Export Control License: End-Client is Responsible

Export Control License: End-Client is Responsible

As previously reported, the current form I-129 requires H-1B, L-1 and O-1 petitioners to verify whether export control license is required before the petitioner may provide access to controlled technology or technical data to foreign persons in the U.S.

In a third-party (client) worksite situation, it was unclear whether the H-1B petitioner or the end-client is responsible for obtaining authorization for a deemed export.

In an April 8, 2011, advisory opinion, the Department of Commerce confirmed that, when a foreign national is working at a third-party client location, it is the responsibility of the client company to obtain authorization for a deemed export if the client might provide the foreign national with access to technology or source code subject to the Export Administration Regulations (EAR). The end-client must comply with the obligation because it is the entity making the release of technology or source code to the foreign national and is therefore considered the exporter subject to the obligations.

Although the end-client company (that releases the controlled technology to the foreign national in the United States) is responsible for obtaining the required export license, the IT consulting petitioner, however, as part of the certification process, needs to conduct due diligence as to whether a license is required and, if so, what steps it will take to ensure that the foreign national will not have access to the technology or data until the license is obtained. The IT consulting petitioner should ask its end-client to confirm whether the technology or data involved is controlled or not.

If it is not yet known at the time of filing Form I-129 whether the prospective employee will have access to controlled technology or data, DOC suggested that the petitioner make the best educated determination when completing Form I-129 Part 6 and explain this determination in Part 9 of the form.

DOC advises that it is important to review the job description, what technology the employer will release to the foreign national and to consult with an export controlled attorney or compliance officer as to whether a license may be required. The Commerce Department's website, www.bis.doc.gov, has step-by-step instructions on how to apply for a license or commodity classification.

DOC also suggested attributes of good compliance while waiting to obtain a license. Specific best practices could include: (1) establishing effective firewalls through electronic and physical means; (2) keeping good records; (3) instructing people who work with the foreign national that he or she should not have access to certain controlled technology or data until they receive U.S. Government authorization; and (4) maintaining weekly reports that the company has confirmed that the person does not have access to the controlled technology or data.