Commerce Dept. drops bid to place severe restrictions on foreign researchers in U.S

Manufacturing & Technology News, June 7, 2006 by Ken Jacobson

The Commerce Department's Bureau of Industry and Security (BIS) last week said it was withdrawing a pair of proposed measures that could have strengthened the barriers against access to sensitive technology faced by foreign nationals who perform scientific research in the U.S.

The bureau's May 31 announcement came just more than a week after another notice, which BIS had likewise placed in the Federal Register, that it would create a federal advisory committee to review and provide recommendations on deemed-export licensing policy, which the now-shelved proposals would have modified.

The term "deemed export" refers to the release to a foreign national within the United States of a technology that is controlled under the U.S. Export Administration Regulations (EAR), which BIS administers.

According to the EAR, "such release is deemed to be an export to the home country or countries of the foreign national"; as such, it could require a license just as if it had been physically shipped abroad. Commerce Department figures show that 995 of the 15,534 export-license applications processed by BIS in fiscal-year 2004 were for deemed exports; of those 995, only 1 percent were denied.

The proposed policy revisions would have affected "foreign visitors or workers at U.S. private, public or government research laboratories and private companies," in the words of the Commerce Department's Office of Inspector General (OIG), the recommendations of whose March 2004 report prompted BIS to float the changes in May 2005.

By BIS's account, the ensuing comment period brought 311 reactions: 88 from academic institutions, 25 from trade associations, 22 from companies, 20 from academic associations and four from U.S. national laboratories.

The bureau's May 31 notice made clear that the comments overwhelmingly opposed the two proposed changes and played a major role in its decision to drop them. It also said its decision to establish the advisory committee was "a result of the extensive nature of the public comments."

BIS was described as "responsive" and its notices as evidence that BIS "heard our concerns, read our comment letters, and took what we said seriously" by Amy Scott, the senior federal relations officer at the Association of American Universities (AAU), which groups 62 research universities in the U.S. and Canada.

How great a stake academic institutions had in heading off the proposed revisions is indicated by a comment that AAU's interim president, John Vaughn, made on the announcement that the advisory committee would be formed: "The original [OIG] recommendations would not only have disrupted research but would have been tantamount to hanging a sign on our university laboratories saying 'Top International Talent Not Welcome.' "

In withdrawing the first of the two proposed changes, to base deemed-export licenses on a foreign national's country of birth, BIS said it had "determined that the current licensing requirement based upon a foreign national's country of citizenship or permanent residency is appropriate."

The reasoning behind this decision, as set forth by the bureau in the Federal Register, mirrored "many comments" it had received arguing that "obtaining citizenship demonstrates an affirmative declaration of affiliation or loyalty toward a particular sovereign entity in ways that the circumstances of a person's birth does not."

The second revision would have broadened the definition of "use" that applies to controlled technologies and thereby significantly increased the likelihood that participation in research by a foreign national would require a deemed-export license. BIS noted that it had received numerous comments contending that the change "would capture too many routine operations carried out by students/employees," something that would "constitute a large (and generally unnecessary) compliance burden" and "have a chilling effect on U.S. research efforts conducted by industry and universities alike."

The comments further argued, according to BIS, that the OIG's report had "failed to proffer any evidence" that revising the definition would yield the "improvements to national security" it envisioned. The current definition of "use," the bureau concluded, "adequately reflects the underlying export-controls policy rationale" under the EAR.

On a third point, at the heart of which is the question of whether fundamental research is subject to regulation under export controls at all--and on which BIS and the academic community do not see eye to eye--BIS's May 31 notice declares that "expanded outreach is required." According to that notice, "if the intent is to make the information resulting from the fundamental research publicly available," it is "usually not subject to the EAR." In this, fundamental research stands in contrast to "research related to industrial development, design, and production, the results of which ordinarily are restricted for proprietary reasons or specific national-security reasons."

BIS adds, however, that even if the "product" of fundamental research falls outside the scope of export regulation, sponsoring institutions may still need to seek licenses under deemed-export requirements "if during the conduct of the research controlled technology is released to a foreign national."