EAR Deemed Export Intevac, Inc. settled with the US Department of Commerce Bureau of Industry Security (BIS) for five violations of the Export Administration Regulations (EAR).
The Regulations that Intervac violated are currently codified in the Code of Federal Regulations at 15 C.F.R. Parts 730-774 (2013). The charged violations occurred between 2007 and 2010. The Regulations governing the violations at issue are found in the 2007-2010 versions of the Code of Federal Regulations (15 C.F.R. Parts 730-774). The 2013 Regulations set forth the procedures that apply to this matter.
The Consent Agreement was concluded in February for several violations of the EAR stemming from the illegal export of controlled technical data. Over the course of 5 years (from May 2005-July 2010), Intevac provided controlled technical data, classified ECCN 3E001 and controlled for national security reasons, to foreign nationals within the United States and to its subsidiary in China. Intervac provided a Russian national employee with a login identification code and password that enabled him to view, print, and create attachments of restricted articles. Specifically, Intevac released drawings, blueprints for parts, and identification numbers of parts, development and production technology subject to the Regulations, for a product used in hard disk drive manufacturing to a Russian national employee at its Santa Clara, California facility without the Department of Commerce license required by Section 742.4 of the Regulations. The transaction required authorization from BIS and is considered a Deemed Export. (See the charging letter for details.)
This violation is part of a common misconception that an “export” is only shipping a physical item outside the USA and tha cavalier attitude on the part of many US Companies that “we don’t do ITAR”. The fact that Intevac did voluntarily Self-Disclose the violation and still received a fine and potential debarment gives you an idea of how seriously Department of Commerce is taking violations today even with Export Control Reform.
Deemed Exports can be difficult for some to comprehend. Having foreign nationals working in the U.S. as full time regular employees is becoming more and more common, and will put you and your company at an increased risk if you do not manage it correctly.
Deemed Exports happen every day and are nearly impossible to stop. You must train your employees and your management team so that they understand that this is a violation and that any perception of time savings is just not real. The EAR and ITAR clearly explain that providing technical data to a foreign national constitutes an export. Know your data and know your recipient and avoid ending up in articles like this one.