22 May 2006

[Federal Register: May 22, 2006 (Volume 71, Number 98)]
[Page 29301-29303]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



Bureau of Industry and Security

[Docket No. 060505121-6121-01]

Establishment of Advisory Committee and Clarification of Deemed 
Export-Related Regulatory Requirements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice.


SUMMARY: The Bureau of Industry and Security (BIS) is announcing the 
creation of a Federal Advisory Committee that will review and provide 
recommendations to the Department of Commerce on deemed export policy. 
The Deemed Export Advisory Committee (DEAC) will help ensure that the 
deemed export licensing policy most effectively protects national 
security while ensuring the U.S. continues to be at the leading edge of 
technological innovation. This notice also provides an overview of 
steps that BIS has taken to improve understanding of deemed export 
policy within academia and industry, including outreach activities 
conducted by BIS.

ADDRESSES: Although there is no official comment period for this 
notice, you may submit comments, identified by Docket No. 060505121-
6121-01, by any of the following methods:
    E-mail: publiccomments@bis.doc.gov. Include ``060505121-6121-01'' 
in the subject line of the message.
    Fax: (202) 482-3355.
    Mail or Hand Delivery/Courier: U.S. Department of Commerce, Bureau 
of Industry and Security, Regulatory Policy Division, 14th & 
Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, ATTN: Docket 
No. 060505121-6121-01.

FOR FURTHER INFORMATION CONTACT: Marcus Cohen, Regulatory Policy 
Division, Office of Exporter Services, Bureau of Industry and Security, 
telephone: (202) 482-2440 or e-mail: mcohen@bis.doc.gov. Copies of the 
referenced Department of Commerce Office of Inspector General (OIG) 
Report are available at: http://www.oig.doc.gov/oig/reports/2004/BIS-IPE-1676-03-2004.pdf

[[Page 29302]]

    Public comments received by BIS in response to the ANPR are 
available at: http://efoia.bis.doc.gov/.


    BIS is proposing the establishment of a ``Deemed Export Advisory 
Committee'' (DEAC) under the terms of the Federal Advisory Committee 
Act (FACA) (Pub. L. 92-463, 5 U.S.C., App. 2). The DEAC will serve as 
forum to address complex questions related to an evolving deemed export 
control policy. Specifically, the DEAC will be charged with reviewing 
the current deemed export policy and determining whether to recommend 
any changes to that policy. A separate notice will specifically address 
the comments received in response to the ``Advance Notice of Proposed 
Rulemaking: Revision and Clarification of Deemed Export Related 
Regulatory Requirements'' (ANPR) published in the Federal Register on 
March 28, 2005.

A. Deemed Export Advisory Committee (DEAC); Notice of Recruitment of 
Private-Sector Members

    The nature of research and technological development is constantly 
changing and there is evidence of growing participation of foreign 
nationals in U.S.-based research as well as their employment in U.S.-
based high-technology industries. There is also an increasing 
interdependence between commercial and academic research. Over the 
course of the past decade, these changes have inevitably led to the 
increased transfer of controlled information to foreign nationals in 
the course of research and commercial technology development.
    To ensure that the deemed export policy best protects U.S. national 
security, while striving not to impede the ability of U.S. industry and 
academic research to continue at the leading edge of technological 
innovation, BIS is establishing a ``Deemed Export Advisory Committee'' 
(DEAC) under the terms of the Federal Advisory Committee Act (FACA) 
(Pub. L. 92-463, 5 U.S.C., App. 2). The DEAC will undertake a 
comprehensive review of the national security, technology, and 
competitiveness dimensions of the deemed export issue and provide 
recommendations for potential changes to the current deemed export 
policy. The DEAC's review will include, but not be limited to, the 
recommendations made in the Department of Commerce Office of Inspector 
General (OIG) Report entitled ``Deemed Export Controls May Not Stop the 
Transfer of Sensitive Technology to Foreign Nationals in the U.S.'' 
(Final Inspection Report No. IPE-16176-March 2004).
    The DEAC, which will not exceed 12 members, will be structured to 
ensure a balanced membership that will offer a comprehensive point of 
view on the complex technical and policy questions at issue. The 
advisory committee will consist of representatives from industry, 
academia, and other experts in the field to ensure a full discussion of 
all aspects of deemed exports and knowledge transfer from the 
corporate, academic, and national security perspectives. Members will 
be called upon to advise BIS on highly technical issues surrounding 
technology transfer and to help ensure that BIS effectively carries out 
its critical national security function. To that end, the DEAC shall 
have a diverse membership with expertise in national security affairs, 
scientific research and development (R&D) policy, and the various forms 
of technology subject to the EAR, such as nuclear, chemical, missile, 
electronics, computer, telecommunications, and avionic technology. For 
a full list of technology and software subject to the EAR, see 15 CFR 
part 774, Supp. 1.
    DEAC members will be appointed by the Secretary of Commerce and 
serve a term of not more than one year. DEAC members must obtain a 
secret security clearance prior to appointment. These clearances are 
necessary so that members may be permitted access to the classified 
information needed to formulate recommendations to the Department of 
Commerce. The DEAC will convene as appropriate, but in no case less 
than quarterly. To respond to this recruitment notice, please send a 
copy of your resume to Ms. Yvette Springer at Yspringer@bis.doc.gov. 
This Notice of Recruitment will be open until July 21, 2006.

