The "Deemed Export" Rule and the First Amendment

Marty Lederman

The New York Times reports this morning that the Commerce Depatment is on the verge of promulgating new regulations restricting the ability of U.S. institutions, including universities, to expose foreign students to "sensitive technology."

For many years, the Commerce Department has imposed limits on the export of "technology" to certain nations (most importantly, China), and has further decreed that exposing such technology to foreigners here in the U.S. is "deemed" a restricted "export." "The rules govern the use of software, equipment or technical data that has military applications and therefore cannot be exported to certain countries without a license. A similar license, called a deemed export license, is required when the same sensitive technology is used by a foreign citizen in an American laboratory, on the ground that such a foreigner might return home and reproduce the technology there." (Some DoC Deemed Export FAQs can be found here.)

The new regulations -- a summary of the proposal is here -- apparently would tighten those pre-exisitng rules, by imposing additional safeguards to ensure that foreign students do not learn of U.S. technology. "The proposed . . . rules would require contractors, including universities getting research financing, to create separate security badges for foreign citizens and 'segregated work areas' for research using export-controlled technology." The Inspector General Report that prompted the proposed changes can be found here.

The Times story reports that universities are strenuously opposing the new rules, arguing that "tight restrictions on research by foreigners could backfire and actually hurt national security by hindering scientific progress."

The Times story doesn't note it, but this also raises a very interesting, and complicated, First Amendment question, involving the constitutional right of U.S. citizens (and companies and institutions) to share information with non-citizens. Because, for all the talk of "technology," "software," "technical data," etc., what this regulation truly is about is a straightforward restriction on the conveyance of information from one private party to another. Indeed, that's the whole point of the regulation: to prevent certain foreign nations from learning "sensitive" information, developed by and known to U.S. persons, that can be put to technological and military use overseas.

The data in question are information that the U.S. persons could, if they wished, make generally available to the public. Indeed, to the extent the information is widely disseminated, e.g., through publication, it has traditionally been exempt from the "deemed export" restrictions. See generally 15 C.F.R. 734.7-734.11. But the federal government in effect says to universities and corporations that if they choose to keep the information generally secret, or in-house (typically, for proprietary reasons), they then may not share it with certain foreign persons, even where the purpose of that sharing is not to facilitate overseas use of the information.

The way the Commerce Department's inspector general puts it is that the regulations are intended to "protect[] secrets from potential spies in American laboratories."

But this is (generally) not classified information, and is not government-owned "secret" information. The data are "secrets" only in the sense that U.S. business interests keep them generally under wraps, for proprietary purposes.

In general, of course, the government may not prevent me, or you, from telling our own secrets to whomever we wish, even where we have reason to suspect -- but do not intend -- that such secrets might be turned to disfavored uses. The interesting First Amendment question is whether and to what extent that basic constitutional rule is tempered when the audience in question is foreign, and when the unintended but foreseeable "disfavored use" is one that could harm national security interests. (Some readers may be interested to know that this was one of the very first questions Cass Sunstein wrote about after he left the Office of Legal Counsel. See Sunstein, Government Control of Information, 74 Cal. L. Rev. 889, 905-912 (1986).)

Disclosure: I worked on the deemed export rule when I was at the Department of Justice's Office of Legal Counsel, between 1994-2002.
Posted 7:46 AM by Marty Lederman [link]