In February 2014, the U.S. government imposed a US$115,000 penalty against Intevac, Inc., for alleged export control violations. The government's enforcement action against Intevac reflects far-reaching positions on circumstances in which mere storage of technical information can violate export controls. This is particularly true with regard to so-called "deemed exports" of technology – release of technical information to non-U.S. nationals in the United States.
Principal U.S. export controls include the Export Administration Regulations ("EAR"), administered by the Commerce Department's Bureau of Industry and Security, and the International Traffic in Arms Regulations ("ITAR"), administered by the State Department's Directorate of Defense Trade Controls. The EAR apply to commercial, "dual use" items, and the ITAR generally apply to military-related items.
Unlike the export controls of most other countries, the EAR and the ITAR provide for licensing restraints on "deemed exports" of certain technical information and software to non-U.S. nationals notwithstanding that they are in the United States. Release of export controlled technical information or software to a non-U.S. national can be deemed to be an export to the individual's home country if the individual is not a lawful permanent U.S. resident. Deemed export controls are particularly challenging for advanced technology companies as the controls can apply to release of technical information to non-U.S. engineers employed by the companies in the United States.
Intevac is a California-based supplier of static sputtering systems used to manufacture thin film disks for computer hard disk drives. The company acquiesced to the civil penalty in the context of a settlement with the Commerce Department under the EAR.
There are three respects in which the Intevac settlement reflects an aggressive Commerce Department approach to enforcement of technology export controls.