Export Controls 101

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Export Controls 101

• Training modified from the Michigan State
  University document U.S. Export Controls and MSU
  Research Technology Control Plan and Export
  Controls Ignorance is not a Defense by Susan
  Wyatt Sedwick.

Version September 28, 2005
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What is an export?

• Exports are
• the shipment or transfer of goods or items
  (including electronic or digital equipment)
  outside the U.S. or
• the release or sharing of restricted technology
  or data orally or in writing with foreign
  nationals inside or outside the U.S.

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Deemed Exports

• The term export can mean not only technology
  leaving the shores of the United States
  (including transfer to a U.S. citizen abroad) but
  also transmitting the technology to a foreign
  national, an individual other than a U.S. citizen
  or permanent resident, within the United States.
  Such transmission is considered a deemed
  export.

The term foreign national means a person
residing in the U.S. who is not a lawful
permanent resident. This term also refers to and
includes any foreign corporation, business
association, partnership, trust, society, or any
other group not incorporated or organized to do
business in the United States, and any
international organization, foreign government,
or diplomatic entity.
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What are export controls?

• Export controls are federal laws that regulate
  the export of sensitive technologies, equipment,
  software, biological agents, and related data and
  services to anyone, including U.S. citizens, or
  to foreign nationals or representatives of a
  foreign entity on U.S. soil for reasons of
  national security and protection of trade.
• These laws require that licenses be obtained for
  both export and dissemination to some non-U.S.
  citizens of certain items (defense articles and
  restricted technology with military applications).

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Why is it important to be aware of these laws?

• Violations of trade sanctions and export controls
  can result in criminal penalties
• individual and/or institutional fines (up to 1M
  per violation) and
• individual incarceration (up to 10 years per
  violation).

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U.S. Agency Enforcement

• Department of Commerce enforces the Export
  Administration Regulations (EAR)
• Department of State enforces the International
  Traffic in Arms Regulations (ITAR)
• Department of Treasury, Office of Foreign Assets
  Control (OFAC) restricts exports and imports
  through economic sanctions against certain
  countries

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Who at MSU handles export controls?

• Cordell Overby, Senior Assistant Vice President
  for Regulatory Affairs
• Contact Information
• Phone [phone]
• Email overby_at_msu.edu
• Address 204 Olds Hall, East Lansing, MI

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Applicability

• These laws apply to all research activities
  whether or not there is a specific citation to
  the regulations in the grant or contract award
  document governing the project.
• These laws also apply to export-controlled
  information or technology shared with researchers
  by others from government, industry, or other
  universities.

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Applicability

• The majority of university research efforts are
  not restricted by export regulations. However,
  export control may apply when one or more of the
  following concerns pertain to the research
  project
• It has actual or potential military applications
• The destination country, organization, or
  individual is restricted by federal law
• The declared or suspected end use or the end user
  of the export compromises national security
• Economic protection issues are associated with
  the destination country

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What is subject to Export Administration
Regulations (EAR)?

• Transfer and export (including deemed export) of
  so-called dual use technologies relating to
  civilian applications listed on the Commerce
  Control List (CCL).
• Examples
• Global positioning systems
• Cameras
• Optics

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Commerce Control List (EAR)

• Ten Specific Categories
• Nuclear materials, facilities, equipment research
• Chemicals and toxins
• Materials processing, i.e., making plastics,
  metals
• Electronics development
• Computer development and programs
• Telecommunications
• Information security (encryption)
• Sensors and lasers
• Navigation and avionics
• Propulsion systems and space vehicles

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What is subject to International Traffic in Arms
Regulations (ITAR)?

• Transfer and export (including deemed export) of
  technologies relating to military applications
  (including satellite technologies) listed on the
  U.S. Munitions List.
• Examples
• Electronic equipment, systems, or software
  designed for military, security, and intelligence
  applications

• Technical data related to the manufacture or
  production of defense articles
• Classified information security systems,
  cryptographic devices, decryption systems, and
  analog and coding techniques.

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U.S. Munitions List 22 CFR 121

• Firearms
• Artillery projections
• Ammunition
• Launch vehicles, guided missiles, ballistic
  missiles, rockets, torpedoes, bombs mines
• Explosives, propellants incendiary agents
• Vessels of war special naval equipment
• Tanks military vehicles
• Aircraft assoc. equipment
• Military training equipment
• Protective personnel equipment

• Military electronics
• Fire control, range finder, optical guidance
  control equipment
• Auxiliary military equipment
• Toxicological agents equip. radiological
  equip.
• Spacecraft systems equipment
• Nuclear weapons design test equipment
• Submersible vessels, oceanographic associated
  equipment
• Misc. articles

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Export Administration Regulations (EAR)
International Traffic in Arms Regulations (ITAR)

• Export control laws specify countries and
  individuals to which export licenses will be
  denied and exports of defense items or services
  are prohibited in their entirety.
• Denied Persons List (EAR)

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Prohibited Exports and Sales to Certain Countries

• From 22 CFR 126.1
• It is the policy of the United States to deny
  licenses, other approvals, exports and imports of
  defense articles and defense services, destined
  for or originating in certain countries.
• This policy applies to Afghanistan, Armenia,
  Azerbaijan, Belarus, Cuba, Iran, Iraq, Libya,
  North Korea, Syria, Tajikistan, Ukraine, and
  Vietnam.
• This policy also applies to countries with
  respect to which the United States maintains an
  arms embargo (e.g. Burma, China, the Federal
  Republic of Yugoslavia (Serbia and Montenegro),
  Haiti, Liberia, Rwanda, Somalia, Sudan and Zaire)
  or whenever an export would not otherwise be in
  furtherance of world peace and the security and
  foreign policy of the United States.

