Where Industry and Security Intersect
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The Deemed Export Advisory Committee (DEAC) met in open session on July 30, 2007, from 9:02 a.m.-11:54 a.m. at the University of Chicago in the Donnelley Biological Sciences Learning Center’s (BSLC) Conference Room, Room 009, 924 East 57th Street, Room 115, Chicago, IL. There were 45 persons in attendance. The meeting was followed by a tour of the Biological and Physical Science labs at the University of Chicago. On July 31, 2007, the Committee met again in closed session at Argonne National Labs, 9700 Cass Avenue, Argonne, Illinois.
The DEAC is a Federal Advisory Committee set up under the requirements of the Federal Advisory Committee Act. It is tasked to advise the Secretary of Commerce on deemed export policy.
DEAC Members Present:
Mr. Norm Augustine, Chairman
Dr. Ruth David, Co-Vice Chair
The Honorable Sean O’Keefe, Co-Vice Chair
Dr. Albert Carnesale
The Honorable John Engler (present July 31 only)
Dr. Anthony A. Frank
Dr. William A. Wulf
DEAC Members Not Present:
General John A. Gordon
Dr. Eva J. Pell
Mr. James N. Siedow
Mr. Mike Splinter
Note: The text that appears below each speaker’s name is a summary of that individual’s remarks.
Chairman’s Opening Remarks: Mr. Augustine expressed his appreciation to the University of Chicago and to all who made the event possible. He stated the DEAC has met in various places around the country. The Committee is in the information gathering phase and further deliberations are necessary before it comes to a consensus. Mr. Augustine stated it was his view that the United States is dominant in the world economy, but this is not a time to be complacent. In the past, if the United States did not share its information with someone, it did not have an alternative source and did not receive it. Today, many projects undertaken by universities and businesses are collaborative efforts which happen on a global scale. The United States cannot afford to build walls; this might cause its institutions to be left behind. The nation needs to think on a global scale but have an open door policy which allows us to defend ourselves from harm. We need to achieve balance.
Designated Federal Official’s Opening Remarks: Mr. Bernard Kritzer, Director, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, U.S. Department of Commerce, thanked the University of Chicago for making the facility available. He also thanked all others for their attendance. He restated the mission of the DEAC and discussed the basis of the deemed export rule, and said numerous ideas have been contributed to help improve the process. The DEAC has met in several public meetings and has listened to a host of issues of concern from both universities and industry. He spoke supportively of the DEAC’s investigative process with both industry and universities alike. He emphasized their interactions have contributed to the Committee’s deliberations.
Other DEAC Member’s Opening Remarks: Dr. David said the DEAC needs to write a policy which will support the United States in the world for decades to come and the Committee welcomed thoughts and suggestions in that regard. Mr. O’Keefe stated evolving global competitiveness is forcing a new look at existing policies and governmental policies should not erode or damage U.S. competitiveness. He continued by pointing out the DEAC has an opportunity now to offer solutions and fix the problem. Dr. Carnesale said he thought the DEAC was still very much in the receiving mode, rather than transmitting.
SCHEDULED PRESENTERS:
Dr. Keith Moffat, Deputy Provost for Research and Professor of Biochemistry and Molecular Biology, University of Chicago
Remarks: The University of Chicago is a world class research university, 13th in the global list of the top 200 research universities according to Times’ Higher Educational Supplement, 2004. More than two thousand graduate and professional students are foreign nationals from more than 90 countries; 60-85% of them are post doctoral appointees. Recruitment at the university is on the basis of academic and research merit. The institutions objective is to educate the next generation of world leaders. The open nature and approach of both the academic and research enterprise has contributed significantly to the U.S. position of leadership in research, technology, education, innovation and economic competitiveness. This must not be surrendered, even when balanced against other needs such as homeland security and economic competitiveness. Balance is the key; the open approach must be actively considered and weighed.
Recommendations:
--DEAC should recommend that participation in sensitive research can be monitored not only through the visa process, but by letting university staff and researchers know who may pose a risk to national security in advance. Once lawfully cleared and admitted, faculty, students and staff should participate on equal footing in the research environment.
