Proposed Export Restrictions Alarm US Researchers

In March 2004, a report by the US Department of Commerce (DOC) office of the inspector general recommended changes to the department’s “deemed exports” policy, rules that are intended to keep researchers from restricted countries from taking knowledge about controlled technology from the US back to those countries. At first glance, the proposed changes seemed less than momentous.

One recommendation was to change an “and” to an “or” in a regulation governing the use of research equipment by foreign nationals. Another called for classifying foreign nationals based not on their current citizenship or permanent residence, but on their country of birth.

A year later, when DOC issued a request for comments on the inspector general’s recommendations, officials in scientific societies, academic organizations, industrial groups, and even some Department of Energy laboratories realized the implications would be anything but trivial. E-mails were sent, meetings were held, and within several weeks of posting the notice, DOC received more than 300 letters critical of the recommendations. When the official comment period closed in late June, the compilation of those comments was more than a thousand pages long.

What is at stake, according to many in the research community, is the ability of foreign researchers and students from countries such as China, Russia, Pakistan, and India to use equipment and software that are on federal lists of “controlled” technology. The regulations controlling the export of sensitive technology date back to the Reagan administration and are designed to prevent the transfer of technology that could help a nation on the restricted list develop its military.

The “deemed export” section of the rules, established in 1994, is intended to prevent a researcher from a restricted country from using controlled technology to learn how to re-create that technology in his or her home country. Foreign researchers and students who need to use such equipment are required to get a deemed export license. The regulations currently have an exemption for foreign researchers engaged in fundamental research, so the licensing provision hasn’t been a serious issue in the science community.

Redefining use

Another provision defining what constitutes “use” of restricted technology is written so that foreign researchers may operate most laboratory equipment without obtaining a license. But a proposed change in the rule would redefine “use” by changing the “and” to “or” in the current definition, which reads, “operation, installation, maintenance, repair, overhaul and refurbishing” of equipment. Universities currently view the “use” definition as meaning a foreign researcher would have to do all those things before a license is required, said Toby Smith, senior federal relations officer with the Association of American Universities.

But Smith said the new definition would make even basic operation of controlled lab equipment subject to deemed export licensing. Smith and others said that complying with the change would require hundreds of hours of staff time and cost millions of dollars. And the proposal to classify foreign researchers based on their country of birth would mean, for example, that a person born in China but who is a citizen of Canada would be subject to the regulations controlling exports to China.

According to officials from several universities who have sent comments to DOC, the change would mean all foreign researchers and students in the US would have to be reclassified based on their country of birth and then checked against the list of restricted countries. All the equipment used in research labs would have to be checked against federal restricted technology lists, and then the different lists would have to be cross-checked to see who needed a deemed export license.

“We believe that [the recommendations] would have a long-lasting negative impact on this nation’s scientific research enterprise,” wrote C. Peter Magrath, president of the National Association of State Universities and Land-Grant Colleges. Douglas Ray, chief research officer for Pacific Northwest National Laboratory in Richland, Washington, wrote that hundreds of foreign citizens use the facility each year as “part of PNNL’s mission … to provide state-of-the-art facilities for the international scientific community.” A tightening of the deemed export regulations, he wrote, “is extremely significant for our laboratory.”

And while officials from many universities were estimating that the bureaucratic cost of adhering to the proposed changes would be substantial, Don Deline, a government affairs official with Halliburton Corp, noted that even a “simple check” of the country of birth for each of its 50 000 foreign employees would cost Halliburton $30 million. He wondered how knowing an employee’s country of birth would improve US national security.

Easing concerns

At a May National Academy of Sciences meeting in Washington, DC, Peter Lichtenbaum, the DOC assistant secretary of commerce for export administration, tried to ease concerns about the recommendations by telling the gathering of university and private industry representatives that “We do not [and] have not endorsed the [inspector general’s] recommendations.” Lichtenbaum said he understood “the concern that the impact of compliance with deemed export controls will be devastating for the universities.” But, he added, if university officials look carefully at how the rules will work, “the impact on universities is much, much less in terms of licensing than universities fear.”

He also noted that in the last fiscal year only about 1% of about 1000 deemed export license applications were denied and that “most deemed export licenses are for Chinese nationals.” Several university officials, in comments to DOC and in meetings with Lichtenbaum, noted that even if very few licenses were denied, the bureaucratic work involved in complying with the changes would still be extensive and expensive.

Sam Armstrong, chair of the deemed exports working group for the National Academies government-university-industry research roundtable, said his group “has been in session for a year and we’re still confused on what the changes would mean, or may mean, or could mean.” In discussions with DOC officials about what research equipment would be covered under deemed exports, he said, “we’ve gotten one answer from one guy and another answer from another guy. There is a lot of confusion.”

Edward Rice, chairman of the Coalition for Employment Through Exports, a Washington-based industry association, said the push for the tightened deemed export regulations comes from a growing concern in the US intelligence community about China. And several academic and industrial officials involved in the deemed exports discussions said they’ve been told by DOC officials that China is specifically targeting American universities to steal technology.

Rice said the country-of-birth change was proposed because “there are 200 000 Chinese who have become Canadian citizens and many of them are scientists. Now they can come in [to the US] at will without a visa and be employed. If the rule is changed, they will be treated like Chinese.” While that is the behind-the-scenes context of the new rule making, he said, federal officials won’t make the case openly with university or industry representatives because of the delicate nature of US—China relations.

Discussions between DOC and several university and industry groups are continuing, but many involved in the negotiations fear that DOC could put some form of the restrictions forward within the next couple of months.