Learning About the Export Control Regulations and How They Apply to Universities

1
Learning About theExport Control Regulationsand
How They Apply to Universities

• This interactive slide show was developed by the
  UNCW Office of Research Services and Sponsored
  Programs, and the UNCW Export Controls Committee.
• August 2007

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2
Export Controls and Universities

• The Good News..
• The majority of UNCW activities (published and
  educational information, fundamental or
  university based research) are generally outside
  the scope of the Export Administration
  Regulations (EAR).
• Even when activities are within the scope of the
  EAR, there are numerous license exceptions that
  may apply.
• Other export regulations that exist deal with
  inherently military items or embargoed countries
  and would rarely apply at UNCW. Therefore, this
  presentation will focus on the EAR.

• The Bad News.
• If an activity IS subject to the EAR and the
  regulations are not followed, the repercussions
  can be serious.
• Violations may be subject to both criminal and
  administrative penalties (fines and jail time).
• In addition, the institution may be penalized by
  not being allowed to receive future funding.

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Export Controls and Research
Fundamental and university based research are
typically excluded from the EAR except for the
following situations

• Any campus activity involving shipping physical
  items abroad may be subject to the EAR.
• If research activities involve teaching or
  training foreign nationals how to use
  controlled equipment, the activities may be
  subject to the EAR. However, the definition of
  use is extremely narrow and would not fit in
  most research (or teaching) settings
• Use is defined as operation, installation
  (incl. on-site), maintenance (checking), repair,
  overhaul AND refurbishing (not or). EAR 772.1
• If the researcher/institution accepts
  restrictions from the sponsor on access to,
  dissemination of, or participation in the
  research, the activities may be subject to export
  controls. Note this condition is not the same
  as prepublication review solely to ensure that
  proprietary information or patent rights are not
  compromised (so long as the review causes no more
  than a temporary delay in publishing the research
  results).

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Do NOT Apply When
Other Campus Activities that are Excluded from
Export Controls are

• Shipping a physical item within the U.S.
• Teaching catalog course material.
• Releasing information at an open conference
  (open meaning all technically qualified members
  of the public may attend and the registration fee
  is reasonably related to cost).
• Teaching/collaborating with U.S. Citizens, green
  card holders or someone with protected person
  status.

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What is an Export?

• An export is an actual shipment of an item
  outside the U.S. Traveling with an item, for
  example a laptop, is still considered exporting
  it.
• Export also includes any release or disclosure
  of any controlled technology, software or
  technical data to any foreign national.
• When that release or disclosure occurs in the US,
  it is referred to as a deemed export because
  the information is deemed to be exported to the
  country of the foreign national during the
  exchange of information.

Please continue to the next slide for more
information on these topics. There you will see
several scenarios that can serve as alerts to
researchers for when export control issues may
arise on campus.
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ALERTS FOR EXPORT CONTROL REGULATIONS Click on
any box for more information about that scenario
Red Flags
I see a clause on a contract for funding that
appears to restrict who can work on this project
or how I can disseminate the research findings.
Sometimes I share information by email with
foreign colleagues.
I want to take a laptop outside the US.
I use GPS equipment outside the US.
I interact a lot on campus with foreign students
and researchers.
Im participating in an international research
trip and need to bring some specialized equipment
with me.
Our lab experiments with or internationally ships
chemicals.
I have a colleague in an embargoed country that I
would like to provide services to.
Our lab experiments with or internationally ships
toxins.
I have been shipping materials to someone in a
foreign country for years but have never checked
to see if the person is a denied entity or if the
materials are controlled.
I would like to invite researchers from other
countries to tour my lab facilities.
My research involves international travel with
marine equipment
Other Options and Information
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Other Options and Information Click on any box to
link to the info you need
UNCW Information
Federal Agency Information
Other Resources
Find out basics about export control regulations
Go to the Export Administration Regulations
Go to the Council on Government Relations
Guidance Document, Export Controls and
Universities Information and Case Studies
Go to the EAR Decision Trees
Get contact information
Go to the Office of Foreign Assets Control Website
Take self-tests for travel with laptops
Check out N.C States Export Controls Website
Find out about other types of exemptions and
exceptions
Go to the International Traffic in Arms Website
Go through Stanfords Export Controls Decision
Tree
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Traveling with GPS

• Export of GPS equipment is regulated under both
  the Export Administration Regulations (EAR) and
  the International Traffic in Arms Regulations
  (ITAR).
• Jurisdiction depends on the capabilities of the
  equipment.
• EAR commercially available GPS is classified as
  ECCN 7A994, and higher performance GPS is
  classified as ECCN 7A005 and 7A105. Both are
  controlled for most countries, but license
  exceptions may apply.
• ITAR Section XV(c) of the ITAR addresses GPS
  equipment that has certain encryption/decryption,
  navigation, and anti-jamming characteristics.
• Please call the regulatory compliance officer if
  you need assistance.

