By Stewart Baker (sbaker@steptoe.com) & Ed Krauland (ekrauland@steptoe.com)
Several clients recently have received informal visits from two-person teams from the U.S. Commerce Department's Bureau of Export Administration ("BXA"), Office of Export Enforcement. These visits apparently have been following up on applications from nationals of certain disfavored countries, such as China and Iran, for visas that would allow them to work for major U.S. exporting companies on a temporary basis. The discussions with the BXA enforcement personnel generally have focused on the kinds of technology that would be disclosed to the foreign nationals during their visits to our clients' premises, to ensure that the companies are aware of U.S. export control restrictions and have the necessary export licenses in place for foreign national visits or employment.
These BXA visits are likely to increase and become routine compliance exercises for major U.S. exporting companies (who increasingly are working with foreign nationals). Given the possible consequences of a regulatory infraction, we suggest the following:
1. Review current internal practices to be certain that appropriate standard operating procedures are in place to avoid inadvertent violations.
2. In particular, review the requirements of the "deemed export" rule to make sure foreign nationals are the subjects of export licenses when necessary (remember as well that the "deemed export" rule may not apply to encryption source code and object code).
3. Finally, ensure that company personnel who may be contacted by BXA are familiar with the nature of the government inquiry and are able to refer the BXA personnel to the appropriate export control personnel within the company.
Please let one of us know if you would like to discuss this issue or would like any assistance in establishing appropriate procedures.
For further information please contact L. Benjamin Ederington on Tel: +202-429-6411, fax: 202-429-3902 or E-mail: bedering@steptoe.com.
Commerce Department Export Enforcement
Steptoe LLP
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