EXPORT CONTROL BASICS How Export Control Impacts on Research and Education

1
EXPORT CONTROL BASICSHow Export Control Impacts
on Research and Education

Sreekant Murthy, Ph.D. Chief Research Compliance
Officer Rowan University
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Overview Topics to be Covered

• The Basics Exports, Deemed Exports, Definitions
• The Export Control Regulatory Framework --
• ITAR, EAR and OFAC
• Exclusions
• Penalties
• Application to University Research and education.
• Export Control for Researchers

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What is Export Control?

• Federal laws to protect items, technical data and
  information important to the U.S.
• U.S. laws and their implementing regulations
  prohibit the unauthorized export of certain
  controlled ITEMS, INFORMATION OR SOFTWARE to
  foreign persons or entities in the U.S. and
  abroad.
• These laws have been in place over 20 years.
  However, they have become more prominent since
  9/11.
• Export control laws apply to all activities not
  just sponsored research projects

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Export Control Regulations What do they control?

• EC regulations control the shipment or transfer,
  by any means of controlled items, software,
  technology, or services out of US.
• EC regulations also restricts the release of
  certain information to foreign nationals here and
  abroad. This is called deemed export.
• EC regulations my impose severe restrictions on
  the way the our faculty and students conduct
  research, which may impede international
  collaborations in certain research areas and
  especially research collaborations with
  restricted (embargoed) countries.
• Noncompliance results in both monetary and
  criminal penalties against the individuals as
  well as the university.
• Noncompliance may also results in reputational
  and financial harms to the university.

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Importance of Export Control Compliance Due
Diligence

• Export Control Regulations have far-reaching
  implications on everyday University activities.
• Many units (administrative, academic, research)
  of the University are affected.
• Compliance with regulations requires a
  university-wide oversight program.
• Non-compliance with regulations places the
  University and its personnel at risk of fines
  and/or imprisonment.

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Governments Concern

• Open access/publication of scientific and
  technological results may provide unwitting
  assistance to nations or terrorist groups in
  developing weapons.
• Protecting economic interests of U.S. companies.
• Protecting U.S. national security and foreign
  policy interests by
• Denying our adversaries the means to advance
  their military potential
• Implementing foreign policy objectives
• Preventing terrorism
• Inhibiting the proliferation of Weapons of Mass
  Destruction (nuclear, biological, chemical)
• Fulfilling Multilateral Obligations (i.e. UN
  Sanctions, Trade Agreements)

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What is Affected?

• All items/technology in the U.S. except
• Publicly available technology software.
• Publications that are artistic or non-technical
  in nature.
• Items/technology located outside of the U.S.
• Items of U.S. origin wherever located.
• Foreign made items if it exceeds certain U.S.
  content or direct product of U.S. technology

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Regulatory Framework

• This is a complicated network of federal agencies
  and interrelated regulations that govern exports
  collectively referred to as Export Controls.
• International Traffic in Arms Regulations (ITAR)
  are administered by Department of State
• Controls Defense related items.
• Export Administration Regulations (EAR) are
  administered by Department of Commerce.
• Controls most other items.
• Numerous other regulatory agencies control
  exports such as Department of Treasury (money),
  DOE (Nucs), DOJ (drugs), USDA (seeds), CDC-USDA
  (Biological agents).
• Office of Foreign Assets Controls OFAC.
• The Department of the Treasurys Office of
  Foreign Assets Controls (OFAC) administers
  economic sanctions programs with regard to a
  number of countries, using asset blocking and
  trade restrictions to accomplish US foreign
  policy and national security goals. OFAC
  periodically updates this list.
• (http//www.treasury.gov/about/organizational-stru
  cture/offices/Pages/Office-of-Foreign-Assets-Contr
  ol.aspx.)

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General Provisions

• Prohibits certain exports, reexports and other
  conduct without a license, license exception or
  determination that no license is required.
• A license is a pre-approval to export (ITAR
  EAR).
• Usually valid for 4 years
• Applies to a specific item to a specific country.
• In the end, few items covered by EAR need a
  licensehowever, they must go through process to
  make the determination and be able to defend
  decision.
• A Technical Assistance Agreement (TAA) (ITAR) is
  an agreement for the performance of a defense
  service or the disclosure of technical data.
  Rowan University will most likely use this option
  to get foreign researchers approved. A TAA does
  not authorize unrestricted publication-only an
  approval for the listed foreign person to work on
  the specific project.