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Export Controls and Laptops

• Laptops are considered controlled commodities.
• While laptops and their associated technology are
  not strictly controlled, most commercially
  available laptops have software applications with
  encryption ability. Encryption software IS
  strictly controlled.
• In addition, if you store controlled technical
  data on your laptop and release the data to a
  foreign national in the U.S. or transfer the data
  abroad, other restrictions may apply to the
  technical data stored on your laptop.

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Export Controls and Laptops, cont.

• You may be subject to export control regulations
  if you travel abroad with this type of
  equipment/data or allow someone in a foreign
  country to receive sourcecode for controlled
  software.
• However, there are certain license exceptions
  that may apply to your situation.
• Please check with the regulatory compliance
  officer for a determination of exception or
  proceed to the next slide for more information
  about license exceptions that apply to laptops.

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Which Exception?
Which Exception Will Work for Me?

• It depends..
• Do you own the item? Are you taking it for your
  use or the use of a family member traveling with
  you? If yes for both, you might qualify for the
  Baggage Exception.
• Does the university own the item and you need it
  for professional activities? If yes for both,
  you might qualify for the Temporary Export
  Exception.
• For laptops, if you cannot maintain effective
  control of the laptop (keep it in your possession
  or in a locked hotel safe at all times) the best
  option for you may be to see if the installed
  software is Already Under License.
• Please check with the regulatory compliance
  officer for a determination of exception, or
  proceed to a self-test.

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License Exception Self-Test 1
A license exception may apply for laptops or GPS
under the baggage provision of the EAR if ALL of
the following are true

• You or a member of your immediate family own the
  item
• You or a member of your immediate family
  traveling with you intend to use the item for
  necessary and appropriate use
• You do not intend to sell or discard the item
  while traveling
• You are not traveling to the following terrorist
  supporting countries Cuba, Iran, North Korea,
  Libya, Sudan, or Syria.

You do not qualify for this license exception
if you cannot check ALL FOUR boxes. If you didnt
pass this self-test please proceed to the next
test or contact the regulatory compliance
officer.
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License Exception Self-Test 2
A license exception for laptops and GPS may apply
under the temporary export provision of the EAR
if ALL of the following are true

• You will return the item to the U.S. as soon as
  practicable but no later than one year from its
  export date
• The item is a tool of the trade because it is a
  usual and reasonable type of tool for use in your
  lawful professional activities
• You will retain effective control over the item
  while abroad by retaining physical possession of
  the item or securing the item in an environment
  such as a hotel safe (NOT just locked in the
  hotel room)
• You will accompany the item abroad, or it will be
  shipped within one month before your departure,
  or at any time after your departure
• You are not exporting the item to Cuba or Sudan.
• You are not using the item for any sensitive
  nuclear activity

You do not qualify for this license exception
if you cannot check ALL SIX boxes. If you didnt
pass this self-test please proceed to the next
test or contact the regulatory compliance
officer.
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Laptop Only Self-Test 3
If everything installed on your laptop is already
under a license for exporting, you can also
export under that license. While this takes a
little legwork, this is more flexible than the
baggage and temporary export exceptions as it
does not require you to own the laptop or
maintain effective control.

• All software installed on the laptop is already
  under license by the software manufacturer(s) for
  exporting. (Most Microsoft and Adobe products
  are already under license to be exported. The
  UNCW Export Control webpage has a link to lists
  of licensed products for Microsoft and Adobe.)
• There is no technical data saved on the laptop
  that might in itself be controlled technology.
  (Check with the regulatory compliance officer to
  determine if any stored data is controlled).
• The laptop itself does not exceed an adjusted
  peak performance (APP) of 0.0015 weighted
  TeraFLOPS (WT).

