AAU Association of American Universities COGR Council on Governmental…

AAU Association of American Universities
COGR Council on Governmental Relations


  August 15, 2008

  U.S. Department of Commerce
  Bureau of Industry and Security, Regulatory Policy Division
  14th & Pennsylvania Avenue, NW, Room 2705
  Washington, DC 20230

  Via Fax: 202-482-3355

  RE: Comments on DEAC Report Recommendations (Docket No. 080512652-8653-01)

  On behalf of the Association of American Universities (AAU) and the Council on Governmental
  Relations (COGR), we are pleased to respond to the May 19, 2008 Federal Register Notice soliciting
  comments on two specific recommendations made by the Deemed Export Advisory Committee (DEAC)
  in its report, "The Deemed Export Rule in the Era of Globalization."

  AAU represents 60 leading U.S. public and private research universities and is devoted to maintaining a
  strong national system of academic research and education. COGR is an association of 178 research-
  intensive universities, affiliated hospitals, and research institutes that is specifically concerned with the
  impact of government regulations, policies, and practices on the performance of research conducted at its
  member institutions. COGR and AAU and our member universities participated in many of the DEAC's
  regional public meetings; we were pleased the DEAC chose to hold several of those meetings on
  university campuses. Our associations greatly appreciate the work of the DEAC and its members'
  thoughtful analysis of problems with the current deemed export control rules.

  The Commerce Department Bureau of Information and Security (BIS) has requested information from
  the affected communities on two specific issues examined by the DEAC. The first issue concerns
  narrowing the scope of technologies on the Commerce Control List (CCL) subject to deemed export
  licensing requirements and conducting an outside review of such technologies. The second issue
  concerns whether the various affiliations that a foreign national might have with countries other than
  those in which they enjoy citizenship should be factored into export license requirements and if so, what
  types of affiliations should be considered and by whom.

  Below are our joint comments concerning these two matters.

  1) Narrowing the Scope of Technologies on the Commerce Control List Subject to Deemed Export
     Licensing Requirements and Conducting an Outside Review of Technologies

  For the most part, the research conducted on university campuses is of a fundamental nature and specifically
  intended for broad-based dissemination for purposes of scientific advancement. It is therefore excluded from
  current deemed export control licensing requirements under parts 734.3 and 734.8 of the Export
  Administration Regulations (EAR).



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In those areas where our universities are under contractual agreement to control particular technologies, have
agreed not to publish or disseminate research findings, or have made specific agreements that require
confidentiality or involve non-disclosure agreements, clearly deemed export licensing may apply if the
technical information is, in fact, controlled. In such situations our universities must be vigilant in ensuring
that they have adequate export control compliance and control plans in place. In these areas, export controls
can have a significant impact on our ability to conduct university based research.

With this in mind, we offer the following comments on the DEAC's specific recommendation to narrow the
scope of technologies on the CCL subject to deemed export licensing requirements.

As we have expressed in previous comments to BIS, we fully concur with the DEAC's basic finding
that too many technologies are subject to deemed export control. We believe the list of covered
technologies should be drastically reduced. Particularly important is the DEAC report's recognition of
the increasingly global nature of the scientific and engineering enterprise and the critical need for the
U.S. scientific community to partner in that enterprise.

We also agree fully with the report's conclusion that erecting high walls around large segments of the
nation's scientific and engineering knowledge is not only increasingly impracticable, but also
counterproductive to our economic competitiveness and national security. Clearly, the current
Commerce Control List (CCL) is applied far too broadly for purposes of deemed exports and should be
greatly reduced.

We believe that deemed export requirements should be applied to only a very narrow subset of
technologies for two reasons. First, since other countries do not have regulations which are comparable
to our U.S. deemed export policies, experts in those countries are free to share the same information the
United States seeks to restrict. Hence the U.S.' deemed export rule is more likely to hurt U.S. industry
and our universities as well as U.S. economic competitiveness, instead of preventing the dissemination
of information.

