INTRODUCTION TORESEARCH SECURITY and

EXPORT CONTROLS

Presented by the Office of Research & Sponsored

Programs

Workshop: December 3, 2004

CREDITS

THE UNIVERSITY OF MARYLANDKindly allowed us to use much of their

information from their website

We supplemented their stuff with general, widely available information from NCURA, COGR, the Departments

of Commerce, State and the U.S. Treasury, and other sources

What are Export Controls?

US laws that regulate the distribution to foreign nationals

and foreign countries of strategically important products,

services and information for reasons of foreign policy and

national security

US Export Controls and Responsible Agencies

• State Department: Inherently military technologies--International Traffic in Arms Regulations (ITAR)

• Commerce Department: “Dual-Use” technologies (primary civil use) -- Export Administration Regulations (EAR)

• Treasury Department, Office of Foreign Assets Control (OFAC): Prohibits transactions with countries subject to boycotts, trade sanctions, embargoes

DEFINITIONS

EXPORT: Any oral, written, electronic or visual disclosure, shipment, transfer or transmission outside the United States to anyone, including a U.S. citizen, of any commodity, technology (information, technical data, or assistance) or software/codes

DEFINITIONS, CONTINUED

DEEMED EXPORT: An export (as defined on previous slide) but to a foreign national (other than a U.S. citizen or permanent resident) inside the United States

TYPES OF (POTENTIALLY) CONTROLLED ACTIVITIES

1. Transfers of controlled information, including technical data, to persons and entities outside the U.S.

2. Shipment of controlled physical items, such as scientific equipment, that require export licenses from the U.S. to a foreign country; and

3. Verbal, written, electronic, and/or visual disclosures of controlled scientific and technical information related to export controlled items to foreign nationals in the U.S.

Dissemination of Information

• Methods of disclosure include – Fax– Telephone discussions– E-mail communications– Computer data disclosure– Face-to-face discussions– Training sessions– Tours which involve visual inspections

AN IMPORTANT NOTE!!

These rules and regulations don’t just apply to SPONSORED PROJECTS.

They apply to everything we do at the University!

WHO IS RESPONSIBLE???THIS MUST BE A TEAM EFFORT

The PI is responsible for recognizing whether the technology/equipment

involved in research may be subject to export controls

Staff in the ORSP will assist in interpreting regulations and will

obtain required licenses

Administrative Penalties

• Termination of export privileges (EAR and ITAR)

• Suspension and/or debarment from government contracting (EAR and ITAR)

Penalties for EAR Violations

Criminal (willful violations): Up to $1 million for the University or

company Up to $250K per violation for

individuals and/or up to 10 years in prison

Civil Up to $12k per violation for

individuals and the University/corporations

Penalties for ITAR Violations

Criminal (willful violations) Up to $1 million for the University or

company Up to $1 million per violation for

individuals and/or up to 10 years in prison

Civil violations: Up to $500k per violation for individuals

and the University or company

Penalties for OFAC violations

• Criminal (willful) violations:– Fine of no more than $1m for companies– Fine of no more than $100k for

individuals (including corporate officers) and/or 10 years imprisonment

• Civil penalties:– Fine up to $55k for each violation by any

person

HOW DO YOU KNOW WHAT IS SUBJECT TO EXPORT

CONTROLS?????

You must read the Regulations and become familiar with the

“lists”

WEBSITES

ITAR: http://www.pmdtc.org/reference.htm

EAR: http://www.access.gpo.gov/bis/ear/ear_data.htm.

OFAC: http://www.treas.gov/offices/enforcement/ofac

EXAMPLES FROM “THE LISTS”

From the EAR:• Materials, Chemicals,

Microorganisms, and Toxins• Materials Processing• Electronics• Computers• Telecommunications and Information

Security

FROM THE EAR, CONT.

• Lasers and Sensors• Navigation and Avionics• Marine (ships & vessels)• Propulsion Systems, Space Vehicles,

and Related Equipment

EXAMPLES FROM “THE LISTS”From the ITAR:Mostly Military-type things, but some notables:• Tanks (ok, so they’re not too notable)• Harbor entrance detection devices• Technical data related to military applications• Underwater Sound Equipment• Radar Systems• Cameras• Self-contained Diving Equipment and Underwater

Breathing Apparatus• Toxicological Agents• Submersible Vessels, manned or unmanned,

tethered or untethered

Implications of Export Laws

• No effect on 90% of university research• But potential impact on

– Ability of foreign students OR visiting professors to participate in research involving a controlled technology (mostly under ITAR)

– Ability to provide services (including training in the use of controlled equipment) to foreign nationals (ITAR, EAR, OFAC)

– Ability to send controlled equipment to foreign countries (ITAR, EAR, and OFAC)

License Requirement for Dissemination of Information Does

Not Apply If

• One of 3 exclusions applies:– Education Exclusion (ITAR, EAR)

– Fundamental Research Exclusion (ITAR, EAR)

– Employment Exclusion (ITAR only)

Education Exclusion

No license is required to share with foreign nationals “information concerning general scientific, mathematical or engineering principles commonly taught in universities or information in the public domain”

• Students using controlled equipment to conduct research should be registered for a research credit class

Fundamental Research Exclusion

No license is required to disclose to foreign nationals information which is “published and which is generally accessible or available to the public [through, for example] fundamental research in science and engineering at universities where the resulting information is ordinarily published and shared broadly in the scientific community.”

