Export Controls: Just the Basics – How to Keep Your Faculty & Researchers Out of Trouble!
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Transcript of Export Controls: Just the Basics – How to Keep Your Faculty & Researchers Out of Trouble!
Kay EllisExport Control [email protected]
520-626-2437
Josh EstavilloUniversity [email protected]
520-621-3175
Export Controls: Just the Basics – How to Keep Your
Faculty & Researchers Out of Trouble!
Overview
Presenters:
Kay Ellis
Josh Estavillo
Export Basics: Terms & Regs
Strategic Technologies
Identifying Red Flags
Travel Abroad
Tips on Staying Compliant
1. EXPORT REGULATIONS2. BASIC TERMS3. SENSITIVE TECHNOLOGIES
Export Alphabet Soup
Why do Universities need to comply with the Export Regulations?
It’s the law
Security around the world changed after 9/11
Consequences of non-compliance can result negative publicity, civil or criminal
violations Violations can range from $250,000 to $1
million per violation or Imprisonment
The export regulations apply to Universities too!
Why does the government control exports?
The government controls certain technologies that it considers to be strategically important for:
National Security Reasons Nuclear Non-Proliferation Reasons Missile Technology Controls Anti-Terrorism Chemical & Biological Controls Regional Stability Crime Control Measures Anti-boycott Reasons Economic Sanctions
Universities in the Media
University of Tennessee Professor Found Guilty on 18 Counts of Export Violations
Satterfield, Jamie. 2008. “Retired UT Prof guilty; case gained national attention.” www.knoxnews.com (accessed on March 22, 2010).
Export 101
Regulations likely to affect your export are . . .
8U.S. Department of State
International Traffic in Arms Regulations (ITAR) - Controls Defense Articles & Defense Services (technical data and know-how) found in the U.S. Munitions List (USML).
For example: Category XV - spacecraft systems, science instruments on spacecraft & associated equipment and software
U.S. Department of Commerce Export Administration Regulations (EAR) - Controls items on
the Commerce Control List (CCL) having a commercial or dual-use (military/strategic and commercial) application
For example: high performance computers and encryption software
Treasury Department Office of Foreign Assets Control (OFAC) - Trade Sanctions,
Embargoes, Restrictions on Transfers to Certain End-Users, Terrorism, Anti-Narcotics
Export . . . When does it occur?
An export is the transfer of export controlled information, commodities or software either inside the U.S. (deemed export) or outside the U.S.
Exports can occur in many ways: Email Mail Agent or broker acting on your behalf – i.e., a Freight
Forwarder Face-to-Face Website Visual inspection that reveals technical data Conference Hand-carried items – laptop, memory devices
Foreign Person is defined as . . .
Technical Assistance . . . “Know-how” . . . Defense Service . . Training
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Technical Assistance (defense service) means the furnishing of assistance (including training) to Foreign Persons . . . in the United States (deemed export) . . . or abroad (technology transfer)
. . . about the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing, or use of an export controlled item -- whether EAR or ITAR controlled.
Technical Data . . . Technology Transfer
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Technical Data or Technology is information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of an export controlled item.
The information can be in the form of blueprints, drawings, models, photographs, plans,
instructions and documentation; tech data includes software related to an export controlled item.
1. COMMERCIAL APPLICATIONS2. SPACE, ROCKETS & MILITARY APPLICATIONS
Sensitive Technologies
“The EAR” (Export Administration Regulations):Commercial & Military Use (Dual-Use)
Commerce Control List Categories
0 = Nuclear materials, facilities and equipment (and miscellaneous items)1 = Materials, Chemicals, Microorganisms and Toxins2 = Materials Processing3 = Electronics4 = Computers5 = Telecommunications and Information Security6 = Sensors and Lasers7 = Navigation and Avionics8 = Marine9 = Propulsion Systems, Space Vehicles, and Related Equipment
“The ITAR” (Int’l Traffic In Arms Regulations):Military, Rockets or Space Applications
USML Categories (The ITAR) I Firearms, Close Assault Weapons and Combat Shotguns II Guns and Armament III Ammunition/Ordnance IV Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and
Mines V Explosives and Energetic Materials, Propellants, Incendiary Agents and Their
Constituents VI Vessels of War and Special Naval Equipment VII Tanks and Military Vehicles VIII Aircraft and Associated Equipment IX Military Training Equipment and Training X Protective Personnel Equipment and Shelters XI Military Electronics XII Fire Control, Range Finder, Optical and Guidance and Control Equipment XIII Auxiliary Military Equipment XIV Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated
Equipment XV Spacecraft Systems and Associated Equipment XVI Nuclear Weapons, Design and Testing Related Items XVII Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated XVIII Directed Energy Weapons XX Submersible Vessels, Oceanographic and Assoc. Equipment XXI Miscellaneous Articles (Software, components, etc.)
