May 19, 2005 - ASM Comments on recommendations in the Department of Commerce Office of Inspector General Report on Deemed Export Controls and the Transfer of Sensitive Technology to Foreign Nationals in the US

U.S. Department of Commerce 
Bureau of Industry and Security
Regulatory Policy Division
14th & Pennsylvania Avenue, NW.
Room 2705, Washington, DC 20230
ATTN: RIN 0694-AD29

Re: Bureau of Industry and Security, Department of Commerce Advance Notice of Proposed Rulemaking for the Revision and Clarification Of Deemed Export Related Regulatory Requirements 70 Federal Register 15607, RIN 0694-AD29

The American Society for Microbiology (ASM) appreciates the opportunity to comment on the Advance Notice of Proposed Rulemaking regarding Revision and Clarification of Deemed Export Related Regulatory Requirements published at 70 Federal Register 15607, March 28, 2005 (BIS Notice). The ASM represents over 43,000 members who work in academic, industrial, medical and government institutions and laboratories. The ASM’s mission is to enhance the science of microbiology and to promote its application for improved health, environmental and economic well being.

The ASM has worked with Congress, the Administration and government agencies to develop legislation and regulations that ensure protection of public safety without encumbering legitimate scientific and health related research and testing. The ASM welcomes the opportunity to provide the Bureau of Industry and Security (BIS) , Department of Commerce, with comments regarding the adverse consequences to the conduct of fundamental research that would result from adoption of the recommendations of the Department of Commerce Office of Inspector General (OIG).

As noted in the March 2004 OIG report, the ASM has established internal publication procedures to provide careful prepublication scrutiny of articles dealing with certain biological agents. The ASM is sensitive to the need for balanced policies that protect against the transfer of certain scientific information that may result in the misuse of science. At the same time, the ASM maintains the utmost dedication to the need for policies that vigorously support the fundamental research and international collaboration upon which so much of humanity’s future welfare depends. The ASM agrees with Secretary of State Rice’s letter of November 1, 2001 to Dr. Harold Brown of the Center for Strategic and International Studies that “the linkage between the free exchange of ideas and scientific innovation, prosperity, and U.S. national security is undeniable.” Regulations that inhibit, delay, or diminish fundamental research are contrary to the interest of science and to the national interest of the United States.

The ASM submits that the revisions to the Export Administration Regulations (EAR) suggested by the OIG are not required by existing law, are ambiguous and unnecessary, and do not achieve a proper balance between security considerations and the conduct of fundamental scientific research. The recommended revisions would unnecessarily burden scientific laboratories, virtually vitiate involvement of foreign nationals in fundamental research within the United States, and not achieve additional security for the United States. For these reasons, the ASM asks that the BIS not proceed with the rulemaking but instead reconsider the need for any revision to the existing regulations and practices. If the BIS has need for revised procedures, it should develop an alternative approach that would advance collaborative research and minimize the imposition of burdens on research institutions and the performance of fundamental research within the United States.

1. Application Of The System Of Licensure Recommended By The OIG Would Create An Unworkable Regulatory System That Most Likely Would Vitiate Involvement Of Foreign Nationals In Fundamental Research Within The United States.

If the OIG’s recommendations were adopted, laboratories would have to obtain a license before any controlled technology could be transferred by way of operating instructions, training classes, informational materials, or otherwise to foreign nationals performing research in a laboratory within the United States. Although this requirement may technically not be triggered merely by the operation or utilization of equipment, the BIS Notice advises that the OIG report finds that operation of equipment “most likely is accompanied by some transmittal of information or instruction constituting ‘technology.’"1 Accordingly, in the absence of clarification of this point by the BIS, it appears that the operation of controlled equipment “most likely” would trigger a license requirement. Such a requirement, or even a license requirement for a more narrowly defined transfer of technology, would impose burdens upon laboratories and upon BIS that almost certainly would effectively preclude foreign nationals from working in research laboratories.

a. The recommended system would require laboratories to undertake actions that are taxing and unworkable.

To comply effectively with the recommended system, laboratories would need to determine all its laboratory equipment that is on the Commerce Control List (CCL). The CCL is divided into ten broad categories. These are: (a) Nuclear materials, facilities and equipment (and miscellaneous items); (b) Materials, Chemicals, Microorganisms and Toxins; (c) Materials Processing; (d) Electronics; (e) Computers; (f) Telecommunications and Information Security; (g) Sensors and Lasers; (h) Navigation and Avionics; (i) Marine; and (j) Propulsion Systems, Space Vehicles, and Related Equipment. In turn, each of these categories is divided into five product categories. These are: (1) Systems, Equipment and Components; (2) Test, Inspection and Production Equipment; (3) Material; (4) Software; and (5) Technology. Although many of the categories would not be applicable to most laboratories, the classifications of equipment on the CCL are lengthy and complex. Taking the step of inventorying equipment under the CCL would be a burdensome and time consuming process. Moreover, due to the complexity of the CCL and the likelihood that laboratories do not employ persons with expertise on these complex classifications, laboratories almost certainly would have to retain outside consultants to undertake the project. Thereafter, each acquisition of additional equipment would require a review of the CCL further burdening laboratory budgets.