Second, in many instances knowledge transferred to foreign nationals in the U.S. is transferred for
specific work or research that the foreign national is conducting in the U.S either at a particular
company, or at a U.S. university. We question the basis for a presumption that such knowledge will be
exported abroad. In fact, a vast majority of these foreign nationals have no intention of exporting that
information abroad. We, therefore, believe that clear intent to export information must be incorporated
by the Commerce Department as a consideration in determining if a deemed export license is required.

How then do we best limit access to technologies and for whom and when specifically should such
limitations apply? Clearly, careful consideration is needed as to which of these technologies warrant
such high fences. Such decisions must be based upon clear criteria as discussed below. In accordance
with the DEAC report, a zero-based review of CCL technologies currently controlled for deemed export
should be conducted. Moreover, the technologies on the list need to be reviewed annually and updated
by removing those that no longer warrant protection and adding as necessary new emerging technologies
of concern.

The zero-based assessment should be undertaken by the new BIS Emerging Technologies and
Research Advisory Committee (ETRAC). Recently, the university community enthusiastically
recommended a number of experts from our campuses for membership on the new Emerging
Technologies and Research Advisory Committee (ETRAC). This group would be in a position to help to




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assess which very short list of technologies can and should be protected for national security purposes
through the use of deemed export control licenses as opposed to classification.

To supplement and support the work of the ETRAC, BIS must be provided with the resources and
technical staff capabilities to support this review process on an annual basis. Obviously, a review of
this nature will be a daunting task with more than five hundred Export Control Classification Numbers
(ECCNs), which, in turn, have many different subcomponents that must be considered. Additional BIS
staff may be required to undertake the initial review and to update the CCL regularly. We call upon the
Department and the Congress to ensure that BIS has the appropriate personnel to carry out this review
process annually. We also encourage BIS to examine if there is a role for the National Academies in
making recommendations pertaining to the review.

We recommend that the ETRAC and BIS staff adopt the following principles in conducting their review:

    a) Only information about specific technologies that pose a clear threat to U.S. security interests
    and cannot be controlled more appropriately by classification should be controlled as deemed
    exports. An assessment of whether and how information about a particular technology, if exported
    from the U.S., could threaten U.S. national security interests must be conducted. Is the technology a
    unique emerging technology that poses a clear security threat? If no valid security threat from the
    transfer of specific knowledge about a particular technology from the United States exists, then it
    should be removed from the CCL for purposes of deemed exports.

    b) If information about a particular technology is reasonably available and can readily be
    gleaned from elsewhere in the world, deemed export controls should not be applied to it. The
    current state of international technological knowhow must be evaluated. There is no value in
    controlling technological information which is widely available outside of the United States. The
    technological information that most deserves protection is that which is exclusively confined to the
    United States and our allies.

    c) All "use" technology should be removed from regulation by deemed export controls except for
    specific instances where it is demonstrated that it meets the criteria set forth above. "Use"
    technology has value only to the extent that someone has the physical technology in hand and can
    thereby take advantage of that technology. Because the CCL provides rigorous controls on physical
    exports, additional constraints through the application of deemed export controls on use technology
    are redundant. Regulating the transfer of information about use technology serves only to
    overburden Commerce staff while serving no useful purpose in protecting our national security. If a
    technology should be controlled for deemed export under a) or b) above, controls will apply to the
    technical data, and the scope of control may be addressed in the listing. The focus of our deemed
    export regulations should rightfully be on "production" and "development" technology, as opposed
    to "use" technology.

    d) Dual-use items and information controlled for purposes of deemed export should be consistent
    with regulations issued by other federal agencies pertaining to the protection of national and
    homeland security. For example, the Department of Commerce should reconcile the Category I
    biological agents on the CCL (1C351-4, 1C360 and 1C35) with the agents regulated by the CDC,
    USDA and NIH from which the CCL is derived. To the extent that biologicals are listed on the CCL,
    the DOC should include all the exemptions that those agencies recognize. "Vesicular Stomatitis
    Virus" (ECCN 1C352) is a specific example, and there are others. While the USDA has identified
    "Vesicular Stomatitis Virus (exotic)" as a Select Agent, the CCL listing includes domestic and



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    attenuated strains that are not regulated by the USDA. It makes no sense to regulate for deemed
    export information about a biological agent that the CDC, USDA and NIH have determined to pose
    no security risk. This is an issue that applies equally to actual physical exports.

