altogether.

As a result, foreign students might be barred from research projects or forbidden from using certain equipment. Moreover, U.S. scientists may be excluded from multinational collaborations, and American companies with global operations can be prevented from taking full advantage of their international workforce.

Some scientists, academic administrators and high-tech business executives have complained that the regulations are too complex and that they hamper American research and education.

In a joint statement, a dozen business associations—including the Association for Manufacturing Technology, the Computer and Communications Industry Association, and the Information Technology Industry Council—have warned that companies might be forced to move their research activities overseas in order to avoid the regulations.

In response to the complaints, the Commerce Department appointed a Deemed Exports Advisory Committee comprised of current and former executives from business, education and government institutions. The committee reported at the end of last year, and the department has begun to respond to the panel’s recommendations.

The deemed export regulations cover so-called “dual-use” technologies, which have both civilian and military applications. Among the 2,400 regulated items—which appear on the Commerce Department’s “Commerce Control List”—are advanced electronic equipment, precision machine tools, jet engines, synthetic materials, global positioning system technology and specialized testing equipment.

Some items—and information about them—can’t be exported anywhere. Those include technologies related to high-tech weapons, for example. Other items are banned from certain countries, and from citizens and permanent residents of those countries.

In general, the tightest restrictions are imposed on members of the old Communist bloc and countries said to sponsor terrorism. The loosest are applied to America’s closest allies in Western Europe, North America and the Far East.

The regulations don’t restrict fundamental research, which is defined as research whose results normally would be “published and shared broadly within the scientific community.”

The rules’ origins can be traced to export legislation that was passed shortly after World War II and was intended primarily to regulate physical goods. The regulations have been revised several times, but critics contend that they remain more appropriate for the Industrial Age and the Cold War than the 21st century.

“That was a world where the United States was dominant in technology and in commerce, and where the national-security threat was from a single bloc of nations,” said Norman Augustine, retired head of Lockheed Martin Corp. and chairman of the advisory committee.

Since then, global science and commerce have become much more competitive, Augustine said. The national security threat is more diverse. In addition, an increasing number of U.S. companies operate internationally, and more professors are collaborating with their counterparts around the world. Modern information technology makes it difficult to prevent the transfer of knowledge across national borders.

“In this new world order,” Augustine’s committee stated, “a nation that attempts to build a wall around its scientific and technologic communities simply denies itself the opportunity to fully benefit from the vast body of knowledge being accumulated elsewhere—and thereby virtually assures itself of an inferior competitive position in the knowledge world.”

Erosion of American science would weaken the U.S. military, which built its global supremacy on scientific advances, the committee added.

The committee acknowledged that the government needs to restrict access to knowledge in “a very few highly sensitive military areas.” But the current Commerce Control List is far too large, they said.

High-performance computer systems were placed on the list in 1998, for example. Although they are currently manufactured around the world, they remain listed as though only U.S. companies could make them. The list even contains such low-tech items as handcuffs and hunting rifles.

The committee recommended that the Commerce Department:

  • Consult with independent experts to pare the control list to technology that has the “greatest consequences” to national security.

  • Appoint independent experts to review the list each year.

  • Lift restrictions on items that are readily available outside the United States, such as mass-market computers.

  • Examine an individual’s character and activities—and not just nationality and residence—to assess his or her “proposed loyalties” and decide whether to allow him or her access to controlled technology.

  • Create a more precise definition of “fundamental research.”

  • Identify business and scholarly organizations that can be trusted for fast-track processing of deemed export license applications.

In the Commerce Department’s first response to the committee’s report, Under Secretary Mario Mancuso announced in February the creation of a panel to periodically make recommendations regarding “emerging technologies.” That committee, with representatives from businesses, universities and government laboratories, can suggest additions to, and removals from, the Control List, department spokesman Eugene Cotilli said.

The department said it is working with other government agencies to prepare additional responses. Although the department has not released a timetable, Augustine said he expects most of the committee’s proposals to be acted on by the end of this year.

Reaction to the committee’s report and the government’s response has been mixed.

Tobin Smith, associate vice president of the Association of American Universities, endorsed many of the committee’s recommendations and praised the Commerce Department for opening a dialogue.

Frequent review of the Control List is essential, because the current list “has gotten too cumbersome and outdated,” Tobin said. “It’s easy to add things but too hard to take things off.”

The AAU opposes changing the definition of fundamental research, he said. A narrower definition could lead to more, rather than fewer, restrictions on researchers. The organization also is concerned about the committee’s proposal for assessing a foreign national’s loyalties.

The coalition of business associations weighed in with similar comments.

While praising the committee’s proposal for a shorter control list, the business groups complained that the panel failed to provide clear guidance for determining what should be regulated. The businesses also warned that the proposed loyalty test could expand the number of foreign nationals subject to export restrictions.

Augustine said critics need to recognize that “there’s no perfect answer.”

For example, excessively strict regulations would prevent U.S. businesses and academic institutions from competing effectively with their counterparts overseas, he said. “At the other extreme, one could design a system that was so liberal it would provide little or no protection [of sensitive information].” His committee tried to find the best balance.

Committee members were not qualified to produce a detailed list of items that should be controlled, Augustine said. But Commerce Department officials understand that “we’re looking for a list with five or six items on it, not 400.”

He said he expects the department to act on the report “in good faith.”

For more information on deemed exports, please view the presentation given by Beth Peterson, President, BPE Inc., to the OSA Corporate Associates Committee in May 2008. Ms. Peterson provided an overview of the issue, including the rules that are in place and the penalties that companies will face if they fail to comply with them. She also discusses how companies are managing technology control.

[ Tom Price is a freelance journalist who specializes in public policy issues. ]

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Deemed Export Rules Make Research a Commodity

Language isn’t the only barrier that complicates collaboration among scientists from different countries. Many researchers also find themselves struggling to communicate with foreign colleagues while adhering to export regulations that restrict information exchanged within the United States.

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