Most people (but hopefully not experienced export compliance professionals!) think of exports only as the shipment of tangible items across borders. However, exports may also include the transfer of technology via emails, phone calls, faxes (are people still faxing?), in-person meetings and almost any other channel of communication. The release of U.S.-controlled technology to a foreign national is deemed by the U.S. government to be an export of technology.
Deemed exports make the partnership between export compliance and HR important. Everything discussed below relates to the deemed export challenge: ensuring companies with controlled technology are aware of who has access to its technology and appropriately safeguard against unauthorized access. While the concept of a deemed export is unique to the U.S., the extraterritorial scope of U.S. export regulations means deemed export rules apply broadly—potentially to any company that exports from the U.S., has U.S.-origin products and/or incorporates U.S.-origin technology in its products.
Once you understand deemed export rules and how they may apply to controlled technologies at your company, it’s necessary to account for the nationality and/or residency status of employees, contractors, interns and others within your company who need access to such technologies. Remember, U.S. permanent residents are treated the same as U.S. citizens for purposes of export compliance.
It should be HR’s responsibility to collect and retain information on employees’ nationality, residency and location and track and update this information. For example, did an employee’s green card expire? Did a Chinese national employee recently become a U.S. citizen? Did an employee living in the U.S. recently move to Iran? HR needs to keep export compliance aware of changes that may impact an employee’s access to controlled technology. In turn, it should be the responsibility of export compliance to train HR on the rules and regulations.
HR needs to understand the rules and regulations that affect hiring decisions and the internal mobility of employees. U.S. export regulations can be complicated in this regard, so HR should be trained by export compliance on some of the more nuanced concepts. As an example: under Export Administration Regulation (EAR), a non-U.S. person’s most recent citizenship status is determinative, whereas the International Traffic in Arms Regulations (ITAR) considers all citizenships of a non-U.S. person.
These are a few areas of confusion that I have seen pop up many times for HR professionals who haven’t been adequately trained on export compliance:
Providing adequate training to HR professionals serves two functions:
In general, U.S. export regulations (EAR, ITAR) and U.S. anti-discrimination laws (Title VII of the Civil Rights Act of 1964, The Immigration and Nationality Act) have been able to co-exist, even though the latter specifically prohibits employers from discriminating based on criteria such as national origin and citizenship. But HR should be aware of the limited circumstances in which export-compliance related recruitment or hiring policies/decisions could present discrimination concerns.
It’s important for HR to work with export compliance and legal teams to ensure job postings, recruiting processes and employee screening procedures take into account federal anti-discrimination regulations as well as guidance from the DOJ on the subject. The following best-practices for HR may help mitigate violations:
People move, their jobs change and sometimes their citizenship/residency statuses change. HR should be prepared to conduct assessments/audits to evaluate and update such changes, as they could have an impact on export compliance and employees’ continued ability to access controlled products, information and technology. Periodic assessments should be conducted by HR to evaluate:
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