Separately from inventorying its equipment, the OIG report suggests that deemed export policy should take into account the nationalities of foreign nationals based upon the foreign national’s place of birth regardless of the individual’s most recent citizenship or residency status. To implement such a requirement, the laboratory would need to determine each foreign national’s country of birth, nation of permanent residency, and most recent citizenship. Minimally, the laboratory would then have to correlate the nationalities of such researchers and employees with the CCL equipment used by such researchers and employees. More realistically, because of the likelihood of changing assignments within a laboratory and the availability of equipment to researchers, the laboratory would need to cross-reference each CCL item in its laboratory against the potentially multiple countries identified for each foreign national employed by the laboratory.

The laboratory then would have to file for a license for each foreign national affected by the cross-referencing. Importantly, the laboratory could not permit the researcher to “use” the CCL equipment until the license was obtained.2 This process of inventorying equipment, obtaining and maintaining additional nationality information, cross-referencing equipment with nationalities, filing for licenses, and holding positions in suspense pending issuance of a license unquestionably would result in substantial increases in expenses and time delays that would discourage retention of foreign students and researchers. For those laboratories that were able to bear the costs and delays, the additional and ongoing scrutiny of foreign nationals undoubtedly would chill the spirit of openness and collaboration in which research flourishes.

These burdens would compound the current burdens associated with acquisition and retention of foreign nationals for work in research laboratories that already encumber research. Faced with a duty to take on review and administration of a complex system related to usage of CCL equipment, laboratories may well abandon retention of foreign nationals to the detriment of science generally and the United States in particular. This outcome is even more likely when juxtaposed with the burdens that would be imposed upon BIS discussed immediately below.

b. Under the proposed system, the BIS would be required to make hundreds or thousands of individual licensures decisions related to the operation of a vast array of widely varying equipment and technologies by nationals with varying degrees of education, skill, and experience from numerous nations working in a host of laboratories. It is not clear that the BIS has the personnel, funding, or experience to make such licensure decision in a timely and effective manner.

According to the OIG report, in fiscal year 2003 the BIS considered 846 applications for deemed export licenses. According to the information in the OIG report, the average number of applications per fiscal year for fiscal years 2000 through 2003 was 886 applications.

Although the ASM does not possess definitive information on the number of foreign nationals performing fundamental research within the United States, it may be assumed that there are numerous foreign nationals working on fundamental research within the United States. Moreover, as foreign students arrive and depart from the United States, there would be a constant and ongoing change in the foreign nationals performing research.

If the recommendations of the OIG were implemented, it must be assumed that the BIS would initially face a deluge of licensure applications that would then continue to number in the hundreds annually as the population of foreign national students in the United States turned over. The BIS Notice does not describe the factors that BIS would apply in making licensure decisions related to such foreign nationals. For example, the BIS Notice does not assert that BIS would review the background of the foreign nationals in determining whether to issue a license. It is difficult to see how BIS would undertake a more meaningful inquiry than the inquiry preceding the entry of the foreign national into the United States and admission to a laboratory setting. Indeed, the OIG report states that since 2001 the Central Intelligence Agency has declined to review deemed export license applications because of the lack of derogatory “hits” they have obtained from this exercise in the past. Since then, BIS licensing officers from the Deemed Export Division have queried a CIA supplied database for information on any foreign national associated with a license application and/or any affiliated entities the foreign national has listed on his résumé (e.g., previous employers or universities attended). However, the OIG report concludes that BIS officials have not received any derogatory hits against this database since they began the exercise.

Separate and apart from reviewing the background of the specific foreign national, BIS would need to analyze each proposed transfer. Such a review presumably would include a determination of whether the work constituted a transfer of technology and, if so, whether the transfer met standards for licensure. The ASM is not aware of the specific standards that would be used by BIS in determining such matters as whether training a specific foreign national on a specific piece of equipment would meet standards for licensure. For example, would any weight be given to the identity and background of the individual foreign national or would there be a presumption that the training of any individual born in a country of concern constituted the transfer of the information to that nation?

Clearly, the addition of a duty to process quickly perhaps hundreds of license applications annually would impose new burdens on the BIS. If such applications were not handled very expeditiously then the implementation of the licensure program would be a certain death knell for the involvement of affected individuals in fundamental research as few if any laboratories may desire to make offers to researchers with the prospect of a lengthy delay to receive a determination whether the individual will be permitted to undertake the contemplated tasks. Moreover, as set forth below, such expenditures are unlikely to achieve any real security gains.