As the BIS moves to create the ETRAC and to assess current and future technologies that are controlled
for purposes of deemed export, we would strongly encourage BIS to adopt these principles.

2) Comprehensive Assessment of Foreign National Affiliation

The DEAC recommended a broad-based review of the background of foreign nationals and specifically
that an individual's personal loyalty to countries of concern should be assessed in determining if export
licenses are required. An earlier recommendation put forward by the Commerce Department's Inspector
General (IG) proposed that an individual's birthplace should be considered in determining if export
licenses were required.

AAU and COGR have expressed deep concern about both the IG's recommendation concerning country
of birth and the DEAC's recommendation suggesting that universities and industry assess individual
loyalties in their determination whether an export license application is required. However, universities
do not have the information, expertise or resources to adequately conduct such security, background or
loyalty checks on our foreign national students and employees. Once foreign nationals, especially
students, arrive at our campuses to conduct research, we are not in a position to further assess their
foreign loyalties or affiliations beyond citizenship. Expecting universities to do this, as opposed to the
government, is unreasonable and certainly will not be an effective means to ensure our national security.
We continue to maintain that the visa screening process provides our best defense against individuals
affiliated with nations, foreign entities, or terrorist groups that threaten our national and homeland
security or who have criminal intent and aim to do our country harm.

Moreover, we believe that such an expansion of export control requirements raises serious questions
about privacy and civil liberties that arise when the federal government makes distinctions based on
national origin or perceived foreign loyalties. While national security is certainly a compelling interest,
any blanket policy premised on the assumption that all individuals who hold affiliations with particular
foreign countries, but who are not citizens of those countries, still may hold some foreign allegiance is
overly broad.

As an alternative, we recommend that the Department of Commerce establish clear and reasonable
criteria for what justifies a determination that an individual could not be trusted with access to
technologies on the CCL. We believe the criteria should be consistent with the standards used in Visa
Mantis reviews. If a particular individual is deemed to pose a threat to the United States such that he or
she cannot be trusted with access to CCL technologies, that person should not be granted a visa to study
or work in such fields in the first place. Once an individual is admitted to the United States, knowledge
provided to them about specific export controlled technologies should only require an export license if a
university has actual knowledge that the individual being provided the information has the specific intent
of exporting it to a controlled country.

It is important that the criteria reflect the recognition that pervades the DEAC report--that international
scientific exchanges are in the United States' interests. We suggest that the basis of the new criteria
should be:




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   A foreign national from a country of concern for a particular technology should be excluded from
   access to that controlled technology only if the person transferring the technical information to a
   foreign national has specific and credible information that this individual will: a) export controlled
   technology abroad to a country for which the technology is controlled, or b) commit or support an
   attack on the United States with information they have obtained about a controlled technology.

The university community stands ready to work with the Department to develop such criteria and enact
more reasonable ways to facilitate security, such as the use of non-disclosure agreements or affidavits.

Conclusion

Current deemed export control policy has been damaging to U.S. industry, U.S. research and U.S.
competitiveness. We therefore commend the DEAC and the Department of Commerce for their work in
reviewing the current deemed export system. We agree fully with the DEAC's primary finding that
"...the existing Deemed Export Regulatory Regime no longer effectively serves its intended purpose and
should be replaced with an approach that better reflects the realities of today's national security needs
and global economy."

We believe that part this system is failing in part because the list of technologies for which we are trying
to regulate knowledge transfer abroad is far too expansive and based upon technological information for
which the U.S. no longer has a world leadership position. We look forward to the ETRAC review of the
current CCL to determine if there is an identifiable set of emerging technologies with substantial security
implications for which deemed export control rules do actually make sense as well as existing
technologies that should remain controlled based on revised, realistic criteria.

On behalf of the AAU and COGR, we greatly appreciate this opportunity to provide you with our views
and look forward to continuing to engage with you on this matter as the Commerce Department looks to
enact significant reforms to current deemed export control policies.

Sincerely,




Robert M. Berdahl                                         Anthony P. DeCrappeo
President                                                 President
Association of American Universities                      Council on Governmental Relations




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