ASML's Export Control Risk Screening When Hiring Isn't Discrimination, Dutch Body Rules

Chip company ASML Netherlands may refuse job applicants who may not be able to comply with U.S. export regulations, an independent Netherlands human rights monitor ruled this month, saying the refusal doesn't violate Dutch anti-discrimination laws. The monitor said ASML is justified in not hiring applicants from certain countries to positions where they could access U.S.-controlled dual-use technologies, according to an unofficial translation of the judgment, otherwise ASML could face “major risks of sanctions” from the U.S.

The ruling stemmed from a complaint filed against ASML by the Stichting Regional Anti-Discrimination Action Council, which asked the Netherlands Institute for Human Rights to assess whether the semiconductor company “discriminates on grounds of nationality” by refusing to hire applicants from Syria, Iran, North Korea and Cuba when those applicants don’t have Dutch nationality or permanent residence status in the Netherlands. The council said ASML rejects those applicants for positions where they would have access to certain American export-controlled technology.

Under the U.S. Export Administration Regulations, people from Syria, Iran, North Korea, Cuba and other countries are subject to strict deemed export licensing requirements for a range of items, which makes obtaining an export authorization unlikely. Because ASML uses American export-controlled technology, the company said it faces "major risks in the event of non-compliance with the EAR,” including by allowing certain third-country nationals access controlled technology.

But the Stichting Regional Anti-Discrimination Action Council argued that since the EAR isn’t a Dutch law, it’s “not applicable on Dutch territory” and doesn’t qualify under the Netherlands' definition of “generally binding regulations,” the ruling said, which includes “unwritten rules of international law.” The council said ASML is “therefore not entitled to rely on a statutory exception in the” Netherlands anti-discrimination law, known as the Equal Treatment Law, “now that the EAR cannot be regarded as a generally binding regulation or any other statutory ground for exception as described in the equal treatment legislation.”

ASML disagreed, saying the EAR does qualify as a generally binding regulation. If forced to violate the EAR, it could be subject to a range of penalties, ASML told the Netherlands Institute for Human Rights, adding that “it can be deduced” that the U.S. “has a significant number of investigations and cases [that] are pending in the context of the EAR.” It also said its employees “regularly travel” between the U.S. and the Netherlands, and “in the event of a violation of export regulations, both the defendant and the employee in question run a real risk of criminal prosecution.”

In ruling in favor of ASML, the Netherlands Institute for Human Rights said it “previously considered that the regulations issued by the US authorities sometimes have an effect outside” U.S. territory. “It has also been established that violation of these American regulations not only leads to major risks of sanctions for ASML itself, which could bring business operations to a standstill, but also risks of sanctions for the employee in question,” the judgment said. “Based on the information provided by ASML and on the basis of information from the previous assessments,” it's “plausible that these risks are real.”

An ASML spokesperson on June 27 said the company is "pleased that the institute decided we do not discriminate," adding that ASML employs more than 40,000 employees who represent over 140 nationalities. The Stichting Regional Anti-Discrimination Action Council couldn’t be reached.