Export Controls in Research & Education at

Georgia TechSchool of Chemistry and Biochemistry

February 21, 2012

The Regswww.export.gatech.edu

1. State Department - International Traffic in Arms Regulations (ITAR)

– covers military- and space- related technologies

2. Commerce Department - Export Administration Act (EAR)

– covers commercial technologies– covers “dual use” technologies

3. Treasury Department - Office of Foreign Assets Control (OFAC)

– administers sanctions that apply to certain nations

– regulates transfer of assets or services to those countries

– may prohibit travel/other activities with sanctioned countries & persons even when exclusions to EAR/ITAR apply

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China Military Catch All

• June 2007 EAR changed to add “China Rule”

• When exported/re-exported for a military end use in China

• If you know or have reason to know of military end use you may not rely on an exception

• Note NO ITAR exports to China without license

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Sanctioned/Embargoed Services Under OFAC

– Creating new information materials at the behest of persons in a sanctioned country

– Engaging the services of persons in a sanctioned country to develop new information materials

• Restrictions vary by country• OFAC Maintains Specially Designated Nationals List

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Foreign Corrupt Practices ActThe FCPA makes it unlawful to bribe foreign government officials to obtain or retain business. The FCPA prohibits:– paying, offering, promising to pay

money or anything of value to a foreign official, a foreign political party or party official, or any candidate for foreign political office.

– payments made in order to assist the firm in obtaining or retaining business for or with, or directing business to, any person.

– corrupt payments through intermediaries.

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EAR for 22 Countries

EAR for Group

B Countries

Including India and Israel

Fundamental Research

OFAC

Increasingrestrictions

International Traffic in Arms (ITAR) Regulations

Fundamental Research

Export Administration Regulations (EAR)

Office of Foreign Assets Control (OFAC) Regulations

ITARLicense

Required

OK for Group B Countries

Including India and Israel

No License Required

OK for All but Embargoed Countries

Embargoed Countries: Cuba, Iran, North Korea, Sudan, Syria

What’s controlled and to where?

Embargoes/Sanctions subject to change, always check: http://www.treas.gov/offices/enforcement/ofac/

EAR

for 22 Countries

EAR for Group

B Countries

Including India and Israel

Increasingrestrictions

ITARLicense

Required

No License Required

OK for All but Embargoed Countries

Why is THIS so important?Failure to comply with U.S. export control rules can result in

severe penalties both for the individual and the entity• Criminal Penalties1

• Fines: $1,000,000 per violation and imprisonment of up to 10 years in prison.

• Civil• Fines: $250,000 per violation or twice the monetary

amount of the underlying transaction which ever is greater

• (ITAR=$500,000 per violation)• Loss of Export Privileges• Negative publicity1. ITAR, EAR and OFAC all impose criminal and civil penalties although the ranges of the penalties vary.

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Most research and educational collaborations that involve controlled technology are subject to an exclusion or exemption from licensing.

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The most common exclusions from controls/exemption for academic research institutions– Fundamental Research Information Exclusion (ITAR/EAR)– Public Domain/Publicly Available Information Exclusion

(ITAR/EAR)– Educational Information Exclusion (ITAR/EAR)– Full-Time Bona Fide U.S. Higher Education Employee

Information Exemption (ITAR)– These exemptions do NOT apply to encryption software or

to mass market encryption software with symmetric key length exceeding 64-bits

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Research: Fundamental Research Exclusion

Fundamental Research Exclusion applies to information when the research is:

1. Basic or applied2. At an institution of higher learning3. In the U.S. and4. No publication or access controls exist for the

activity

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Research Agreements

Most research conducted in the academic units of most universities is conducted under the Fundamental Research Exclusion.

Note: Research Proposals to Foreign Sponsors require export review.

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University research does not qualify as “fundamental research” if:

• University accepts restrictions on publication of research results (temporary prepublication review allowed for proprietary purposes ~60 days)

• University accepts specific access and dissemination controls in federally-funded research

Research Agreements

Even when the FRE applies:– If there is a Non-Disclosure Agreement in

place for access to technology or information used in the research, the exclusion may not apply to the proprietary information.

– OFAC Sanctions Apply– It may only apply to activities conducted in

the United States*

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Does this proposal need an export review before it is submitted?

Is there a solicitation (BAA, RFP, Program Announcement, etc).

Is the sponsor a foreign entity or person?

Is there a NDA in place between the parties that addresses this specific exchange?