Long Reach of the ITAR
ITAR includes
Includes commodities and technologies that have predominant military use or space application;
Items that started out as having civil application but were later adapted or modified for military application;
Dual-Use items that contain or use ITAR controlled articles/technology, i.e., “see through rule”
What’s not export controlled?
Information in the public domain.Information excluded under the Fundamental
Research Exclusion (FRE)Basic marketing and general system
descriptions
Fundamental Research Exclusion in the Regs & Nat’l Policy (NSDD-189)
National Policy re Fundamental Research --NSDD-189
“Fundamental Research means basic and applied research in science and
engineering, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research . . . the results of which ordinarily are restricted for proprietary or
national security reasons.”
Limits to Fundamental Research Exclusion – Subject to Export Controls or Other
Prohibitions
What is a Restricted or Prohibited Party?
Vendor Payments
Payments to entities/persons on the denied lists could result in fines Includes payments to entities in the
U.S. or abroadPayment to foreign entity should raise
a red flag!
IDENTIFYING RED FLAGS IN YOUR PROPOSALS, SOLICITATIONS,
AGREEMENTS
Staying inside the “Safehaven”
Certain restrictions will take you out of FRE:
• Don’t accept publication or access restrictions in Non-disclosure agreements, contracts, agreements, etc.:
Review the Topic, Statement of WorkIs it a Military component for research?Is it a Space-related component for
research? Foreign national participation
Sponsor is a foreign entity or governmentRestrictions on foreign national participationInternational Travel or work being done abroad
Outside FRE: Red Flags
Got Publication or Foreign Person Access Restrictions in your agreement?
Export control language (not all result in restriction)
“Sponsor Approval” vs “Sponsor Review”DFAR clauses and other “flow down”
provisions from a “Prime” agreementReferences to Classified information or
Security Plans
Red Flags in Non-Disclosure Agreements, RFPs, Proposals & Contracts
Determining the need for a license
(Export Controls Review)Questions to Ask:
What is the nationality of researchers INCLUDING Professors and Research Assistants (grad students/post-docs)?
Will the researcher or grad student be receiving restricted information? Is it EAR controlled? Is it ITAR controlled?
Determining the need for a license (Export Controls Review)
Questions to Ask:Is the project strictly defense-related?If it’s ITAR, will the foreign national grad
student need to discuss the data with the sponsor?
Destination: Is the research technology or goods going overseas to a foreign company, government or individual? Does the PI want to take the
technology/equipment/data with him or her?
Determining the need for a license
Steps to Take:
Determine if license is needed for the technology/end user/end use
Determine if license exemption or exception is available
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Do I need to be concerned about export controls in this research?
1. Public domain, and
a) 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. 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
YES
License Will Be Required
Probably(further review is required)
License May Be Required
When to Consider Obtaining an Export License:
Managing export controlled research
Assuming you can’t negotiate out the restrictive clauses - how do you manage the export controlled project?
Determining the need for a license
If no exceptions or exemptions, determine what kind of license is needed -
•EAR•ITAR•OFAC
What next?!
Next steps:Get a license and/orSet up a Technology Control PlanTrain the project personnelAudit the PlanKeep records
License or Technology Control Plan?
In some situations it is possible to put a TCP in place instead of applying for a license
A TCP is simply a plan that outlines the procedures to secure controlled technology (e.g., technical information, data, materials, software, or hardware) from use and observation by unlicensed non-U.S. citizens If this is not possible, then a license or technical
assistance agreement would be needed
When do you need a TCP?
