The study focused on products and services in the following markets: engineering, computers, the physical sciences, and the life sciences. “Foreign businessmen,scientists, engineers, and academics from countries of concern have gained unauthorized access to controlled dual-use technologies in the United States, according to intelligence and law enforcement sources,” says the GAO report. While the countries of concern are not listed but based on prior reports, China is likely at the top of the list. There were 13 countries reviewed.
Under U.S. law, companies and universities need to secure U.S. Government approval before releasing controlled dual-use technology or source code “subject to the EAR” to a foreign national who is either (1) not a permanent resident of the United States; or, (2) a member of certain groups of protected individuals such as asylum holders. Because there is a supposed shortage of qualified U.S.-born engineers and scientists, or so the argument goes, companies and research universities must turn to foreign sources to remain competitive.
The GAO made some interesting but not earth shattering conclusions. It states that in “2002 we reported that the deemed export licensing system did not provide adequate assurance that U.S. national security interests were protected from countries that gather information on dual-use technologies to build weapons systems. This conclusion remains relevant today.”
From a regulatory compliance standpoint, it is not an easy matter. These days companies need to focus on numerous regulatory regimes in these cases to move the process along including export controls as well as immigration rules. To the Obama Administration’s credit, it has tried to move the reform process forward and has made some interesting changes that may improve the regulatory system; however, there will always be disagreement in this area as to how much control will be necessary.
While there is no silver bullet, information-sharing amongst the key agencies and robust law enforcement will go a long way in improving the system. For the private sector and academia, it needs to continue stepping up contribute to that process by having solid compliance programs in place.
The GAO report is available here.
