U.S. Export Control Guide for Foreign Companies: Navigating CFIUS, ITAR, EAR, and AI Regulations

Entering the U.S. market offers tremendous opportunities for foreign companies—but also presents legal complexities, particularly around national security regulations. Among the most critical areas to understand are U.S. export controls, which regulate the transfer of specific technologies, products, and technical data to foreign persons or countries. These rules extend beyond traditional exports and can impact activities within the U.S., including investments, research collaborations, and employee access to sensitive data.

This guide introduces foreign entrepreneurs and companies to the three primary U.S. export control regimes:

– CFIUS – Committee on Foreign Investment in the United States
– ITAR – International Traffic in Arms Regulations
– EAR – Export Administration Regulations

Understanding these regimes—and how they apply to your business—is key to avoiding penalties, delays, or blocked transactions.

1. CFIUS: Foreign Investment Scrutiny 

The Committee on Foreign Investment in the United States (CFIUS) is an interagency U.S. government body that reviews foreign investments in U.S. businesses to assess potential threats to national security. CFIUS can block or unwind transactions if it determines that the foreign party may gain access to sensitive technologies, data, or infrastructure.

Who Should Pay Attention?
Foreign entities acquiring or investing in U.S. companies involved in critical technologies, infrastructure, or personal data collection should evaluate whether a CFIUS filing is mandatory or advisable.

Example: A foreign aerospace company acquires a U.S. satellite startup. Because the startup handles sensitive space technology, CFIUS review is triggered, and the deal may require mitigation measures to proceed.

2. ITAR: Controlling Defense-Related Technologies 

The International Traffic in Arms Regulations (ITAR) control the export and handling of defense articles, defense services, and technical data listed on the U.S. Munitions List (USML). ITAR restrictions apply even inside the U.S. if sensitive data is shared with a foreign national—a concept known as a “deemed export.”

Key Considerations:
– Even foreign nationals lawfully present in the U.S. (on H-1B, O-1, J-1 visas, etc.) must be licensed to access ITAR-controlled data.
– Licensing must be obtained from the U.S. Department of State before sharing controlled information.

Example: A U.S. biotech firm develops battlefield biosensors. A foreign researcher cannot legally access the technical data without prior ITAR authorization.

3. EAR: Dual-Use and Emerging Technologies 

The Export Administration Regulations (EAR) govern dual-use items—commercial products or technologies with potential military applications that are not covered by ITAR. These items are classified under the Commerce Control List (CCL) and may require a license depending on the destination, end-use, and end-user.

Deemed Export Alert:
Just like ITAR, EAR also treats sharing controlled technical information with foreign nationals within the U.S. as an export.

Example: A startup develops AI for autonomous navigation. If the software can be adapted for military drones, sharing it with a foreign co-founder may require an EAR license—even if they’re located in the same U.S. office.

4. Regulatory Update: Recession of the AI Diffusion Rule and Deep Tech Strategies 

Recent Policy Change:
The U.S. government recently rolled back key provisions of its proposed AI diffusion rule, which sought to restrict the sharing of advanced AI models. This temporary easing reflects industry concerns about innovation constraints but does not remove export control risks under existing rules.

Strategic Guidance for AI/Deep Tech Firms: 
– Classify Your Technology: Use the EAR’s ECCN or apply for a commodity classification request (CCATS) for clarity.
– Protect Data Pipelines: Separate U.S.-origin data and proprietary model training components.
– Structure U.S. Operations Thoughtfully: Use subsidiary models or U.S.-based technical teams to reduce export exposure.
– Plan for Deemed Export Risks: Foreign founders or engineers may need licenses even if physically present in the U.S.
– Monitor BIS & CFIUS Activity: Policy updates are ongoing and may reintroduce AI-specific controls.

This regulatory flexibility offers a strategic entry window—but only for companies that proactively assess and mitigate export risks.

5. The Critical Role of Legal Counsel: Export Controls + Immigration Expertise 

Successfully expanding to the U.S. requires more than technical compliance. Many foreign companies fail to realize that export control issues and immigration matters are deeply intertwined.

Why Dual-Licensed Legal Expertise Matters: 
– Visa Sponsorship + Export Control Alignment: Hiring foreign engineers or transferring international staff may trigger ITAR/EAR “deemed export” concerns.
– CFIUS and Ownership Structures: Legal advisors can help structure investments and licensing agreements to avoid triggering mandatory filings or reviews.
– Licensing and Strategic Planning: Attorneys experienced in both domains can evaluate your products, people, and deals to determine where export licenses or exceptions apply.
– Ongoing Compliance: Dual-qualified counsel can help build internal compliance programs and training tailored to your company’s immigration profile, technology footprint, and long-term goals.

Bottom Line: Working with legal counsel that understands both U.S. export control law and immigration regulations gives foreign entities a decisive edge—enabling safe, scalable growth in a complex regulatory landscape.

Foreign companies seeking to expand, invest, or license their technologies in the U.S. must carefully navigate a web of export control regulations, particularly CFIUS, ITAR, and EAR. Recent developments in AI-related policy further underscore the dynamic nature of U.S. national security oversight. 

However, with strategic planning and experienced legal guidance—particularly from counsel qualified in both export control and immigration law—foreign entities can successfully manage compliance risks, avoid costly missteps, and position themselves for long-term success in the U.S. market.

Written by Kripa Upadhyay.
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