What does “Deemed Export” mean?
Export of technology and intangible components from one country to another or within the United States is possible. Under the EAR, Deemed exports refer to a transaction of sharing controlled technical data or goods to a foreigner in the US. The U.S laws and regulations that deal with deemed export controls are EAR and ITAR.
The EAR deals with dual use products and technologies while the ITAR deals with military use technologies and products.
Who needs to know about export controls laws in the US?
The organizations and corporations in the U.S that are typically concerned with EAR deemed export laws are as follows.
- Universities
- High tech research institutes
- Development institutes
- Biochemical organizations
- Medical and computer fields.
The above list is far from comprehensive. All U.S companies and non U.S companies dealing with U.S technology should check with a compliance professional to be sure of the steps they need to take to meet compliance requirements. With Deemed Exports, it is essential to acquire an export license from DDTC or BIS prior to the transfer or release of controlled technology to a foreign national.
Deemed export and overseas offices
The issue of deemed exports is also associated with overseas offices. If worldwide transfers involve US-based technology, then export limitations can be applied. Hence, employees in overseas offices must be mindful of who they share data with, even their team members are local hires of the overseas office.
What are deemed re-exports?
When EAR controlled U.S technology or source code is provided to a foreign immigrant in a third country from outside the U.S, it is called a deemed re-export.
Exclusions from Deemed Exports
The “deemed export” rule allows exemptions in many scenarios. For example, organizations that exchange technology with entities only of US nationality, and individuals having “safe persons” status may gain exemptions from deemed export rules.
How does it affect your business?
Technologies evolved in a foreign facility similar to or developed from controlled American origin technology may need a license if these technologies are regarded as of American origin and fall within the scope covering deemed export rules.
You may require export licenses for foreign technicians, visitors, engineers, and researchers in your team who may gain access to information like technology, drawings, and source code.
If your organization is thinking of outsourcing production lines or coding processes, the critical requirement for this compliance is that the production technology that will be shipped abroad is not on the Commerce Control List or controlled by any other government agency.
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