You do not qualify if you cannot check ALL
THREE boxes. If you didnt pass any of the
self-tests please contact the regulatory
compliance officer.
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Dual-Use Items

• A dual use item is a controlled item that can be
  used both in commercial applications as well as
  military and other strategic uses. Examples are
  lasers, laptops, sonar, radar, GPS equipment and
  many other items.
• Dual use items are controlled by the Export
  Administration Regulations under the jurisdiction
  of the U.S. Department of Commerce. Items that
  are inherently military in nature (specifically
  designed or modified for military use) are
  controlled by the International Traffic in Arms
  Regulations under the jurisdiction of the U.S.
  Department of State
• Exporting dual use items may require a license
  depending on the item, its destination, who the
  end user will be and what they will use if for.
  Some exporting may be restricted entirely if the
  item is to be exported to an embargoed country or
  a denied person/entity.
• Please contact the regulatory compliance officer
  if you have any questions about dual use items.

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Working with Foreign Nationals

• A FOREIGN NATIONAL IS NOT
• A lawful, permanent resident
• A green card holder
• A person who is granted protected person status
  under 8 U.S.C 1324b(a)(3) is excluded from the
  definition of foreign national (political
  refugees and political asylum holders).
• An entity is any federal, state or local
  government entity in the U.S.
• An entity is a foreign corporation, society or
  any other entity or group that is incorporated or
  organized to do business in the U.S.

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Foreign Nationals Cont.
??If the fundamental research exclusion applies,
you may conduct research with the participation
of foreign nationals and you may disseminate the
information inside or outside the U.S. ??

• If the fundamental research exclusion applies for
  the results of the research (results are intended
  for publication, etc.) but controlled technology
  is used by a foreign national during the
  conduct of the fundamental research, you may be
  required to obtain a license in order for foreign
  nationals to work with the controlled technology.
  However, the definition of use in the EAR is
  very narrow and does not apply in most university
  situations.

• If the fundamental research exclusion DOES NOT
  apply, you may be required to obtain a license in
  order for foreign nationals to work with the
  controlled technology.

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Foreign Nationals Cont.

• If your activity is subject to the International
  Traffic in Arms Regulations (ITAR), which may
  occur if the items you are dealing with are
  inherently military in nature, you may be able to
  disclose unclassified technical data in the U.S.
  to a foreign person IF the person is a bona fide
  and full time, regular employee of the
  institution. For this exemption to apply,
• the persons permanent abode throughout the
  employment must be in the U.S.
• The person must not be a national of a country to
  which exports are prohibited in the ITAR, AND
• The institution informs the person in writing
  that the technical data may not be transferred to
  other foreign persons without the prior written
  approval of the Directorate of Defense Trade
  Controls.
• Generally students or some postdoctural
  researchers do not meet the criteria for this
  exemption.
• Please check with the regulatory compliance
  officer to find out if an individual on campus is
  a foreign national, and if so, if any license
  exclusions or exemptions apply.

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Embargoed Countries

• Generally, any transactions with embargoed
  countries will be constrained or prohibited. Very
  little unauthorized (license or license
  exception) activity can happen with these
  destinations. Currently there are 5 (both
  comprehensive and de facto) embargoed countries
  under the EAR Iran, Syria, the Sudan, North
  Korea and Cuba.

• Universities have been cited for providing
  funding to a nonprofit foundation in an embargoed
  country for collaborative activities and for
  providing editing services for authors of
  scientific publications in embargoed countries.

• Please contact the regulatory compliance officer
  if you intend to interact with persons, agents or
  organizations from or representing these
  countries.

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More Information About Embargoed Countries

• In addition to embargoed destinations, there are
  several lists of prohibited end-users. One
  example is the Specially Designated Nationals
  List (administered by OFAC), which includes
  specially designated global terrorists, narcotics
  traffickers, etc. This list also identifies those
  parties that are affected by the USGs targeted
  sanctions programs in countries like Zimbabwe,
  Burma, Belarus, and others. The sanctions are not
  against the whole country, just selected actors.

• Please check with the regulatory compliance
  officer for the current list of embargoed
  countries, as these lists change when foreign
  policy or national security goals change.

