The U.S. Citizenship and Immigration Services recently modified some of the forms used by employers to petition for employment authorization on behalf of foreign nationals. One modification is the addition of a certification requirement to Form I-129. Since this requirement became effective a couple of months ago, employers seeking to employ foreign nationals in the H-1B, L-1 or O-1A categories have had to contend with complex clearance procedures under the Export Administration Regulations ("EAR") and the International Traffic in Arms Regulations ("ITAR"). The purpose of the certification requirement is to prevent the unauthorized release to foreign nationals of sensitive technology, technical data and software that could have national security and foreign policy implications.
Under the EAR, providing foreign nationals with access to sensitive technology or technical data in the United States is "deemed" to be an export of such goods to the person's country of nationality, which may require a license before release. Similarly, ITAR imposes a licensing requirement on the release of controlled defense articles or technical data included on its munitions list.
The new certification requires a company to attest that it has reviewed the EAR and ITAR and determined that either (i) a license is not required to release technology or technical data, or (ii) a license is required for such release but the company will prevent access by a foreign national to such information until a license is secured. The consequences of not complying with export laws can be severe, including civil fines of up to $500,000 per violation, criminal penalties of up to $1 million per violation and up to 10 years in prison, denial of export privileges, and debarment from U.S. government contracts.
The analysis required to execute an informed certification can be complicated and burdensome. It begins with a determination of the type of technology or technical data to which the foreign national will likely be given access. This determination requires consultation with company officials who understand product design and uses and with information technology personnel who are familiar with software applications.
Next, the company must determine how that technology or technical data will be classified for export purposes. The first consideration is whether the product is on the Commerce Control List ("CCL") administered by the U.S. Department of Commerce's Bureau of Industry and Security. The technical characteristics and functions of the product determine whether it falls within one of the 10 categories of controlled items listed on the CCL (e.g., Information Security is one of the categories) and whether the product has an Export Control Classification Number, which describes the technical characteristics of controlled products and any related export restrictions. If a product is on the CCL, then the company must consider the nationality of the foreign worker. This information is necessary to access the Commerce Country Chart to determine whether a license is required to export the item.
The U.S. Department of State's Directorate of Defense Trade Controls administers the ITAR U.S. Munitions List of technologies designated as controlled defense articles.
Although most technology is not controlled for export, the company should nevertheless conduct an analysis to be sure an export license is not required to release certain information to foreign nationals. Situations that should be closely examined include the release of technology, technical data or software to foreign workers involved in research and development, and foreign students and scholars involved in research. Technologies that require licensing for transfer to foreign nationals are often "dual-use" (i.e., have both civil and military applications) and relate to critical control areas, such as national security, nuclear proliferation, missile technology, or chemical and biological warfare.
Finally, technologies that are "publicly available" are not subject to EAR and ITAR licensing controls. These include publicly available technology and software (other than software and technology controlled as encryption items) that are already published or will be published.
For more information about the new Form I-129 certification requirement and how to manage compliance with the requirement, please contact our director, Compliance Risk Services, Jim Bowers at (860) 275 0339 or firstname.lastname@example.org.
On January 17, John DeSimone and Heather Weine Brochin presented a discussion about employment agreements and negotiation strategies at the NYU School of Medicine.
On October 10, James Bowers will share his personal perspectives on the History of Slavery and Race in South Carolina at UConn School of Law.
Day Pitney Alert
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Hartford, Conn., May 26, 2016 - Day Pitney LLP is pleased to announce that Employment and Labor attorney Albert Zakarian has been chosen as a Lifetime Achievement winner of The Connecticut Law Tribune’s second annual Professional Excellence Awards 2016. The Professional Excellence Awards 2016 recognize 28 lawyers, who were chosen from over 60 nominees, as either Lawyer of the Year or Lifetime Achievement recipients, according to The Connecticut Law Tribune. The Lifetime Achievement Awards honor "attorneys who have excelled over a career."
John McLafferty was quoted in an article, "Final overtime regulations less drastic than feared," in Massachusetts Lawyers Weekly. In the article, McLafferty discusses how the Department of Labor’s final revised federal overtime regulation will impact businesses. "The reality is that the rule made more people eligible for overtime; it didn’t create any obligation for employers to pay more overtime," he said. McLafferty added that the regulation’s impact on employees could have a wider effect on office culture and policies, which may affect a company’s ability to attract and retain workers. In addition, he noted that employers should take this opportunity to ensure that all of their employees are properly classified for overtime purposes.
Albert Zakarian has been chosen as a winner of The Connecticut Law Tribune's second annual Professional Excellence Awards. The awards recognize two dozen lawyers for outstanding service to the profession during their long careers. The publication received more than 70 nominations. Profiles of awardees will appear in the Law Tribune in May. An event will also be held in May to recognize the winners. More about the awards can be found here.