• U.S. Exercises New Authority to Ban High-Tech Exports
  • April 3, 2013 | Authors: Corey L. Norton; Laura Venker
  • Law Firm: Keller and Heckman LLP - Washington Office
  • The U.S. Commerce Department has exercised for the first time its new authority to prohibit exports and domestic transfers of certain high-tech items. A Federal Register notice published today says that the new prohibition is effective immediately and applies to pretty much any unlicensed export of certain biosensor systems and related parts, described in more detail below, to anywhere other than Canada. Also prohibited is the sharing of related software and technology with many foreign national employees in the United States or abroad. The Commerce Department is accepting comments for sixty days.

    The biosensor systems covered are those that are capable of detecting the following aerosolized bioagents: anthrax, ricin, Botulinum toxin, Francisella tularenis, orthopoxvirus and Yersinia pestis. The prohibition would only apply to biosensor systems that also have the following characteristics:

    1. Can show results in three minutes or less,

    2. Have an integrated bioaerosol collector and identifier,

    3. Contain antibodies for any listed bioagent and

    4. Utilize bioluminescence as a process.

    Companies that export (as a sale, for an affiliate's use or for any other purpose) such items or that export or share related software or technology domestically will now possibly be subject to a penalty of $250,000 or more per unlicensed transaction. (As a side note, companies working with other similar detection and monitoring systems are already subject to export restrictions.)

    Today's action is the first time the U.S. government has used a new authority it created a year ago next month. It is referred to as the "0Y521" provision - a reference to a U.S. government export control list. That authority permits the government to immediately control the export of products, materials, equipment, software and technology it does not currently control but has come to believe raise a foreign policy concern (be it military or intelligence advantage or some other concern). The item that is then controlled can remain controlled for at least three years while the U.S. government considers possible efforts to have multilateral export control regimes also impose related restrictions.

    The 0Y521 authority allows the government to implement new export controls on sensitive items very quickly and without public notice. Any company that is engaged in cutting edge technological developments that might cause the U.S. government some concern were the technology to fall into the wrong hands should consider this authority.

    In particular, such companies should review the likelihood that the U.S. government would want to restrict the company's ability to conduct international business or use non-U.S. national employees in its operations.