Deciphering Deemed Exports

It’s a routine event — one which happens thousands of times a day across the United States. Someone begins work in the US as an engineer, researcher or academic. The location could be a tech company in Santa Clara, a defense contractor in St. Louis or a university in New England, but the question is the same — is an export control violation imminent? And let’s not limit ourselves to employees. The same question could be asked when considering foreign customers, contractors, suppliers and visitors.

The deemed export rule is one of the least intuitive aspects of the US export control system. Most people understand that sending something out of the US constitutes an export. Taking the concept a step further, it is not a huge leap to explain that the “something” being exported is defined to include technology subject to either the Export Administration Regulations (EAR) or International Traffic in Arms Regulations (ITAR). What is not obvious to most businesses is that a release of technology to a foreign person inside the US is an export. This is the crux of the deemed export rule.