New Requirements for Employers of Non-Immigrants: Must Certify Compliance with Deemed Export Rules
The United States Citizenship and Immigration Service (“USCIS”) announced a new version of the Form I-129, requiring employers petitioning for certain visa categories to certify whether a license is required under the Export Administration Regulations (“EAR”) or the International Traffic in Arms Regulations (“ITAR”) with respect to any technology or technical data they intend to release to a foreign national. The EAR control the export of so-called “dual use” items – i.e., hardware, software, and technical data that have both commercial and military applicability – and the ITAR control the export of defense articles and related technical data. The revisions were announced on November 10, 2010, and the revised form became available on November 23, 2010. As of December 23, 2010, it will be mandatory for employers to use the revised form. While the US government has long regulated the transfer of technical data to foreign national employees, the new form will, for the first time, make export controls an explicit part of the immigration application process.
US employers petitioning for a non-immigrant H-1B, H-1B1(Chile/Singapore), L-1, or O-1 employment visa must now certify that “[w]ith respect to the technology or technical data the petitioner will release or otherwise provide access to the beneficiary…it has reviewed the EAR and the ITAR and has determined that:  A license is not required from the US Department of Commerce or the US Department of State to release such technology or technical data to the foreign person; or  A license is required from the US Department of Commerce and/or the US Department of State to release such technology or technical data to the beneficiary and the petitioner will prevent access to the controlled technology or technical data by the beneficiary until and unless the petitioner has received the required license or other authorization to release it to the beneficiary.”
This new certification stems from the so-called “deemed export rule” under the EAR and ITAR, which provides that the transfer, release, or disclosure of technical data to a citizen or national of a foreign country is deemed to be an export of technical data to that country. Employers should be aware that the deemed export rule applies differently under the EAR and the ITAR, so one needs to be sensitive to each agency's rules and approach and not assume the same analysis can be used to complete the certification. With regard to the EAR, the Commerce Department view is that the foreign person’s most recently acquired country of citizenship or lawful residence is typically considered to be the destination country. Under the ITAR, all prior countries of citizenship, nationality, or birth may be considered as "destinations" for export control purposes.
One of the many challenges the new Form I-129 creates for employers is predicting to what technical data an employee will have access and how that access may affect the employee’s visa. Many employers are not able to determine the exact technologies to which an employee will be exposed in the course of his or her employment. Thus, while an export control license might not be required initially, it might become necessary after the employee has started working. At a minimum, the new form will require employers to focus on this issue at the outset, and to keep it in mind throughout the course of employment.
It is not clear how USCIS will use the new data it is acquiring. For example, if an employer indicates that a potential employee will have access to controlled technical data, it is possible but not certain that USCIS will conduct a more extensive background check of that individual prior to granting a non-immigrant visa. In addition, it is unclear whether the data collected by USCIS will be shared with other US government agencies.
Inaccurate certifications on the Form I-129 may expose employers to liability for false statements to the US government, and failure to obtain authorization for exports requiring a license may result in additional penalties under the relevant export control laws. Failure to comply with the ITAR may result in civil fines of up to $500,000 per violation, and criminal penalties of up to $1 million and ten years imprisonment per violation. Under the EAR, maximum civil fines may reach $250,000 per violation, while criminal penalties may be as high as $1 million and 20 years imprisonment per violation. These types of penalties are not typical for immigration violations and highlight the significance of the new certification requirement.
Employers of foreign nationals must now have export compliance systems in place that enable relevant personnel, including compliance, human resources, legal, engineering, and others to work together to determine whether a deemed export license is required under US export control laws. Such internal compliance measures ought to provide for the classification of technical data; establish a mechanism for identifying positions that may require access to that data; ensure that any controlled data are properly stored and only authorized personnel have access to the data; and collect sufficient information on the citizenship and nationality of potential employees in order to determine whether a license may be required. While the updated Form I-129 references only the EAR and ITAR, other agencies, including those controlling nuclear technology (e.g., the Department of Energy and the Nuclear Regulatory Commission), also regulate deemed exports of controlled technology to foreign nationals; alert employers will be aware of all relevant regulations. In addition, employers may wish to review the access to controlled technical data by current employees who are working in the United States on a non-immigrant visa to determine whether any remedial steps are warranted.
Human resources departments need to review how they work with the relevant functional areas early in the hiring process to determine compliance requirements in order to avoid making a false statement on the I-129 form, as well as to allow for sufficient lead time to obtain any necessary export licenses. Human resources personnel will be faced with coordinating internal compliance policies relating to gathering citizenship and nationality information, as well as policies limiting access of technical data to foreign nationals. These policies must not violate workplace discrimination policies and laws. While information on citizenship and nationality can be gathered on an as-needed basis to determine compliance with export controls, human resources personnel should confirm that the process implemented to gather that information and the use of the information after it is gathered is appropriate under US law. Finally, employers must be aware that not all controlled technical data will require a license to export to foreign national employees, and that sometimes exclusions from export control requirements are applicable. For example, many foreign nationals employed under H-1B visas at universities as scientists or researchers may conduct “fundamental research,” which is not subject to export control requirements. Exceptions or exclusions from license requirements are often narrow, and they should be relied upon only after a careful review of the relevant regulations. Not all research, for example, qualifies as “fundamental research,” and many research efforts may require that an employer obtain an export license for its foreign national employees. To avoid potentially large penalties, employers must take proactive steps to ensure that their immigration and export controls compliance practices are integrated, even in the earliest stages of the hiring process.
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