by Gary Jones
FLC Washington, DC Representative
Greetings from DC. A year ago I highlighted several federal advisory committees then recently established by the Department of Commerce to study and report on issues important to our community. On December 20, 2007, one of those committees, the Deemed Export Advisory Committee (DEAC), issued its final report to Commerce Secretary Gutierrez.
The report's conclusions regarding the efficacy of the current deemed export regime are unambiguous, stating that it "no longer effectively serves its intended purpose and should be replaced with an approach that better reflects the realities of today's national security needs and global economy." The current regime has been made obsolete, it noted, by a combination of significant developments in S&T, freely flowing information exchange, human resource mobility, evolving national economies, and the changing character of threats to America's security. The report proposes a fundamentally new approach to controlling deemed exports.
As the report describes, a deemed export is essentially the release of technology or source code having both military and civilian applications to foreign nationals within the United States. The control of deemed exports has clear commercial and security implications. In practical terms, U.S. industry that has foreign nationals working in a lab environment may be constrained from allowing that individual access to information in the normal course of business if that information has military applications. The same issue may arise when foreign nationals participate as students in university research. In both cases, export licenses may be required.
The challenge in deemed export policy is trying to balance the recognition that foreign nationals make profound contributions to U.S competitiveness and national security, particularly in the area of S&T, with the reality that there are bad people in the world who would like to harm us, using advanced technology developed in the United States if possible. The dilemma in establishing deemed export policy, clearly identified in the report, is that any rules that are "too permissive may allow scientific and engineering knowledge possessed by the United States to be accessed by foreign nationals intent on harming the United States, whereas rules that are too restrictive may deny the United States ready access to the world's scientific and engineering community and the expanding base of knowledge it possesses." The report does concede that no matter how that balance is struck, there will always be inherent risks that some damage may occur to either our competitive or security interests.
They suggest that the "wall" built around U.S. scientific and technological communities via the current policy is too encompassing; essentially protecting not only highly sensitive information but other less sensitive information while also denying necessary access to vast talent and knowledge developed elsewhere. They argue convincingly that erecting these walls is not only impractical but counterproductive and, in many cases, irrelevant. Their recommendations for a new approach and requirements for implementation are spelled out in the report, but in general, the overarching theme is to build and maintain "high walls" around "small fields" of knowledge rather than "nominal walls" around "larger fields."
Among the findings were some interesting statistics highlighting, among other things, the level of (un)awareness among industry and academia on this issue. About 900 deemed export license requests are submitted in the United States each year, with less than 1 percent actually rejected (some are returned for other reasons). Fifty-four percent of recently processed applications were submitted by only three U.S. companies (giving the wrong impression that only three U.S. firms are conducting sensitive S&T work and employing foreign nationals). These findings are cited as further proof that an important component of any new policy needs to be enhanced efforts at educating those potentially affected by the policy.
This report is only one step in developing a new deemed export policy regime. The next step is for the Department of Commerce's Bureau of Industry and Statistics, which has jurisdiction over global dual-use policy, to review and act appropriately on the report's recommendations.
The final report, "Deemed Export Rule in an Era of Globalziation," can be found at http://tac.bis.doc.gov/2007/deacreport.pdf. Background information on the DEAC can be found at http://tac.bis.doc.gov/deacchart.htm.
Gary can be reached at gkjones@federallabs.org.