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Problematic Clauses

• You may be subject to the export control
  regulations if
• You sign a contract that contains a clause that
  limits your ability to disclose, publish,
  present, or distribute the results.
• The contract/grant prohibits you from using
  foreign nationals on your research team and you
  would like to use a foreign national.
• The contract/grant gives the sponsor unlimited
  rights to the data and the university has no
  ownership.
• There is language in the contract/grant that
  states the project is export controlled.
• Please alert the regulatory compliance officer or
  Director of Sponsored Programs (Pam Whitlock,
  whitlock_at_uncw.edu, 962-3167) if you are uncertain
  about any clause in a contract you are
  considering.

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Deemed Exports

• Deemed exports are transfers of controlled
  information (technology or sourcecode) to foreign
  persons on U.S. soil.
• Information is deemed to be exported to the
  foreign nationals country when it is divulged
  through verbal or written conversation, or
  through visual disclosures (for example, a
  foreign national examining blue prints for
  controlled technology).
• Think of it as transferring know how to foreign
  individuals.
• If you are transferring information resulting
  from fundamental or university based research,
  published information, or educational
  information, your communications are probably
  outside the scope of the Export Administration
  Regulations.
• If you are unsure if your activities are subject
  to the EAR, please contact the regulatory
  compliance officer.

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Denied Persons and Entities

• Numerous lists exist in various agencies for
  individuals or entities that are restricted for
  some reason or another.
• The individual or entity may have violated export
  laws in the past, or might be on some other watch
  list.
• Licenses may be required to conduct transactions
  with individuals or entities on these lists.
• Please alert the regulatory compliance officer if
  you plan to ship an item that might be
  controlled. The RCO will check to make sure you
  are not shipping to a denied person or entity.

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CGTS
What Types of Items and Technologies are Subject?

• Civil Use and Dual Use items and technology
  (laptops, GPS, lasers, radar, sonar, certain
  cameras, some marine equipment, etc.)
• Specifications are in the Commerce Control List
  (Part 774 of the Export Administration
  Regulations). Items are organized into ten
  categories.
• Items that are inherently military in nature
  (weapons, some GPS, defense services, etc.)
  appear on the United Stated Munitions List.
• Certain services may also be subject, such as the
  performance of a defense service.

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More About Defense Services

• Defense services are controlled by the ITAR. The
  term means
• The furnishing of assistance (including training)
  to foreign persons (in the U.S. or abroad) in the
  design, development, engineering, manufacture,
  production, assembly, testing, repair,
  maintenance, modification, operation,
  demilitarization, destruction, processing or use
  of defense articles
• The furnishing to foreign persons of any
  controlled technical data whether in the United
  States or abroad or

3. Military training of foreign units and forces,
regular and irregular, including formal or
informal instruction of foreign persons in the US
or abroad or by correspondence courses,
technical, educational, or information
publications and media of all kinds, training
aid, orientation, training exercise, and military
advice.
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Agencies
Agencies that Administer Export Control
Regulations

• Department of Commerce (think Trade Protection)
• Administers the Export Administration Regulations
  (EAR)
• Concerned with civil use and dual use items
• The items on the EAR are not inherently military
  in nature, but could have military applications.
• Items are listed in ten categories in the
  Commerce Control List in the EAR (Part 774)

• Department of State (think National Security)
• Administers the International Traffic in Arms
  Regulations (ITAR)
• Concerned with items that are inherently military
  in nature
• Also restricts defense services

• Department of Treasury (think Embargoes)
• Oversees the Office of Foreign Assets Control
• Enforces economic trade sanctions based on U.S.
  foreign policy and national security goals.

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Other Exemptions and Exceptions
Other EEEs

• Educational Information Exclusion
• Educational information released by instruction
  in catalog courses or general scientific,
  mathematical, or engineering principles commonly
  taught in colleges and universities is outside
  the scope of the Export Administration
  Regulations.
• Bona Fide Employee Exemption
• This exemption only applies if the technology is
  subject to the ITAR regulations and a foreign
  national is working with the technology. It is
  discussed in more detail in another slide.
• Exceptions Applicable to Laptops and GPS
• When faculty travel abroad with a laptop or GPS,
  they could be subject to export control
  regulations unless one of the EAR license
  exceptions apply. Go to the Laptop or GPS
  section for more information.
• Other License Exceptions
• The EAR lists numerous exceptions that must be
  considered on a case-by-case basis, depending on
  the type of item/technology and the destination.

