In the United States, both shipments of goods and transfers of data constitute an export that is subject to U.S. export regulations. These types of transactions, as well as the transfer or release of data to a foreign national within U.S. territory (a deemed export) may require an export license or authorization to occur. However, addressing nationality of an individual can directly intersect with anti-discrimination regulations. Companies as well as educational institutions must be well versed in both export and anti-discrimination regulations to protect themselves from potential violations. This month’s hot topic will address the common pitfalls observed at the nexus of export and anti-discrimination compliance and provide some best practice recommendations that both companies and universities can implement within their policies and procedures to protect their exposure to potential violations.

Background

The Immigration and Employee Rights Section (IER) enforces the anti-discrimination provision of the Immigration and Nationality Act (INA).¹ This federal law prohibits: citizenship discrimination and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices during the employment eligibility verification (Form I-9 and E-Verify); and retaliation or intimidation. ²

A "foreign national" (under the Export Administration Regulations (EAR)) or a "foreign person" (under the International Traffic in Arms Regulations (ITAR)) is anyone who is not a “U.S. Person,” including foreign governments or entities not incorporated to do business in the U.S. Under the Immigration Reform and Control Act (IRCA) of 1986, “U.S. Persons” are U.S. citizens, U.S. legal permanent residents (green card holders), refugees, asylees, and temporary residents under specific IRCA amnesty provisions. These types of persons can also be referred to as “protected persons.” Because foreign nationals working on controlled technology may require an export license or authorization, companies face a challenge regarding how to accurately address these export restrictions while complying with the IER requirements.

Common pitfalls

The following are common scenarios that present gaps in meeting both export compliance and anti-immigration considerations:

1. Advertising a job to "US citizens only"

Companies often will limit the language of a job posting to be applicable to “US citizens” only. With this narrow scope, a company is refusing to hire “protected persons” which violates both export compliance regulations as well as IER controls.

2. Over controlling a job posting

Another common pitfall is that a job posting may over control a position that does not implicate export control laws. For example, there is no need to vet foreign national applicants from an export perspective if the job description does not involve the development, production or use of technology that is controlled by the export regulations. Conversely, if a job description does involve the development, production or use of technology, it may present a risk for a technology transfer. However, this does not mean that foreign nationals cannot be considered for the role. Rather, it means that thorough evaluation must be conducted on the Export Control Classification Number (ECCN) of the technology to determine which countries have restrictions. For example, certain technology may require a license if a Chinese national is hired to work on its development, production or use, whereas that same role may not require a license for a Singaporean national to work on it.

3. Not bifurcating candidate-review process to separate I-9 process from export control process

Another overlooked process is the failure to separate the export control process from the I-9 verification process. Human Resources, or your hiring department should be responsible for the I-9 verification process. Trade compliance, or your designated entity trained in export compliance should be handling the validation of export-controlled positions and the communication of potential controls to the human resources group. The two processes should not be handled by the same person.

Best practice recommendations

The following are some recommended process improvements that companies and universities can implement to protect their exposure to potential violations:

1. Vet before posting

Trade compliance, or your designated export-controls-trained resource, should vet the job posting for possible export controls prior to beginning the recruitment process. An internal checklist or process can be implemented for this step. By vetting upstream, an organization avoids over-controlling the recruitment process and can update job postings with potential export controls accordingly.

2. Update job posting with IER-approved language

The IER has designated the following language as "safe" to include on job postings for roles which may require additional export licenses or authorization: “are you legally authorized to work in the U.S.; or “will you now or in the future require sponsorship for employment visa status.” Including

3. Bifurcate candidate-review process to separate I-9 process from export control process

Once the recruitment process has begun for the jobs identified as having potential export restrictions, a well-documented process of the bifurcation of these processes is critical. If a candidate has indicated that they are not legally authorized to work in the U.S. or that they may require sponsorship for a visa, the export compliance resource can implement a checklist process to ask the specific questions to vet for an export license requirement. The I-9 and standard hiring processes can continue to be managed by the Human Resources/hiring group.

As the trade compliance resource, you can present these recommendations to the team handling the hiring process within your organization. Exhibiting due diligence in properly vetting positions for export compliance and separating the candidate vetting from the standard hiring process is critical. Documenting these procedures via checklists or procedures can protect your organization’s exposure to potential violations.

As always, BPE Global is in your corner and is happy to assist in any capacity. You can follow us on LinkedIn where we publish topical opinions on the ever-changing rules and regulations governing the landscape of global trade.

BPE Global is a global trade consulting and training firm. Gabrielle Griffith is a Director of BPE Global. You can reach Gabrielle by email at ggriffith@bpeglobal.com.

¹https://www.govinfo.gov/content/pkg/CFR-2017-title28-vol2/pdf/CFR-2017-title28-vol2-part44.pdf

²https://www.justice.gov/crt/8-usc-1324b-unfair-immigration-related-employment-practices

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