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Access to US Controlled Technology

Access to US Controlled Technology by Bona Fide Regular Employees

Access to US controlled technology is heavily restricted. Entities that are given authorisation to deal with these items, must also ensure that all their employees meet the criteria of that authorisation. This chart details the methods that employees are permitted access.

Section 126.18 (c)(2) Dual or Third Country Nationals Exemption - Employer Responsibilities

To qualify for the section 126.18(c)(2) ITAR exemption, the Australian employer is responsible for screening their relevant bona fide regular employee(s) (see ITAR 120.39 for definition of regular employee). The purpose of the screening is to identify and prevent the risk of dual or third country nationals diverting US export controlled technology and goods to non-authorised third parties or destinations. The countries of most concern are listed in ITAR s126.1.

The screening process and employee standard required by an employer is discretionary. The employer must use their own judgement as to whether a substantive risk of diversion exists. Remembering that both the employer and employee are responsible for any US export control violations, it is in the employer's best interests to give the screening process careful attention.

The screening process relies on employees voluntarily agreeing to be screened. Unless they volunteer, screening should not occur and an alternative authorisation will need to be sought. Prior to implementing any process, an employer should seek advice from their human resource and/or legal department. All screening processes must be recorded in detail, maintained in accordance with the Privacy Act 1988 (Cth) and regular reassessments should occur.

Employers can consider the following measures as part of the screening process:

  • A risk assessment (International Standard ISO 31000:2009 is a recognised assessment method);
  • A police check;
  • Character references;
  • A questionnaire regarding:
    1. Personal contacts with foreign government officials, agents or proxies;
    2. Business contacts with foreign government officials, agents or proxies;
    3. Family contacts with foreign government officials, agents or proxies;
    4. Assets, businesses, residences in foreign country;
    5. Contacts with individuals posing a risk of diversion;
    6. Frequent travel to a foreign country; and
    7. Maintaining assets in a foreign country.
  • Inquiries into connections to individuals illegally dealing in arms, working for front companies or part of criminal or terrorist organisations. By way of example, the US Government maintains a consolidated list of entities that are sanctioned or otherwise subject to special scrutiny before accessing US defence technology.

It must be noted that mere contact with foreign individuals or organisations does not automatically raise a concern, but it is the nature and substance of the contact that is determinative of the risk of diversion.

Where a potential risk is identified the employer needs to consider its options regarding the access of the relevant employee. These may include:

  • the adoption of a management plan to reduce the risks of diversion;
  • not allowing the employee access to the US controlled technology; or
  • seeking US Department of State Assistance in devising a strategy.

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