News Update - March 16, 2011
By Alan Lee, Esq.†‡
H-1B Season Opening Up – Watch Out for New Technology Regulation Compliance Requirement
As organizations and applicants prepare their new H-1B filings for April 2011 (the start of H-1B season for initial filings seeking one of the approximate 85,000 quota numbers allotted annually to the category), they must be aware of the new requirement relating to controlled technology release which must be answered before a petition can be approved.
As of February 20, 2011, petitioning organizations must answer Part 6 of the revised Form I-129 petition to check off if an H-1B, H-1B Chile/Singapore, L-1, or O-1A nonimmigrant petition beneficiary requires an export authorization license under the Export Administration Regulations (EAR) or International Traffic in Arms Regulations (ITAR). The EAR lists dual-use items that may be of importance to U.S. government security, and ITAR primarily involves weapons and items modified for defense purposes. The EAR dual-use items (items that can be used for more than one purpose) will affect more petitioners as these are items, e.g., computers or chemical materials, which may be used across different types of businesses.
The U.S. defines an export as any transfer to a foreign person and a reexport as a transfer to legal U.S. residents with the knowledge that it will be further transferred to a foreign person. Allowing a foreign person access to technical data or controlled data is referred to as a “deemed” export. This affects co-workers in the same business group with even just one non-U.S. citizen where government-restricted information or equipment needs to be used. Export license authorization can be problematic in these situations as it takes time for approval. However, the foreign worker can be present on-site and is only restricted from performing tasks using the data or equipment in question while the export license authorization is pending.
A company or its compliance group should check if any of the technology it possesses is subject to either or both the EAR and ITAR in preparation for the above types of visa petitions that it is planning to sponsor. This is important as both the EAR and ITAR can carry denial of export privileges as well as costly civil fines and criminal penalties. Heavy fines and imprisonment can be applied retroactively. Fines can incur with submission of a first-time license application if it is found that the company should have applied earlier for export authorization. Even retired professors have been sentenced for having allowed foreign graduate students access to government-restricted equipment and data. Organizations are therefore strongly encouraged to develop a compliance plan or designate a group or person dedicated to export compliance.
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