The scenario happens all the time:

Your engineering department has identified a need for more personnel who will work with export-controlled information. Management has approved the hiring, and your Human Resources manager has drafted the job posting.

What could go wrong? Export controls and anti-discrimination laws require employers to navigate an often-overlooked fine line when recruiting and hiring foreign nationals for positions involving export controlled information.


Continue Reading Refresher: How to Comply With U.S. Export Controls and Anti-Discrimination Laws When Recruiting and Hiring Foreign Nationals

Volume IX – Unclassified Contracts?  Foreign Buyers Still Make a Difference

Last month, we discussed the extent to which a foreign buyer can introduce an unacceptable level of foreign ownership, control, or influence (“FOCI”) that, absent mitigation, will render the target ineligible for the facility security clearances needed to perform classified work. This month, we look at foreign ownership through a broader lens.  Specifically, we consider how the United States regulates the proposed acquisition of a U.S. business by a foreign interest, irrespective of whether classified contracts and classified information may be involved in the planned transfer.


Continue Reading What You Need to Know About Mergers and Acquisitions Involving Government Contractors and Their Suppliers

By David Gallacher 

Earlier this month, we wrote about a new proposed rule from the Department of Energy imposing new and onerous requirements relating to compliance with the U.S. export control laws. DOE claimed that this proposed rule was modeled on a prior rule included in the Department of Defense Federal Acquisition Regulation Supplement (DFARS) at DFARS Subpart 204.73 and DFARS 252.204-7008, promulgated originally in 2008 (and discussed here). But be aware that those DFARS rules were recently removed. Kind of. In case you were not paying attention, the DFARS export restrictions were recently moved to DFARS Subpart 225.79 and DFARS 252.225-7048. See 78 Fed. Reg. 36108. So, even though the citations may have changed, the song remains the same.


Continue Reading “The Song Remains the Same” – DFARS Removes and Replaces Restrictions on Export Controls

By Mark Jensen

Each month, we try to review the Federal Register and post an update summarizing some of the more interesting developments. This month, two of the topics – a proposed rule from the Department of Energy relating to onerous export requirements, and a final rule from the Small Business Administration relating to increased risks for contractors – are reported separately. But beyond these updates, there were several other interesting developments published in the Federal Register this month, showing hopeful signs of simplified and improved governance. And we all like improvements.


Continue Reading What’s New Out There? A Regulatory Update (“Promising Improvements” Edition)

By: David S. Gallacher

2011 was a banner year for U.S. export control laws. The Obama administration has vowed to streamline and reform the bloated U.S. export control system – promising to build "higher walls" around a narrower universe of goods and technologies requiring export licenses. Following is a summary of ten of the key reforms to U.S. export laws that took place (or were proposed) in 2011. 
 


Continue Reading 2011 Year In Review: Export Controls and Promised Reforms

By: Curt Dombek & Reid Whitten

On November 7, 2011, the U.S. State Department published a proposed rule amending the International Traffic in Arms Regulations (“ITAR”) by narrowing the categories of aircraft and related equipment controlled on the United States Munitions List (“USML”). Concurrently, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published a proposed rule adding five new Export Control Classification Numbers (“ECCNs”) to the Commerce Control List, which lists items controlled under the Export Administration Regulations (“EAR”). The two rules are linked, as the new ECCNs in BIS’s proposed rule will cover those items carved out of the ambit of ITAR controls by the State Department’s proposed rule.   


Continue Reading Early Steps Toward a Streamlined Export Control System: Proposed Changes to the ITAR and EAR

By Thaddeus McBride & Reid Whitten

On Monday, October 3, the U.S. Supreme Court declined to hear the appeal of retired University of Tennessee professor John Reece Roth. In July 2009, Roth received a four year prison sentence for illegally exporting military technology, in large part due to his work with graduate students from Iran and China. Professor Roth’s conviction and prison sentence forcefully remind the research community, commercial as well as academic, of the potentially severe consequences that may arise from ignoring technology export controls.
 


Continue Reading Prison Time and Export Controls: University Professor’s Case Illustrates Dangers of Ignoring Export Compliance

By Curt Dombek, Thad McBride and Mark Jensen

In a significant step in the reform of U.S. export controls, the Department of Commerce issued a proposed rule on Friday, July 15, 2011, that would fundamentally affect the overlap between, and operation of, the International Traffic in Arms Regulations (“ITAR”) administered by the U.S. Department of State, Directorate of Defense Trade Controls, and the Export Administration Regulations (“EAR”) administered by the Department of Commerce, Bureau of Industry and Security. See Proposed Revisions to the Export Administration Regulations (EAR): Control of Items the President Determines No Longer Warrant Control Under the United States Munitions List, 76 Fed. Reg. 41,958 (July 15, 2011) (amending 15 C.F.R. Pts. 730, 732, 734, 738, 740, 742, 743, 744, 746, 748, 756, 762 ,770, 772 and 774). The changes, which are based on the interagency review of the U.S. export control system that was initiated by President Obama in August 2009, would create a regulatory construct for harmonizing the United States Munitions List (“USML”) of the ITAR and the Commerce Control List (“CCL”) of the EAR, as well as standardizing certain key definitions between the two regulatory systems.
 


Continue Reading Proposed Rule Details Major Changes to U.S. Export Controls

By Thaddeus McBride, Mark L. Jensen and Corey Phelps

Beginning on February 20, 2011, the U.S. Bureau of Citizenship and Immigration Services (“CIS”) assumed a role in the U.S. Government’s increasing regulation of technology exports. The new role for CIS relates to the transfer of controlled technology or source code, sometimes referred to as “deemed exports," to non-U.S. nationals.
 


Continue Reading Technology Exports: Uncertainty Around Form I-129 Persists

By John M. Hynes

On May 16, 2011, the Department of State (“Department”) published its final rule in the Federal Register amending provisions of the International Traffic in Arms Regulations (“ITAR”) regarding the transfer of ITAR controlled defense articles (including technical data) to dual and third-country nationals employed by approved foreign end-users.  See 76 Fed. Reg. 28174-78 (amending 22 C.F.R. pts. 120, 124 and 126).
 


Continue Reading New ITAR Rule on Transfer of Defense Articles to Dual and Third-Country Nationals Creates Substantial New Compliance Obligations

By John M. Hynes

On April 13, 2011, the Department of State (the “Department”) issued proposed amendments to various sections of the International Traffic in Arms Regulations (“ITAR”) regarding the definition of “defense service.” See International Traffic in Arms Regulations: Defense Services, 76 Fed. Reg. 20590-93 (amending 22 C.F.R. Parts 120 and 124).
 


Continue Reading The Department Of State Seeks To Narrow The ITAR Definition Of “Defense Service”