Technology Transfer Control Laws

The U.S. government’s definition of “technology” refers not only to physical goods, but to any specific information necessary for the development, production, or use of a product. Therefore, any of your company’s technical data that is “leaked” to unauthorized foreign nationals constitutes an export of technology to that foreign country, so that from an export control standpoint, the security of your technical data is vital for maintaining compliance with export control regulations.

Even when technology transfers are being conducted in a perfectly legal manner, it is important for company compliance officers to have the ability to view, monitor, and track that the transfers are occurring according to all government guidelines, and according to the details of the relevant agreements. This is because, for many corporations, there will be numerous individuals named in agreements who are authorized to access technical data; they will likely be doing so from a variety of different subsidiary companies in diverse locations throughout the world. Without effective oversight of tech data transfers, there is no way to know that your company is not inadvertently transmitting data to unauthorized parties who may use your technology to harm the United States and its allies.

Penalties for Illegal Technology Transfer

Proper supervision of tech data transfers is a responsibility your company cannot afford to ignore—if your technical data is being transmitted illegally, you are accountable. The illegal transfer of technical data poses a grave threat to the lives of the soldiers who put themselves in danger every day to protect you, which is why companies found to be violating export regulations with unauthorized tech data transfers face all the same penalties as they would for physically delivering controlled goods to any denied, restricted, or debarred party.

The consequences for non-compliance can include millions of dollars in monetary fines, temporary or permanent revocations of export licenses or cancellation of agreements, and for violations deemed to have been willful, even criminal prosecution including imprisonment. On top of the inevitable and irreparable damage to your company’s reputation if violations are detected, you may be inadvertently aiding enemies of the United States and its allies.

Technology Transfer Control Risks

Technology Transfer Control is just as important—if not even more—than preventing physical shipment of controlled goods into the hands of terrorists or other barred foreign persons and organizations. It is bad enough allowing controlled goods to be delivered to entities seeking to do harm to the United States and its allies, but providing the information necessary for them to manufacture their own weaponry, aerospace articles, or dual-use goods, guided by American designs, would be even worse.

The government’s agreements permitting tech data transfers beyond the United States contain many details and restrictions, but they also make it possible for numerous individuals and divisions across multiple locations throughout the world to work together efficiently and legally. That’s why maintaining control over your company’s technical data transfers is such a vital piece of your export compliance program. You must keep track of all data being transferred, by whom, to whom, where and why, in order to remain within the boundaries of the agreements and detect and halt any unauthorized transfers.