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Export Compliance - Is YOUR Company Ready?

February 21, 2011

U.S. export control laws protect the national security of the United States by, among other things, requiring U.S. persons to obtain approval prior to export or release of certain U.S. origin technology to foreign nationals. In this regard, new export control regulations have recently been enacted that place additional burdens on employers who sponsor foreign workers, and due diligence is needed to ensure compliance with the new rules.

Beginning February 20, 2011, U.S. Citizenship and Immigration Services requires employers filing Form I-129 for H, L, and O visa status on behalf of foreign nationals to certify that they have (1) reviewed the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), and (2) have made a determination as to whether or not an export control license is required to release any controlled technology or technical data to the foreign national. If an export license is required before such release, the employer must attest that the worker will not be exposed to covered technologies without first obtaining an export license covering the foreign worker. A misrepresentation on Form I-129 in this regard is a violation of federal law.

What Is "Controlled Technology" and "Technical Data"?

"Technology" and "technical data" that are controlled for release to non-United States persons are identified on the Export Administration Regulations (EAR) Commerce Control List (CCL) and the International Traffic in Arms Regulations (ITAR) U.S. Munitions List (USML).

The EAR uses the term "technology" to refer to information for the development, production or use of “dual-use” products or software. "Technology" that is required for the development, production or use of items on the EAR’s CCL may be subject to export licensing and other restrictions, depending on the nature of the technology, the destination, the end-user and end-use. 

The ITAR uses the term "technical data" to describe the information required to manufacture, use or train persons on the use or production of the articles included on the USML. With limited exception, technical data cannot be exported to a non-United States person without first obtaining an export license. Determinations of whether technology or technical data is controlled resides with the Bureau of Industry and Security (BIS), with respect to articles listed on the CCL, and with the Directorate of Defense Trade Controls, United Stated Department of State (DDTC), with respect to articles listed on the USML.  

An export of controlled technology or technical data can occur when it is disclosed to or
transferred to a non-United States person or entity, whether in the United States or abroad. This means an employer who implicitly or explicitly provides its foreign national employee access to controlled technology or technical data would be deemed to have exported that technology or technical data, and such deemed export could be subject to a licensing requirement under either the ITAR or EAR. 

When Is an Export License Required?

The EAR governs the export of articles and technology that could have both military and commercial purposes. Under the EAR, controlled technology is considered "released" for export when it is made available to foreign nationals for visual inspection (such as reading technical specifications, plans, blueprints, etc.), when technology is exchanged orally, or when technology is made available by practice or application under the guidance of persons with knowledge of the technology. Depending upon a variety of factors, including the article or technology to be exported, the destination of such article or technology and the ultimate end-user, a license may or may not be required.  

The ITAR governs the export of USML defense-related articles and technology that were created, modified or improved for a specific military purpose. An employer will be required to obtain a license (or rely upon a license exemption) from the DDTC prior to permitting a foreign national employee to access the article or technology listed on the USML. 

What Employers Must Know

Some employment based non-immigrant visa petitions will require employers to certify compliance with export license requirements. Prior to filing an H,L or O visa petition, employers must carefully review whether the potential foreign worker will have access to controlled technology, and if so, whether an export control license will be required. 

What Employers Must Do

Completion of the new I-129 form requires that a petitioning employer must first determine if the technology or technical data that will be released to, or otherwise will be accessible by, a prospective foreign national employee is controlled, and if so, under what licensing regime (BIS or DDTC). An employer must then determine if release of the controlled technology to the potential foreign worker will require the employer to obtain an export license, or rely upon a license exception from, BIS or DDTC. Export classifications and licensing determinations can be complex. Bracewell & Giuliani attorneys have solid expertise in export control law to help make the determination as to which box to check on the I-129 petition.

Filing Fees: The USCIS Has Increased Filing Fees for Most Visa Petitions

Effective November 23, 2010, the USCIS increased immigration fees by approximately 10 percent in order to close a projected $200-million deficit for 2010-11.

There are three new filing fees for:

  • Regional center designation under the Immigrant Investor Pilot Program (EB-5);
  • Individuals seeking civil surgeon designation; and
  • Recovery of the cost of processing immigrant visas granted by the Department of State.

The rule also adjusted fees for the premium processing service to $1,225.

The new fee structure also reduces fees for five individual applications and petitions as a result of lower processing costs:

  • Petition for Alien Fiancé (Form I-129F);
  • Application to Extend/Change Nonimmigrant Status (Form I-539);
  • Application to Adjust Status From Temporary To Permanent Resident (Form I-698);
  • Application for Family Unity Benefits (Form I-817); and
  • Application for Replacement Naturalization/Citizenship Document (Form N-565).

The fees for naturalization applications remain unchanged. Those fees were hiked by 70% to $675 in 2007, an increase that immigrant-rights groups blamed for putting citizenship out of reach for many lower-wage immigrants.

View the new schedule of fees at www.uscis.gov; and the new schedule for consular services at www.travel.state.gov.

Additional Filing Fees of $2,000 for Certain H-1B Petitions and $2,250 for Certain L-1A and L-1B Petitions

Public Law 111-230 requires the submission of an additional fee of $2,000 for certain H-1B petitions and $2,250 for certain L-1A and L-1B petitions. The additional fee applies to H-1B or L-1 petitioners that employ 50 or more employees in the United States with more than 50 percent of their employees in the United States in H-1B, L-1A or L-1B. All employees, whether full-time or part-time, will count towards the calculation of whether an employer is subject to the new fee.  USCIS  calculates the percentage based on the number of employees in the United States. All employees in the United States, regardless of whether they are paid through a U.S. or foreign payroll, count toward the calculation. The new fee does not apply to extension requests filed by the same petitioner for the same employee. The petitioner employer, not the beneficiary, should pay the additional fee, where it applies.