TRUMP AND EXPORT REGULATIONS

Over the past few months, clients have continuously asked us what the implications of the Trump administration will be on Silicon Valley. There is currently a shortage of engineering talent in the U.S. With new trends such as machine learning, autonomous vehicles, computer vision, and robotics, all the major tech companies are ferociously battling to hire the top engineering talent. However, there aren’t enough highly skilled engineers in the U.S. to go around. Tech companies resolve this issue by using H1-B Visas to temporarily employ foreign engineers.

However, it is likely that Trump will impose policies that restrain trade between the U.S. and other countries, which will result in more protectionist laws on engineering talent. For example, these policies may negatively affect the H1-B Visa program and other programs that allow U.S. tech companies to bring in technical talent on a temporary basis.

The restriction on the programs will likely result in tech companies creating offshore campuses as Microsoft did when the H1-B program was severely limited. The legal implications of companies doing this however are clear because of the deemed export rules. Many HR directors are perplexed when they are told that visual access to U.S. restricted, U.S. origin technology by a foreign national working in a foreign country at a U.S. company anywhere in the world is the same as exporting that technology to the country of that foreign national. For example, if a U.S. facility in Dubai hires an employee from Iran to work with U.S. origin technology. It is as if that technology has been exported to Iran at the time of such access. It’s the same as exporting that technology to the country of that national, in this case Iran.

Though the deemed export rule normally applies to foreign national employees hired at US facilities. The same principles apply to US facilities in foreign countries.

So, if more offshore facilities are created because the Trump administration restricts immigration into the US, then the deemed export rule may cause havoc at these U.S. facilities in foreign countries.

HR directors are well advised to make sure that each foreign national with visual access to US origin technology at foreign facilities have the right, under US export law, to have such access to this technology. See 734.2(b) of the EAR.