B. Current Deemed Export Policy

    Given the extended public discussion of the OIG recommendations and 
the coming review of the deemed export policy by the DEAC, a 
reiteration of the current BIS deemed export policy regarding country 
of birth, the existing definition of ``use'' in the Export 
Administration Regulations (EAR), and the relationship of fundamental 
research to deemed exports is warranted. BIS has decided not to make 
any changes at this time to current regulations and policy on these 
three issues.

C. BIS Activities Related to Deemed Exports

    In the past year, BIS has undertaken an enhanced and targeted 
deemed export outreach program. Since the issuance of the report by the 
OIG, BIS has significantly increased its outreach to the academic and 
research communities. This outreach has focused on the concerns 
identified by the OIG report to raise the level of awareness and to 
improve the understanding of the deemed exports regulatory 
requirements. In fiscal year 2004 and fiscal year 2005, over 120 
outreach events were conducted annually, almost tripling that conducted 
in previous years. A third of these events--which range in content from 
presentations to large audiences, seminars, one-on-one consultations, 
and site visits--have been with the university and government research 
organizations and laboratories. These organizations were identified by 
the OIG report as needing additional knowledge of the EAR's deemed 
export requirements. BIS is on track to conduct over 100 deemed export 
outreach events in the current fiscal year. BIS has already seen the 
benefit of increased outreach to, and communication with, the regulated 
community and believes that the DEAC will provide a particularly 
advantageous forum for further in-depth technical information exchange 
between and among BIS and the academic, corporate, and other interested 
    In addition to onsite visits, seminars, and the information 
provided in Supplement No.1 to Part 734 of the EAR, BIS has also 
provided deemed export related guidance on its Web site. (See Deemed 
Export FAQ's at http://www.bis.doc.gov/policiesandregulations/index.htm
) In particular, this guidance has addressed issues related to 

a foreign national's country of origin--an issue highlighted by the OIG 
report. This particular guidance explains that if the status of a 
foreign national is uncertain, it is important to consult with BIS to 
determine where the stronger ties lie, based on the facts of the 
specific case. BIS is committed to providing continued deemed export 
guidance and assistance to the regulated community on this important 
    BIS has also participated in several Task Forces to address the 
deemed export issue, including an American Association of Universities/
Council on Government Relations Task Force, the National Academies' 
Government-University-Industry-Research Roundtable, the Federal Bureau 
of Investigation's National Security Higher Education Advisory Board, 
and a White House, Office of Science and Technology Policy Interagency 
Working Group comprised of agency representatives with research 
laboratories (e.g., Department of Energy, Department of Defense, 
Department of

[[Page 29303]]

Health and Human Services, Department of Agriculture, National 
Institutes of Health, Food and Drug Administration, National Institute 
of Standards and Technology, etc.). The goal of each of these groups is 
to assess the impact of the OIG's recommendations and to address 
concerns raised by the regulated communities.
    BIS has also increased its enforcement focus on deemed exports. A 
number of cases involving violations of deemed export requirements have 
been concluded with criminal and civil penalties and BIS will continue 
to pursue violations of the EAR's deemed export requirements to ensure 
U.S. national security is not compromised by unauthorized technology 
transfers to foreign nationals. In addition, BIS is collaborating with 
the Federal Bureau of Investigation on related enforcement issues 
through the National Security Higher Education Advisory Board.
    Finally, BIS received funding in the FY2006 budget to implement an 
Enhanced Deemed Export Control Initiative. This initiative has two 
components--licensing and enforcement. The initiative will enable BIS 
to: (1) Process an increased volume of license applications in a timely 
manner, in order to ensure that U.S. entities are able to gain access 
to the expertise of foreign nationals who do not pose security 
concerns; and (2) ensure that U.S. entities are aware of and comply 
with U.S. deemed export license requirements through expanded outreach 
and enforcement activities. Both aspects are necessary to enhance U.S. 
national and economic security.

    Dated: May 17, 2006.
Matthew Borman,
Deputy Assistant Secretary of Commerce for Export Administration.
 [FR Doc. E6-7778 Filed 5-19-06; 8:45 am]