2. Application Of The System Of Licensure Recommended By The OIG Would Not Enhance The Security Of The United States And Would Be Contrary To The Announced Policies Of The United States.

a. Participation by foreign nationals in fundamental research within the United States substantially benefits the national interest and should not be unduly inhibited or discouraged.

The OIG report does not recognize or give sufficient weight to the essential nature of the research environment and the strategic importance to the nation of access to international talent for the success of the research and education system in the United States. As Secretary Rice’s letter of November 1, 2001 recognized, fundamental research relies upon open, international collaborations.

The OIG recommendation essentially would remove the fundamental research exemption from export control requirements because most likely licensure will be required as a prerequisite for involvement of an affected foreign national in such research. Even if the list of technologies and equipment of concern were reduced, extensive monitoring procedures would be needed.

Significant amounts of equipment involved in the conduct of university research are export controlled. Universities would have to track in detail and restrict their foreign students' participation in classes and research. It appears that many fundamental research projects at universities would require determinations of the need for deemed export licenses in order for foreign students, faculty, visitors, technicians and research staff to work on such projects. Such a policy would slow and disrupt research at academic institutions, would discourage foreign student and scholar participation in important life science research, and would threaten continuing leadership by the United States in fundamental research, education, and innovation.

b. There is no evidence that the current system exposes the United States to security risks warranting additional infringements upon fundamental research.

The OIG recommendations do not appear justified by real threats to national security resulting from the current system. The OIG report provides no evidence that existing controls do not work or that additional burdensome controls are necessary.

On page 14 of the OIG report, for example, the report states that a fermenter having a 20-liter, or larger, capacity is controlled by inclusion on the CCL under Export Control Classification Number (ECCN) 2E301. Certainly, however, instructing a foreign national on the means to use a fermenter in the context of ongoing fundamental research should not be deemed either a transfer of controlled technology or an act that endangers the security of the United States. The interest of the United States involves the access of a foreign nation to that equipment and not an instruction on how the equipment may be used.

Students who are foreign nationals are already screened by visa mantis procedures before they are granted a visa, and there is no suggestion that BIS could take more substantial procedures in evaluating an individual foreign national in the context of a license application. The visa process is intended to assess threats to national security before approving entry into the United States for individuals pursuing research and education. Laws and regulations already are in effect to restrict access to certain biological agents. Processing thousands of export licenses would unnecessarily require an expansion of government resources and would delay research and education and further encourage international students to study in other countries rather than in the United States. Following the September 11, 2001 terrorism attacks, the university and scientific community worked with Congress and the Administration to formulate changes in visa and other policies affecting select agent research to meet national security goals without unduly compromising openness and the strength of research and education activities. The work of those parties should be honored and observed by BIS.

3. The Interest Of The United States Is Furthered By Encouraging Scientific Collaboration. Regulations That Inhibit Such Collaboration Are Contrary To The Security Interests Of The United States And Retard Scientific Advances Crucial To The Welfare Of Humanity And Important For Continuing Leadership By The United States In Science.

All education entails some degree of risk that the educated individual may turn his/her knowledge to wrongful purposes. The policy of the United States is that national security is best served by encouraging to the maximum possible extent the free flow of scientific and technical information.

Mechanisms exist to control findings that have clear implications for national security. National Security Decision Directive 189, formulated in l985 and restated in 2001 as American policy, states that, to the maximum extent possible, fundamental research should remain unrestricted The revisions suggested by the OIG would unduly restrict the involvement of foreign nationals in fundamental research and should not be pursued by the BIS.

Sincerely,

James M. Tiedje, Ph.D., President, ASM

Footnotes:

  1. The scope of the impact of the recommended change in the definition of “use” is not clear from the BIS Notice and OIG report. The BIS Notice suggests that there would have to be a “transfer” of technology under the recommended revised definition of “use.” Presumably, such a transfer would result from instruction or training on the use of the equipment or from the communication of any information related to the design, performance, capacity, or use of the equipment. However, the OIG report suggests that the redefinition of “use” may be triggered by the “use” of controlled technology. In either case, in light of the comment in the BIS Notice that operation of equipment “most likely” includes transmittal of information that would constitute a transfer of technology, this ambiguity may not be important because it appears that, under either interpretation, operation of controlled equipment likely would result in a deemed transfer of technology.
  2. As noted it appears that technically a researcher might be able to work in the laboratory as long as he/she did not receive any transfer of information related to the CCL equipment. However, it is also possible the government would take the position that access to information about such equipment, even if the equipment were not ordinarily operated by a researcher, would require a license. In any event, simply from a logistics, enforcement, and recordkeeping perspective it is impracticable to have researchers in the laboratory who are not permitted to use certain categories of equipment.

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