-- Deemed export controls can only be effective within the university environment by paring the Commerce Control List to include only those technologies which in the wrong hands truly jeopardize national and economic security. For those items remaining on the list, the DEAC should create a licensing process that is quick and speedy. Frontier research moves quickly and time is normally of the essence.
--Continue to rely on classification as the principal mechanism for the control and protection of information and technology which raise national security concerns. The University of Chicago supports NSDD-189; the products of fundamental research should remain unrestricted.
-- We should strive for balance in an open approach to research and education along with national security and economic competitiveness.
Mr. Gerald L. Epstein, Center for Strategic and International Studies
Remarks: The Center for Strategic and International Studies (CSIS) on Scientific Communication and National Security (CSCANS) has 27 senior members from the security and the scientific communities. In cooperation with the National Academy of Sciences, it published two white papers in 2005. Current U.S. policy was codified in the Reagan-era through NSDD-189, “National Policy on the Transfer of Scientific, Technical, and Engineering Information.” NSDD-189 was motivated by tensions over government reaction to concerns over Soviet acquisition of microelectronics and cryptography research in the late 1970s and early 1980s. It drew on the National Academy’s 1982 Corson Report “Scientific Communication and National Security.”
CSCANS view is that NSDD-189 does not assert that openness in fundamental research is without risk. Rather, it says openness is so important to U.S. security – and to other national objectives – it warrants the risk that adversaries may benefit from it as well. Although today’s adversaries differ from those in 1985, the global science and technology landscape has also evolved. If anything, the ability to constrain the adverse implications of science and technology by unilateral restrictions on their dissemination is poorer now than 1985. Epstein’s view is if there is surprise our nation’s universities are being exploited for their knowledge and technologies, this is a little like being shocked and amazed people are going into grocery stores and coming out with food. NSDD-189’s approach may be the price of engaging world class research institutions in national security problems. In a world of globalized science and technology, security comes from windows and not walls.
Recommendations:
--Deemed export controls on “use” technology transferred in the performance of unclassified fundamental research are inconsistent with NSDD-189. The burden should be upon the USG to demonstrate an illegal technology transfer is intended or substantially likely before the licensing of individual students or researchers is necessary.
--There is no evidence a lack of deemed export controls has lead to a security breach.
--“Use” controls are very difficult to administer in a university setting. It would be far better to allow self-governance by the research community.
Mr. Robert Rarog, Export Policy Manager, Sun Microsystems
Remarks: Sun Microsystems products and services range from web serving to high performance computer systems, but the company’s real focus is on network computing. Sun designs its own microprocessor and maintains development centers in the Peoples Republic of China (PRC), India and Russia. Sun is a major user of deemed export licenses and foreign national reviews (FNRs). Sun feels innovation is at the core of competitive advantage in the U.S. industrial technology industry. Sun must have access to the best talent available, but increasingly, the pools of technical staff with graduate degrees are non-U.S. nationals (primarily from the PRC and India). These graduates bring exposure to the latest technology and techniques.
Sun uses an internal control program which encompasses classification and screening for all products and technology in the U.S. and its overseas locations. The company’s export functions are built into its business procedures and activities. Sun requires export training for all of its employees. In its management of deemed export controls, it has licenses or FNRs which apply to about 50 individuals at any one time. The control program includes electronic access and is tailored to individuals and specific control requirements. This is a challenge Sun has met while managing technology control lines. The thresholds for control are arbitrary because they are often tied to product performance, even when the product may not currently exist). The current approach to deemed exports causes some harm because implementation often results in over-control, disproportionate disruptions of our normal business practices, and high compliance costs and risks.
Recommendations:
--Recognize commercial technology must be readily available within U.S. companies and guarded by them. Included in this statement is the wider problem of including availability of company data to U.S. subsidiaries overseas. It is recommended a hybrid license exception be created for intra-company technology transfers to all employees.
--Develop more thorough government screening of individuals at the water’s edge (via the visa process).
Exclude multilateral controlled proliferation items.
-- Establish a registration procedure to alert enforcement agencies which companies are using the exception.
-- Establish compliance standards for company execution and management.
Review and audit by the government as needed.
The DEAC also met in a closed session on Monday, July 30 from 12:00- 2:00pm. It toured the physical science and biology labs at Chicago University that evening. It also met on Tuesday, July 31, at Argonne National Labs for closed and classified briefings on national security issues.