The Deemed Export rule applies to U.S. companies and their employees that work on projects where the export, or sharing, of technology or source code is released to a foreign national within the U.S. The Bureau of Industry & Security (BIS) states that a deemed export is considered released when technology (software or source code) is verbally shared, is available for demonstrations or practice under the guidance of someone with knowledge of the technology, or made available to foreign nationals for visual inspection (such as reading technical specifications, plans, blueprints, etc.).
For many companies, this means that employees discussing the latest plans for manufacturing a commodity could be in violation of the Deemed Export rule. How? If just one of those employees is a citizen or legal permanent resident of a country which is flagged on the Commerce Control List (CCL) Country Chart, or the commodity falls under ITAR, then the company has just exported technology. If the company did not have a license for that export, it has just violated the Deemed Export rule.
It is important for companies dealing with commodities on the Commerce Control List (CCL) or United States Munitions List (USML) to check for this type of technology transfer, and to understand the types of export licensing that may be required. Most companies already have the information needed for compliance readily available; the problem is that the information is either housed in disparate systems in different departments or is not being checked because the process is so manual and time-consuming.
But by marrying the information currently housed within an organization's Human Resources department (such as validity dates and documentation of visa, passport and permanent residency), and the information used by the Trade Compliance department (such as ECCN, ITAR and export licensing requirements) through an automated, online tool, organizations can ensure compliance with the Deemed Export rule. Moreover, they will have all of the necessary information and documents in one central location where they can easily produce detailed reports as needed.
Deemed Exports are not always at the forefront of a company's compliance program. However, just like regular export screening, whether or not Deemed Exports are considered, companies can be assured that the U.S. Government is checking. With deemed export enforcement on the rise, it's not a matter of if violations are caught, but when the violations will be caught.
Using Integration Point® Deemed Export, companies eliminate the risk of being in violation, and thus facing civil and/or criminal penalties, denial of export privileges, and/or even imprisonment. |