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More on Deemed Exports

• For an immigrant alien who possesses a green card
  for permanent residence in the U.S. For the
  purposes of export control regulations, such an
  individual is a U.S. person and can be allowed
  access to export controlled information without
  an export license.
• For an MSU employee who is an immigrant alien who
  does not posses a green card for permanent
  residence in the U.S. Only ITAR provides a
  limited exemption to disclose technical data at
  MSU to full-time foreign employees under specific
  conditions. Contact Cordell Overby if this is the
  case.

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Background

• In the early 1980s, the higher education research
  community began discussing with federal officials
  the conflict that export restrictions on academic
  research activities created with the openness
  that typically exists in universities.
  Researchers were concerned that foreign faculty,
  students, and scholars not be singled out for
  restriction from their institutions educational
  and research activities and that publication of
  research results not be restricted.
• The result of these discussions was the National
  Security Decision Directive (NSDD 189) issued in
  1985.

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National Security Decision Directive (NSDD 189)

• This directive clarified the definition of
  fundamental research and stated that fundamental
  research was not subject to the license
  requirements of export control regulations. It
  affirmed the long-standing policy of the U.S.
  government and Department of Defense to not
  restrict publication and public presentation of
  unclassified, federally funded fundamental
  research results.

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Fundamental Research

• Fundamental research is basic or applied research
  in science or engineering at an accredited
  institution of higher learning in the U.S. where
  the resulting information is not restricted in
  the form or content of its release to the public
  and is ordinarily published and shared broadly in
  the scientific community.

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Public Domain

• Information that is published and generally
  accessible or available to the public through
• Sales at newsstands or bookstores
• Subscriptions which are available without
  restriction to any individual who desires to
  obtain or purchase the published information
• Second class mailing privileges granted by the
  U.S. government
• Libraries open to the public or from which the
  public can obtain documents
• Patents available at any patent office
• Unlimited distribution at conference, meeting,
  seminar, trade show or exhibition
• Publication in any form or media after approval
  by the cognizant U.S. government department or
  agency
• Fundamental research

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Publication Fundamental Research

• Access to information must be free or available
  for a fee that does not exceed the cost to
  produce and distribute the material or hold the
  conference (including a reasonable profit).
• The fundamental research exemption does not
  extend to the for-profit sector, which might try
  to impose export controls on a university as a
  subcontractor when the prime contractor is
  required to accept the controls.
• For EAR, published information is information
  that has been, is about to be, or is ordinarily
  published.
• For ITAR, the requirement is that the information
  has been published.

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Michigan State University

• As a public university, Michigan State University
  is committed to the widest possible public
  dissemination of scientific learning and research
  results. This mission is reflected in the formal
  policies of the university and in the operating
  procedures of its laboratories.
• Therefore, all information and data to be created
  or used at MSU must fall under the definition of
  fundamental research as set forth in NSDD 189.

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What actions destroy the fundamental research
qualification?

• University research will not be deemed to qualify
  as fundamental research if
• The university accepts any restrictions on the
  publication of the information resulting from the
  research, other than limited prepublication
  reviews by research sponsors to prevent
  inadvertent divulging of proprietary information
  provided to the research by the sponsor or to
  insure that publication will not compromise
  patent rights of the sponsor or
• The research is federally funded and specific
  access and dissemination controls regarding the
  resulting information have been accepted by the
  university or the researcher.

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MSU Researchers

• If appropriate, researchers should be able to
  explain how their project fits the definition of
  fundamental research and therefore is not subject
  to restriction.

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What does the Office of Foreign Assets Control
(OFAC) enforce?

• Economic sanctions against hostile targets,
  including countries.
• May prohibit travel, payment or providing
  anything of value to the sanctioned country,
  regardless of the fundamental research
  qualification.

• The List of Sanctioned Countries includes (as of
  8-05)
• Balkans
• Burma (Myanmar)
• Cuba
• Iran
• Iraq
• Liberia
• Libya
• North Korea
• Sudan
• Syria
• Zimbabwe

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Questions Researchers Should Consider

• There are a number of questions that researchers
  should consider regarding export controls.

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Questions Researchers Should Consider

• Does the contract or grant restrict publication
  or presentation of research results?
• If YES, further review is needed - contact the
  Office of Regulatory Affairs.

The Office of Regulatory Affairs Phone (517)
432-4500 Fax [phone] Office 204 Olds
Hall, East Lansing, MI 48824
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Questions Researchers Should Consider

• Does the contract or grant limit or prohibit
  foreign nationals from performing work or
  accessing research results?
• If YES, further review is needed - contact the
  Office of Regulatory Affairs.

The Office of Regulatory Affairs Phone (517)
432-4500 Fax [phone] Office 204 Olds
Hall, East Lansing, MI 48824
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Questions Researchers Should Consider

• Does the contract or grant prohibit results or
  deliverables from being disclosed or delivered to
  any country or persons?
• If YES, further review is needed - contact the
  Office of Regulatory Affairs.

The Office of Regulatory Affairs Phone (517)
432-4500 Fax [phone] Office 204 Olds
Hall, East Lansing, MI 48824
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Questions Researchers Should Consider

• Will any information used in the project be
  obtained from a third party subject to
  nondisclosure obligations?
• If YES, further review is needed - contact the
  Office of Regulatory Affairs.

The Office of Regulatory Affairs Phone (517)
432-4500 Fax [phone] Office 204 Olds
Hall, East Lansing, MI 48824
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AND

• Is any equipment or encryption software required
  to be delivered as part of the project?
• If YES, is the equipment or software on an export
  control list?
• If YES, further review is needed contact the
  Office of Regulatory Affairs.

The Office of Regulatory Affairs Phone (517)
432-4500 Fax [phone] Office 204 Olds
Hall, East Lansing, MI 48824