The Intersection of Deemed Exporting and Foreign Nationals in the Work Place
For over thirty (30) years, Klimek, Kolodney & Casale, P.C. has practiced at the intersection of Export Compliance, Defense Industrial Security and the movement of Foreign Nationals in and out of the work place, as well as navigating the morass of regulations from Visitor status through the gauntlet to Green Card.
It has been our business to prevent export compliance violations where most companies never even thought to look. By 2010, when export compliance was added to USCIS form I-129, the Immigration Law community and HR thought it was a new regulatory compliance requirement.
U.S. Immigration law is complex, export compliance is even more complex. Bring the two together with one professional. Many companies take the approach of pulling together an ad hoc team. This approach lacks continuity and increases the schism in communication between personnel and operations, leaving your company particularly vulnerable to deemed export violations.
The ideal link between these two specialties is having one person who can speak both languages. That is a rare specialization that we can offer our clients at Klimek, Kolodney & Casale.
This area of export compliance is growing in complexity since Export Control Reform (ECR) was launched and the first transition to the 600 Series of the Commerce Control List (CCL) occurred in October of 2013.
There are real consequences in deemed export violations. In February 2014, a U.S. Company was fined $115,000.00 for the release of 3E001 technology to a Russian Foreign National employee in the ordinary course of that person’s employment duties:
- A Company in its Santa Clara location had a Russian National employee. Between January 2007 and August 2007, the company released 3E001 technology to its Russian National employee, including drawings, blueprints for parts, identification numbers for parts, development and production, without the required license.
- After discovery, the Company did apply for a deemed export license, BUT failed to prevent additional releases of technology while the license application was pending. BIS charged the Company with knowledge of the additional releases. The Company was also charged with one violation related to the unauthorized transmission of the technology to its subsidiary in China.
This type of violation could have been prevented by incorporating some simple steps in the Technology Control Plan (TCP) and/or improving hiring procedures.
There remains many misconceptions as to what can and cannot be asked about Citizenship and National Origin on pre-employment forms and in interviews, in order to prepare early for export compliance requirements. Many companies grasp at the outermost fringes, both positions are wrong.
Protected Individuals Only Is Not a 100% Safe Haven
At one extreme, some Employers think a hiring policy of hiring only "Protected Individuals" is full armor against a claim of Citizenship and/or National Origin discrimination. It’s NOT.
- The Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC) commented in a January 2015 Technical Assistance Letter that an Employee dismissed for having provided false documents of Protected Individual status during the hiring process who later brought what they claimed were the genuine documents could bring a Citizenship Status or National Origin discrimination claim in the event of termination of that Employee. OSC said it would investigate such as a charge. Most would be surprised by that.
- OSC did qualify its statements by saying "an employer with a consistently-followed policy of terminating individuals for providing false information during the hiring process may have a legitimate non-discriminatory reason for the termination. Accordingly, whether or not this Office concludes that such a termination violates the anti-discrimination provision depends upon the facts presented." That is not exactly a ringing endorsement of a "Protected Individuals Only" hiring policy.
An Employer CANNOT Ask Any Questions About Citizenship or National Origin pre-Hire – NOT True
At the other extreme, some Employers think they are a victim of the hiring process and cannot ask any questions about Citizenship and National Origin in the hiring process – NOT True.
- OSC February 2013 Technical Assistance Letter states in pertinent part that "If the information is sought for compliance with export licensing requirements, and not for employment eligibility verification or any discriminatory purposes, inquiring about an applicant's citizenship or country of origin for this purpose would not appear to violate the INA's anti-discrimination provision as long as such inquiries are made uniformly and without the intent to discriminate on the basis of national origin."
How do you frame these pre-employment question?
- That’s where effective Counsel who understands both Immigration and Export Compliance comes in. OSC will not give Employers legal advice.
A Qualified Worker Who Needs an H1-B Visa for Lawful Employment Can File a Discrimination Claim if Not Hired. NOT True.
An individual with or seeking an H-1B visa would not be able to establish a prima facie case of citizenship status discrimination because that individual is not in the protected class, and a company can choose not to employ a person because that individual requires visa sponsorship. (OSC September 2013).
The Employer really wants to hire the individual immediately after graduation. The individual needs an H-1B visa and the Employer and the Employee want two-bites at the Master’s Cap. The Student is finished with all requirements but the diplomas are not issued until May. The CAP Case filing is due April 1.
Should I Push the Envelope on Qualifications the Hiring Manager Asks?
NO. It's NOT Worth the Risk of Denial.
The Master’s CAP is for U.S. advanced-degree holders. To be included in this group, the Foreign National must have ALL qualifying Master’s or higher U.S. degree requirements as of the date of filing the petition. Basically the diploma in hand. For several years that date has been April 1. In the past, USCIS has accepted documentation from the University signed by a University Official such as Registrar or Dean of Students; the DSO may not be a high enough official for such a letter. The letter typically would state that the student has completed the entire degree and, but for the presentation of the diploma, the student has graduated. The biggest problem with this aggressive strategy is there is nothing in the regulations stating that USCIS must accept such evidence. Attempting to push this interpretation can lead to a denial of the CAP case. If the Employer is lucky enough to succeed with such a CAP case, there could still be problems with future benefits for this Employee. Many Universities will not even consider issuing such a letter. For those that will, this is a very high risk approach that could haunt the Employee for their entire career.
Need help with your deemed export compliance, TCPs and Foreign National Employees? -- Call us at (202) 785-0491.
Copyright ©2016 by Klimek, Kolodney & Casale, P.C. All rights reserved. You may reproduce materials available at this
site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.