California Export Compliance Law
As LA-area Congressman Howard Berman observed in the San Jose Mercury News, the state of California – with more than 60,000 exporting firms and its high-tech industry, academic institutions and scientific/research establishments – is more heavily affected by export controls than any other. But as Berman also said:
You practically have to have a law degree or Ph.D. to keep from running afoul of the increasingly complex export controls regime. The regulations now fill more than 2,000 pages. More than 2,600 items and technologies are subject to controls, just in the dual-use [non-military] area. Exporters and universities are required to check six separate lists, with thousands of entries, of potentially dangerous individuals and groups before allowing access to controlled goods and technological information. In many cases, government approval is required.
Indeed, more than 22,000 licenses were issued in 2010 alone, and that number does not include applications for licenses that were denied.
ITAR & EAR
Many companies and institutions first encounter export controls when seeking to employ a non-citizen to work with American technology. That’s because allowing a foreign national to access such technology is “deemed” to be an export to that person’s home country, even if s/he will be working in the United States. In fact, you must now certify in your H1B Visa application for a foreigner that you have reviewed the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) and (a) you have determined that no license is required to release that technology to the foreign national or (b) you have applied for such a license and will deny access to technology until it has been granted.
If you determine that a license is required, moreover, you must – in your license application – describe the internal controls you have instituted to ensure that foreign nationals get access only to the technology they are licensed to receive. Such “compliance programs” are not necessarily expensive or cumbersome to implement, but they are important to have: Fines for violations – even if inadvertent – can run to $250,000 per violation, but fines that high are seldom imposed if the existence of such a program demonstrates your good faith effort to comply.
Export Compliance NE provides the expertise you need to guide your company through compliance with this complex area of the law at every stage of the company’s development, as well as the services of an experienced export control attorney to represent the company against the government in the unfortunate event that violations occur.