The Fundamental Research Exclusion

Is destroyed if the University accepts any contract clause that:

– Forbids the participation of foreign nationals;

– Gives the sponsor a right to approve publications resulting from the research; or

– Otherwise operates to restrict participation in research and/or access to and disclosure of research results

Fundamental Research Exclusion Violation

“Side deals” between a PI and Sponsor destroy the Fundamental Research Exclusion

University Strategy

Protect fundamental research exclusion

by eliminating contractual clauses that destroy our ability to claim the

exclusion

Employment Exclusion

• No license is required to share covered technical data with a foreign national who – Is not a national of certain countries; – Is a full-time, bona fide UM employee;– Has a permanent address in the US while

employed; AND– Is advised in writing not to share covered

technical data with any foreign nationals.

Providing Services to Foreign Nationals

• ITAR and EAR prohibit assisting & training foreign nationals anywhere in the design, development, use, testing etc. of controlled equipment without a license from Commerce or State– Ex. Fermenters having a capacity of at

least 20 liters

Providing Services Under OFAC

• OFAC prohibits the provision of services to countries subject to US sanction programs, boycotts, etc. w/o a license

• Providing services include:– Conducting surveys and interviews in

boycotted countries– Providing marketing & business services

to persons in boycotted countries

Providing Services Cont’d

• Creating new information materials at the behest of persons in a boycotted country

• Engaging the services of persons in a boycotted country to develop new information materials

Countries under Boycotts

• Examples: Cuba, Iran, Iraq, Libya, Liberia, Sudan, Syria, North Korea

• For full, up to date listing, visit OFAC website: http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html

Requirement of a license to ship controlled equipment out

of US

• A license is required to ship equipment controlled by ITAR to any foreign country

• There are few exclusions or exceptions

• It can take months to obtain a license from State.

Shipping Equipment Cont’d

• A license may be required to ship equipment out of the US under the EAR depending on whether the equipment is controlled, where it is being sent and whether an exception applies.

• NOTE: A license may be required to ship software out of the US!

• The process to classify equipment under the EAR is very tedious, detailed and time consuming. Contact ORSP early!

Shipping Equipment Cont’d

• There is a presumption under OFAC laws that any and all shipments of equipment and provision of services to countries subject to US sanctions/boycotts or persons in those countries are ILLEGAL.

• Balkans, Burma, Cuba, Iran, Iraq,Libya, Liberia, Sudan, Syria, Zimbabwe

Laptop Exception

• Excluding embargoed countries, faculty who wish to take their laptops out of the country to use in a university project that qualifies as fundamental research may be able to do so under the license exception for temporary export (TMP) if the laptop meets the requirement for "tools of trade"  and is under control of the UM faculty member (15 CFR Part 740.9).

Accepting Export Controlled Information from Others

• Need a Non-Disclosure Agreement • To be marked Export Controlled• Contact R. Buchannon or T.

Lombardo if receiving such material to determine compliance issues

• May be received by UM U.S. citizen if:– Information is ancillary to and not

actually required for project– The right to publish remains unrestricted

Proposal Stage Red Flag Items

Does the Project involve Shipping equipment to a foreign country? Collaborating with foreign colleagues in foreign

countries? Training foreign nationals in using equipment? Working with a country subject to a US boycott?

Is the RFP marked “Export Controlled”?Is the sponsor demanding pre-approval

rights over publications or the participation of foreign national students ?

If you answer yes…

• A determination must be made by UM as to possible license requirements –

Note 1: If license is needed it takes much time and effort of faculty and can be months in process.

Note 2: These laws apply to all activities – not just sponsored projects

INCREASED SCRUTINY

Given the current emphasis on Homeland Security, the federal government has substantially increased its scrutiny of university compliance with export control regulations.

Additional Scrutiny Includes:

• Increased insistence on specific export control language in contracts and refusal to recognize the fundamental research exclusion

• Insistence on “No Foreign Nationals” clauses

• Increase in random inspections

New Compliance Plans

As a result of increased scrutiny, The University of Mississippi has begun the process of developing a comprehensive compliance plan, to include:

• Training programs for faculty, staff and students

• A submission checklist for PI’s to complete when submitting proposals

• An internal, ORSP, checklist to use in the review process

Already in Place…..

In 1980, the DOD Industrial Security Program was issued to ensure that classified information released to industry is properly safeguarded.

Subsequently, a National Industrial Security Program was established in 1993 to protect and safeguard Federal Government classified information.

This program is administered through the Defense Security Service (DSS)

The program requires that cleared facilities appoint a Facility Security Officer (FSO) responsible for supervising and directing security measures.

UM has had an FSO for many years, but are currently training a new one.

Program regulations currently require that cleared facilities perform training and conduct periodic reviews, BUT they do not ensure that the training and reviews will include unclassified export-controlled technology

At present, it is up to the University to “police itself,” and provide the necessary training and periodic self-assessments

Today is our first attempt to educate and inform. We will be doing more over the next few months!!!!

EXPECTATIONS

• Compliance and understanding at all levels is expected

• Central Point of Contact is essential (actually, we’ll probably have 3 well-trained contacts)

• Licenses may be required

• Perceptions are important– Universities with a commitment to compliance

will fair better than those without!!!