September 22, 2020

Volume X, Number 266

September 21, 2020

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DOJ Issues Guidance on Balancing Employer Non-Discrimination Obligations with ITAR and EAR Compliance

On March 31, the U.S. Department of Justice (DOJ) issued guidance on balancing an employer’s obligation to comply with the anti-discrimination provisions of U.S. employment regulations with its obligation to comply with the “deemed export” provisions of U.S. export control laws, in particular, the International Traffic and Arms Regulations (ITAR) and Export Administration Regulations (EAR).

Under the ITAR and EAR, a disclosure of controlled technical data or technology to a foreign person in the U.S. is considered an export and may require an export license. This “deemed export” licensing requirement affects U.S. companies with employees working in the U.S. under temporary work authorizations, e.g., H1-B visa. In particular, the requirement impacts U.S. companies involved in defense and “high-tech” industries.

The DOJ guidance clarifies that while the ITAR and EAR may require an export license for non-U.S. persons to access controlled technical data, these regulations do not restrict the recruitment and hiring of non-U.S. persons. As such, the guidance discouraged inquiries regarding the citizenship and immigration status of applicants or new hires for all positions. However, the guidance indicates that an employer hiring for a position involving access to ITAR or EAR-controlled information may inquire about immigration status so long as they ask all applicants for that position and make clear that inquiry is being made solely to comply with export licensing requirements. Additionally, the guidance states that a staffing agency cannot restrict potential assignment to a job requiring access to ITAR- or EAR-controlled technical data based upon an individual’s immigration status.

Moreover, DOJ cautions that any document verification process implemented by an employer to determine whether an employee triggers the ITAR and EAR licensing requirements must be kept separate and distinct from that employer’s employment eligibility verification process.

To ensure compliance while navigating this difficult area, companies may consider having their export compliance officer ask about citizenship and immigration status only after an offer has been extended for a position requiring access to ITAR- or EAR-controlled data. Additionally, the company should consider informing the employee in writing that the sole purpose of such inquiry is to determine applicable ITAR and EAR licensing requirements. Companies may want to discuss this DOJ guidance with their employment counsel and review their current export control policies and procedures to ensure they are consistent with that guidance.

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume VI, Number 137


About this Author

Karen A. McGee, Barnes Thornburg Law Firm, Washington DC, Corporate Law Attorney

Karen A. McGee is the Managing Partner of the Washington, D.C. office of Barnes & Thornburg LLP and a member of the Global Services Practice Group, Associations and Foundations Practice Group, and the Corporate and Intellectual Property Departments. Ms. McGee concentrates her practice in the international trade area.

Ms. McGee counsels foreign and domestic clients and trade associations on international trade regulatory matters involving the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR); foreign assets controls; antidumping and...

Linda M. Weinberg International trade lawyer Barnes Thornburg

Linda Weinberg provides practical advice to business and institutional clients on international trade law, including export controls, foreign assets control and customs. She works regularly with the U.S. and foreign government agencies that regulate international trade to help clients realize their distinct objectives surrounding their global commerce initiatives.

Co-chair of the firm’s International Trade practice group, Linda advises and represents clients on commodity jurisdiction, export classification, licensing, technical assistance agreements, and enforcement related to defense articles and dual-use items, encryption software and technical data and services. Her experience extends to a range of industries, including aerospace, satellite, nuclear, electronics, defense, security and software, among others. She has represented clients in export control matters elevated to the inter-agency Operating Committee and the Advisory Committee on Export Policy.

Linda is a member of the core team assisting the Special Compliance Coordinator appointed by the U.S. Department of Commerce to monitor, assess and report on the U.S. export control compliance of Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China, and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (collectively, ZTE).

In addition, Linda provides clients with counseling, licensing services and enforcement representation with respect to U.S. economic sanctions, related USA PATRIOT Act issues, anti-boycott regulation and CFIUS. Notably, she assists research and development companies and universities in complying with U.S. export control laws, particularly with respect to technology transfers to foreign national researchers and students.