Nelson Dong, Dorsey partner and specialist in international technology transfers and export control compliance matters, discusses the application of the Export Administration Regulations (EAR) to U.S. companies doing business with China or employing Chinese nationals.
According to Dong, U.S. government enforcement agencies have effectively tripled their collective rate of convictions (from 2001 to 2005) in cases involving technology transfer to China or Chinese nationals in violation of EAR. Under EAR, release of prohibited technology can be implicated by visual inspection by foreign nationals, oral exchanges, or application under the guidance of persons with knowledge of the technology.
Since the explosive growth of the Chinese market has caused virtually all parts of U.S. companies, from R&D and marketing to manufacturing and HR, to have direct and fast-moving contact with Chinese nationals, Dong counsels these companies to institute comprehensive EAR compliance measures.
The article "U.S. Technology Companies in China and New Pathways to 'Deemed Export' Compliance" was published in the Spring 2006 edition of Techline and is reprinted with permission.