Industry groups fighting proposed U.S. export control changes

The proposal by the Defense Department covers "deemed" exports. According to the Commerce Department, "An export of technology or source code (except encryption source code) is 'deemed' to take place when it is released to a foreign national within the United States."

The Pentagon wants to tighten restrictions on deemed exports to restrict the flow of technical knowledge to potential enemies. The new restrictions would among other things affect contracts for classified scientific research involving foreign nationals.

Groups like the Association of American Universities and the Alliance for Science and Technology Research in America have so far succeeded in extending the comment period on the proposed rule changes by one month to Oct. 12.

Among the groups' objections to the proposed regulations are ambiguous language, a failure to distinguish between government contracts and grants and the lack of government guidance on how the proposed rules would affect "dual-use" technologies. Opponents also point out that current U.S. export controls currently exempt basic research from deemed export rules.

Opponents argued in comments on the proposed rules that they are premature since the Commerce Department's Bureau of Industry and Security (BIS) is still considering industry comments. Still to be resolved, opponents said, is the correct interpretation of deemed export requirements for the use of equipment in university basic research programs.

"The university and business communities currently are engaged in a dialogue with [the Commerce Department] about these comments and the BIS response," an industry coalition told regulators in draft comments. "Other federal agencies should await guidance on the correct interpretation of regulatory provisions that are the subject of considerable controversy prior to attempting to impose related contract provisions."

William Wulf, president of the National Academy of Engineering, told the House Judiciary Committee during a September hearing on economic and military espionage that tightening deemed export rules could ultimately harm U.S. economic security. "Strict enforcement would undermine the culture that has proven so effective in furthering our security and prosperity," Wulf said. "Given that 55 percent of the Ph.D. students in engineering in the United States are foreign born, the effect could be catastrophic."

The U.S. EDA industry has also locked horns with the government over deemed export rules. The EDA Consortium has successfully lobbied regulators to clarify deemed export rules involving model-based simulation software.