Remember Export Compliance Goes Along With NDAs

The key to your company’s success, especially when concerning the exchange of technology with your strategic partner is perhaps one of the most critical developments of innovative products which are considered to be the lifeblood of technology companies. However, you need to be careful and highly vigilant that you don’t lose sight of your export compliance obligations and regulations with your new product development activities.

In fact, even unintentional mistakes can lead to adverse public relations, penalties, fines, and distraction of the management. Remember, export compliance isn’t just an issue about your product, but it has to do with issues with your technology as well.

Companies that have technology based products who engage in new product developments should know that it’s more important and attractive to pursue such activities by discussing it with your strategic partners.

The key focus of this practice stems from the execution of the non disclosure agreement (NDA) which is intended to protect the party’s confidential information. However, all too often, companies hardly consider the impact that export control regulations will have on their arrangements and documents that are covered.

It’s a clear sound practice to maintain a form of process, in order to ensure that all legal documents receive an appropriate review. This process simply safeguards the documents that are being reviewed for export compliance. Regrettably, companies quite often fail to reach out to their NDA process which is concerned with the normal level of export compliance diligence when their products are being exported. So, don’t make that mistake!

There are a few important procedures that you need to take into account when reviewing for an NDA for export compliance:

  • Determine whether you need a license to export the technology.
  • Screen the parties involved.
  • The end places and uses that are included in the NDA.
  • Ensure appropriate export control provision.

The NDA needs to include a provision that focuses on export compliance obligations by specifying that no party will export their technology under the NDA, nor will they take any other action that is in violation of the export controls rules and regulations. These provisions simply put the parties involved on notice, who need to be aware of the export control issues as well as ensure compliance.

Many different kinds of products and the technology involved in designing the products cannot be exported without a license from the U.S. Department of Commerce’s Bureau of Industry and Security or from the U.S. Department of State’s Directorate of Defense Trade Controls. Depending on how the product is categorized, the technology that needs to be disclosed under the NDA may require a license before being exported in any form, whether by fax, email, in a meeting or even to a foreign person located within the U.S.

Just as some entities or individuals may be unable to acquire your technology, some uses can also be prohibited or require a license, which includes missile technology, nuclear, biological or even chemical proliferation activities,

The NDA reviews needs to include confirmation that the arrangements being made do not involve individuals or entities from countries with which the U.S has maintained sanctions, generally enforced and administered by the OFAC like North Korea, Iran and Cuba.

The sharing of information with various business partners will always be an important medium by which U.S. Companies can develop amazing new technologies and will allow them to successfully compete on a global scale. If you incorporate the use of export compliance practices in your organization when concerning such exciting opportunities, you will be taking serious steps to ensuring that the export control laws are followed, thus protecting your own technology.

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