Does the solicitation or proposed contract include:•Publication restriction (including FAR 252.204.7000)•Foreign nationals restriction•Identification as ITAR controlled technology

Is there a proposed contract?

Is there an NDA in place with this sponsor, i.e. will proprietary information be transferred to or from Georgia Tech?

Will unpublished and/or proprietary information be transferred to or from Georgia Tech?

Will the research be performed in the United States?

NO

NO

NO

NO

NO

NO

Submit for denied party and denied entity screening and further processing.

YES

YES

Further processing by Research Compliance and Office of Legal Affairs.

NO

YES

Review export control language in NDA. Is there a restriction on access by foreign nationals?

YES

YES

Propose GT standard NDA; forward to Ask Legal.

NO

YES

YES

NO

Will the sponsor remove the clause or term?

NO

YES

YES

FRE:Proposal may be submitted.

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Research Agreements

The FRE does not apply:– If there is a restriction on publication or public access– If there is a restriction (contractual) on the

participation by foreign nationals in the research– To the exchange of unpublished or proprietary

information that is export controlled to foreign parties, collaborators outside the US

– To the export of tangible goods, biological materials, source code, software…..

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DoD Guidance, aka “John Young Memo”

On May 24, 2010 the DOD Undersecretary for Acquisition issued a new memorandum on Fundamental Research. The memo reinforces an earlier (6/26/08) memorandum on Contracted Fundamental Research and provides additional clarifying guidance. The intention is to assure that DOD fundamental research awards are “fully compliant with National Security Decision Directive (NSDD) 189.”

III. POLICYIt is the policy of this Administration that, to the maximum extent possible, the products of fundamental research remain unrestricted. It is also the policy of this Administration that, where the national security requires control, the mechanism for control of information generated during federally funded fundamental research in science, technology and engineering at colleges, universities and laboratories is classification……No restriction may be placed upon the conduct or reporting of federally funded fundament research that has not received national security classification, except as provided in applicable U.S. Statutes.

Adobe Acrobat Document

Do I need to be concerned about export controls in this contract?

1. Public domain, anda) No equipment, encrypted

software, listed-controlled chemicals, bio-agents or toxins, or other restricted technologies are involved, and

b) Information/software is already published, and

c) There is no contractual restriction on export, or

2. Fundamental Research(note definitions and caveats

associated with this exemption)

1. Equipment or encrypted software is involved, or

2. Technology is not in the public domain, and

3. Technology may be exposed to foreign nations (even on campus) or foreign travel is involved, and

a) The equipment, software or technology is on the Commerce Control List, or

b) Information or instruction is provided about software, technology, or equipment on the CCL, or

c) The foreign nationals are from or the travel is to an embargoed country

4. And the contract has terms e.g. a publication restriction that effect the Fundamental Research Exemption

NO

1. Equipment, software, chemical, bio-agent, or technology is on the US Munitions List (ITAR), or

2. Equipment, software, chemical, bio-agent or technology is designed or modified for military use, use in outer space, or there is reason to know it will be used for or in weapons of mass destruction, or

3. Chemicals, bio-agents or toxins on the Commerce Control List are involved, or

4. The contract contains a restriction on export or access by foreign nationals

YESLicense Will Be Required

Probably(further review is required)

License May Be Required

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What do you do if you cannot document the FRE?

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1. Is it controlled (under ITAR or EAR) and, if so, to where?

2. A technology control plan (TCP) may be required to prevent unauthorized export.

3. A license may be required if an export is contemplated.

Microsoft Office PowerPoint Presentation

Common concerns when accepting a restricted project

• Foreign Nationals may not work on most projects with a TCP.

• Students (including US citizens) may not work on any project ineligible for the Fundamental Research Exclusion (FRE) for their thesis or dissertations.

• Violations & Penalties

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Managing Deemed Exports

Schools, laboratories and PIs are responsible for compliance with deemed export rules and TCPs. – NDA agreements– Software in-licenses that contain export

restrictions, which is used in classroom teaching and/or research

– Materials transfer agreements– Sponsored research– Technology transfer efforts

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When should you seek an export license in order to prepare a proposal

or accept an award?

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• In some circumstances, an overseas activity will not come under a educational or research exception and will involve controlled technology.– An export license will be required prior to the start

of the activity– A Technology Control Plan will be required

Research Agreements

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Information and Contactwww.export.gatech.edu

export@gatech.edu

Jilda Diehl Gartonjilda@gatech.edu

Mary Beranmaryberan@gatech.edu