On January 12, 2013, a coalition of civil society organizations including the New America Foundation's Open Technology Institute submitted comments to the U.S. Department of State in response to Public Notice 8086, the State Department Sanctions Information and Guidance issued on November 8, 2012. The executive summary of the coalition's recommendations with regard to the definition of "Sensitive Technology" is below. Read the full text of the comments (PDF).
The undersigned coalition of civil society organizations welcomes the Department of State’s Guidance on "Sensitive Technology". This guidance is an important effort to further clarify existing sanctions regulations and to make them more targeted. We appreciate the opportunity to comment and have outlined a set of recommendations to improve sanctions regulations that also have implications both for the export control regime and regulations administered by the Department of Treasury and the Department of Commerce.
We are aware that some of the elements in the Guidance are already covered by existing regulations, yet it is critical to further clarify the parameters of “sensitive technology.” This clarification can not only improve sanctions regulation to prevent the transfer of network technologies that can facilitate human rights abuses, but also can ensure that technologies that promote free and secure expression are available to individuals living under sanctioned regimes. We continue to be concerned that some of the technologies that promote free expression may be inaccessible as a result of over-compliance by vendors under the existing sanctions. Clarifying the breadth of “sensitive technology” and creating more responsive government processes can help to address this problem and resolve legal uncertainty. We also consider the proposed refinements useful in order to apply special penalties for companies that are evading the existing sanctions to sell products that fall into the category “sensitive technology.” Moreover, we want to highlight the potential transshipment of “sensitive technology” and recommend delineating technology transfers between third-party nationals and the sanction country based on explicit red flags and “know your customer” policies.
From a broader perspective, the concept of “sensitive technology” is useful but, in its current form, limited to sanctions countries. Many open questions remain regarding the export of “sensitive technology” to countries that are not on the sanctions list but with similarly questionable human rights records. We make some preliminary suggestions in this regard.
Specifically, we recommend that the Department of State:
- Revise the proposed terminology for the list of “sensitive technology” in order to more precisely define the function of significantly infringing equipment;
- Conceptualize dual use technologies as carrying a presumption of denial, wherein regulators or vendors limit the export of such goods to Iran and Syria unless it is clear that they will be utilized without contributing to repressive activities;
- Provide a set of red flags to identify and further investigate individual suspicious transactions in cases of the sale of physical goods or transactions conducted through negotiated sales;
- Provide more guidance as to what “rigorous due diligence” might involve and the context by which “know your customer” is to be understood with detailed suggestions outlined in our response below;
- Explicitly include after-sales knowledge with regard to due diligence;
- Emphasize that “know your customer” encompasses “know your reseller” and “know your regional partners,” including but not limited to direct inquiries into the reseller's or partner's business with entities of concern in Iran or Syria;
- Integrate discrete chapters on Internet Freedom within its annual Human Rights Reports as a source of information on states’ behavior.
Moreover, recognizing that the Department of State has limited role in licensing process itself, we recommend that the Department of State work with other relevant federal agencies to implement consistent reforms, including:
- Codify the U.S. government’s efforts to protect access to technology essential for ordinary network operation, personal computing or private communications in a broader General License within the Treasury’s export regulations, extending the previous authorizations for personal communications services to include commercial products and hardware;
- Ensure that any existing or future regulation pertaining to controlled technology allows for exemptions similar to those provided by TSU License Exception (15 C.F.R. 740.13), permitting allowances for open source or free and publicly-available software;
- Streamline and expedite the licensing process, with modifications that include implementing a 30-day time limit for license applications to be considered;
- Conduct recurring outreach to industry and civil society in order to ensure that federal agencies’ efforts match the fast pace of technological development, as well as changes in the methods used by infringing parties to bypass export controls.