Deemed export laws are complicated. They can be confusing for all people – even Elon Musk. The serial entrepreneur and founder of SpaceX recently tweeted an (inaccurate) interpretation of U.S. export controls laws. This stems from the Department of Justice suing SpaceX for alleged discriminatory hiring practices.
Musk tweeted:
US law requires at least a green card to be hired at SpaceX, as rockets are considered advanced weapons technology
Predictably, the internet blasted off with his comment. It’s true that U.S. companies must abide by all U.S. laws, including export control laws and federal antidiscrimination laws. But the nuance here is something that requires more than a 280-character-limit tweet (err, we mean “post.”) Or whatever the platform formerly known as Twitter calls them now.
Let’s expand beyond 280 characters and take a closer look at this topic.
Two birds; one stone? How can U.S. companies comply?
U.S. export control laws require that only authorized personnel have access to export-controlled technology (technical data). This means an export license determination must be made prior to hiring, to determine if the technology to be shared is controlled, and to obtain export authorization if required. That authorization can come in the form of an export license issued by the U.S. Government. It could also mean identifying the applicable license exception/exemption that would authorize the non-U.S. Person (per the definition of U.S. Person) to access technical data.
Elon Musk’s interpretation seems to imply that DOJ prevents the hiring of non-U.S. persons. In fact, export control laws do not contain specific hiring restrictions. Instead, they dictate that prior export authorization is required, and companies must restrict access to those who require authorization (unless or until they receive it).
What should a company do if they hire a non-U.S. Person?
For starters, any company should have substantial and ongoing commitment of internal compliance resources. When the U.S. Government issues deemed export licenses, they are exclusive to the person and their scope of work, have an expiration date, and require that if a job function changes, the company must apply for additional approval in advance. Management of these authorizations and statuses can be burdensome, but it’s a vital step to complying with the regulations. Once a license is approved, it’s also a good idea to train those personnel involved about the specific parameters. Make sure everyone understands what technical details are in scope, what conditions apply, and how to adhere to the terms of the license. Keep good records to help support your organization’s compliance.
Should our job posting have specific language to alert applicants?
The short answer is “yes.” Explaining that “U.S. Persons” are more than just U.S. citizens is crucial. Under U.S. export control laws, “U.S. Persons” include U.S. citizens, U.S. lawful permanent resident aliens (green card holders), U.S. asylees and U.S. refugees.
It is also a good idea to share with potential employees whose job requires access to export-controlled technical data that certain documentation of their citizenship or immigration status could be necessary for the export license determination.
Overall, having a robust export compliance program that intersects various levels and departments of the organization is necessary to ensure the best talent is hired while also complying with the law. For a company like SpaceX, an accidental export violation could cost them their government contracts with NASA and DoD as the penalties for violating export control laws are substantial. However, compliance with the export regulations and anti-discrimination laws can be achieved by understanding the requirements and having the resources to comply.
You can read more about the intersection of antidiscrimination and export control laws in our blog post here.
Kristine Kelleher is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm specializing in U.S. import and export regulations.