In conjunction with a Technical Assistance Agreement (TAA) – Dept. of State
In conjunction with a Deemed Export license – Dept. of Commerce
In conjunction with an agreement that does not allow foreign nationals
In conjunction with an agreement that involves controlled technology – includes NDAs
Or in conjunction with any project that involves controlled technology!
How to keep your faculty out of trouble!
Travel Abroad
How do the export regulations affect travel abroad for university employees?
Commerce and State have regulations that affect:
Physically taking items with you on a trip such as Laptops, smart phones, PDAs Encryption products on your laptop Data/technology Blueprints, drawings, schematics
Information/data presented at meetings or conferences
Equipment, data, presentations should be vetted for export control issues prior to travel
How do the export regulations affect travel abroad for university employees?
The Office of Foreign Assets Control (OFAC) has regulations that affect:
Money transactions and the exchange of goods and services in certain countries – providing “value”
Travel to sanctioned countries: Balkans, Belarus, Burma, Cote d’Ivoire, Cuba, Democratic
Republic of the Congo, Iran, Iraq, Former Liberian Regime of Charles Taylor, Lebanon, Libya, North Korea, Sudan, Syria, and Zimbabwe
Doing business with certain people or entities Commerce, State, and OFAC have “lists”
What does this mean?The bad news….
A license could be required depending on what you are taking and the country you are traveling to
A technical assistance agreement would be required if you were providing a “defense service” to a foreign person
There are consequences if you violate the regulations!
What does this mean?The good news…
Travel to most countries does not usually constitute an export control problem!
Taking a laptop with only Microsoft Office Suite, Internet Explorer, Adobe, etc. okay to most countries – no license required
In most cases, if you are taking or need to work with export controlled info or equipment abroad, a “License Exception” is available!
Department of Commerce Exception -(TMP) What does it cover?
Temporary “export” of items such as: Laptops with controlled technology and/or data Digital storage devices with controlled
technology and/or data Most software Designs, drawings that are export controlled Other “tools of the trade”
Department of Commerce Exception -(TMP) What is not covered?
The exception does not apply to: Satellite or space-related equipment, components, or
software Exports related to nuclear activities except for a limited
number of countries Technology associated with high-level encryption Iran, Syria, Libya, Cuba, North Korea, or Sudan
Another exception, “BAG” can be used for Syria, Cuba, N. Korea
Can’t take University property to these countries without a license
Anything regulated by the Department of State’s International Traffic in Arms Regulations (ITAR)
Recordkeeping Requirements
State and Commerce require documentation of exceptions and exemptions
Paperwork must be in place before you travelRecords must be kept for five yearsPI/employee should keep a copyCopy for Export Control Officer’s fileCopy for PI’s award file (if applicable)
FINAL THOUGHTS
Tips on Staying Compliant
Develop an Export Compliance Management Plan within your unit
Risk AssessmentStop the Bleeding in Potentially High Risk Areas
Shipping Procurement Sponsored Research projects
Develop “best practices” Technology Control Plans Checklists to review for export issues
Recordkeeping Required to keep records for five years
Tips on How to keep your Faculty Out of Trouble
Before adding a foreign national to a project, did you check to see if there are export control issues? A license could be required and must be in place
prior to work on the projectAcceptance of Export Controlled
information – Know your responsibility: Is the controlled research protected? TCP and/or
license must be in place before work begins Understand the conditions and restrictions of
agreements Did you just agree to export an instrument to China that
requires a license? Did you allocate enough $$ for the duties and fees?
More Tips….
Travel Abroad faculty briefings advisable Exports of export controlled hardware,
technology or software require export compliance review (includes presentations) PRIOR to travel
No Side-deals Make sure all agreed upon terms are included in
the agreement
Export Recordkeeping Requirements – keep for at least 5 years from date of export or
expiration of the license whichever occurs last
Where to get more information
http://www.vpr.arizona.edu/export-control - UA Vice President for Research Export Controls Webpage
http://www.bis.doc.gov/ - Commerce - Bureau of Industry & Security - EAR
http://pmddtc.state.gov/ - State - Directorate of Defense Trade Controls - ITAR
http://www.ustreas.gov/offices/enforcement/ofac/ - Office of Foreign Assets Controls
http://www.cbp.gov/ - Customs and Border Protection