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Controlled Technologies

• Part 774 of the Export Administration Regulations
  contains hundreds of pages of controlled
  technologies, separated into the following
  categories
• 0 Nuclear Materials, Facilities, and Equipment
  and misc. items
• 1 Materials, Chemicals, Microorganisms, and
  Toxins
• 2 Materials Processing
• 3 Electronics
• 4 Computers
• 5 Telecommunications (Part 1) and Information
  Security (Part 2)
• 6 Sensors and Lasers
• 7 Navigation and Avionics
• 8 Marine
• 9 Propulsion Systems, Space Vehicles and
  Related Equipment

• All other goods and technology that do not fit
  into one of the ten categories listed above are
  included in a catch all category called EAR99.
  Licenses are generally not required for items
  that fall into this category.

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Am I Subject to the EAR?
N O T S U B J E C T T O T H E E A R
Am I involved in an activity related to the
proliferation of chemical or biological weapons,
nuclear explosive devices or missiles, or
technical assistance with respect to
encryption? See Section 734.5(a), (b), and (c)
S U B J E C T T O T H E E A R
YES
NO
Is the item I am planning to export or reexport
subject to the exclusive jurisdiction of another
U.S. Government Federal Department or
Agency? (Such as OFAC, ITAR, Dept of Energy,
Patent and Trademark Office) See Section
734.3(b)(1)
YES
Adapted from Supplement No. 2 to Part 732 of the
EAR
NO
Does my export or reexport consist of prerecorded
phonograph records, printed books, pamphlets
miscellaneous publications as described in the
EAR? (Like childrens books, periodicals, globes,
advertising) See Section 734.3(b)(2)
YES
NO
Is the technology or software I am planning to
export or reexport publicly available (excluding
encryption items like the source code in
laptops)? See Section 734.3(b)(3)
YES
NO
Is my item in the United States - or - outside
the U.S. but of U.S. origin? See Section
734.3(a)(1) and (2)
YES
NO
Does my foreign-made item incorporate controlled
U.S. origin items that exceed the de minimis
limits defined in section 734.4 or Supplement No.
2 to part 734 of the EAR, or is it ineligible for
de minimis? See Section 734.3(a)(3)
YES
NO
Is the foreign-made item a direct product of the
U.S. origin technology or software, as described
in section 736.2(b)(3) of the EAR, and the
destination is Cuba, Libya, or a destination in
Country Group D1? See Section 734.3(a)(4) and (5)
YES
NO
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Im subject to the EAR. Do I need to apply for a
license?
Is my item classified under an Export Control
Classification Number (ECCN) on the Commerce
Control List (CCL)?
YES
NO
Item falls under EAR 99
Note the ECCN
Adapted from Supplement No. 1 to Part 732 of the
EAR
YES
YES
Do General Prohibitions 4 10 apply? (See
736.2(b)(4 10))
NO
NO
Is there an X in the box when you cross
reference the Commerce Country Chart and the
Commerce Control List? See Supp. No. 1 to Part
738 Supp. No. 1 to Part 774)
No License Required (NLR) See Section
732.5(a)(1)(ii) 758.1(a)(3)
NO
YES
Is a License Exception Available? See Part 740
including 740.2 restrictions that apply to all
license exceptions
Use License Exception See 740.1
YES
NO
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Submit an application for a license See Part 748
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Examples of Controlled ItemsNuclear Etc.
Category 0
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 0 for
a complete list of controlled items.
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Examples of Controlled Items Chemicals
Category 1
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 1 for
a complete list of controlled chemicals.
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Examples of Controlled ItemsToxins Category 1
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 1 for
a complete list of controlled toxins.
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Examples of Controlled ItemsElectronics
Category 3
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 3 for
a complete list of controlled electronics.
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Examples of Controlled ItemsSensors and Lasers
Category 6
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 6 for
a complete list of controlled sensors and lasers.
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Examples of Controlled ItemsMarine Category 8
PLEASE NOTE This is just a small selection of
controlled items to be used for illustration
purposes only. Please see the CCL Category 8 for
a complete list of controlled marine items.
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Who to call for more information

• Leanne Prete
• Regulatory Compliance Officer
• Office of Research Services and Sponsored
  Programs
• 910-962-7774
• pretel_at_uncw.edu

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