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Challenges

• EAR is not as simple as just looking at the
  nationality.
• Very dependent upon the specific technologysome
  countries can receive some items.
• Time factor in determining requirements and then
  applying for and receiving licenses-could be as
  long as 90-120 daysdepending on outside agency
  review.
• ITAR is simpler in that it considers all foreign
  nationals equally as dangerous, however,
  specific technology is still a major
  consideration.

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Activities Triggering Export Control Issues

• They include the following
• Military or Defense Articles and Services
• High Performance Computing
• Dual Use Technologies (technologies with both a
  military and commercial application)
• Encryption Technology
• Missiles Missile Technology
• Chemical/Biological Weapons
• Nuclear Technology
• Select Agents Toxins (see Select Agent/Toxin
  list)
• Space Technology Satellites
• Medical Lasers
• Travelling
• With high tech equipment, confidential,
  unpublished or proprietary information or data
• Laptops, web-enabled mobile devices and other
  personal equipment
• Shipping or takin items overseas
• Sponsored classified research with restricted
  access to the research by foreign nationals

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Points to Consider

• Export control laws apply whether or not there is
  a specific reference in the award document.
• Applies not only to the PI and assigned
  researchers-need to consider where information is
  accessible (labs/computers) control of
  information from other foreign persons.

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Additional Considerations

• Technology Control Management Plans (TCP)
• Outlines how the controlled technology will be
  handled/secured to prevent access by unapproved
  foreign persons. Will be required even if there
  are no foreign persons assigned to the project.
• Addresses physical security of labs other work
  areas as well as security of data on computer
  networks (Information Security).

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Discussion Items

• Publication restrictions and impact on Graduate
  students/PIs working on project.
• Administrative process/burden
• TAAs and Technology Control Plans are time
  consuming to prepare.
• Requires additional interaction between PI and
  sponsor to determine what technology is
  controlled.
• Approval process by Federal Govt can take 8-10
  weeks.
• Security of labs/work areas/computers network

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Recommended Actions

• Develop Rowans policy for dealing with export
  provisions
• Outline responsibility of Office Research (OR)
  Administrators and PIs/Departments.
• Put more burden on PIs and the sponsor to assist
  with identification of technology.
• Process will involve several offices such as OR,
  PIs, Departments, Research Deans, Associate Deans
  and possibly General Counsel.
• Post policies training materials on web site.
• Educate OR, Research Deans and Depts. on general
  guidelines of EAR/ITAR and Rowan University
  policy.

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Common Acronyms

• BIS Bureau of Industry and Security
• BIS Mission Advance U.S. national security,
  foreign policy, and economic objectives by
  ensuring an effective export control and treaty
  compliance system and promoting continued U.S.
  strategic technology leadership. Maintains denied
  persons list, boycott list, and technology
  evaluation (OTE)
• ECCN Export control Classification Number
• Five digit alpha numeric number for export
  control classification used in CCL
• CCL Commerce Control List
• List of items divided into ten broad categories
  and five product groups under each of the broad
  categories.
• ITAR International Traffic in Arms Regulation
• EAR - Export Administration Regulations
• OFAC Office of Foreign Assets Control
• TAA -Technical Assistance Agreement (ITAR)
• TCP Technology Control Plan
• A technology control plan (TCP) stipulates how a
  company will control its technology. The plan
  establishes procedures to protect classified,
  proprietary, and export-controlled information
  to control access by foreign visitors and to
  control access by employees who are non-U.S.
  persons.
• TTCP Technology Transfer Control Plan
• USML- United States Munition List

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US Munition List

• The United States Munitions List (USML) is a list
  of articles, services, and related technology
  designated as defense- and space-related by the
  United States federal government. This
  designation is pursuant to sections 38 and 47(7)
  of the Arms Export Control Act (22 U.S.C. 2778
  and 2794(7)). These articles fall under the
  export and temporary import jurisdiction of the
  Department of State.
• There are 20 categories of articles on the USML.

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U.S. Munitions List (Part 121)

• Categories
• I- Firearms, Close Assault Weapons, Combat
  Shotguns
• II- Guns 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

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U.S. Munitions List (Part 121)

• X. Personnel Protective Equipment
• 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
• XIX . Submersible Vessels, Oceanographic and
  Associated Equipment
• XX- Miscellaneous

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EAR Categories (Dual Use)

1. Nuclear Materials, Facilities Equipment
   Miscellaneous Materials, Chemicals,
   Microorganisms and Toxins
2. Materials Processing
3. Electronics Design, Development and Production
4. Computers
5. Telecommunications Information Security
6. Sensors and Lasers
7. Navigation and Avionics
8. Marine (ships vessels)
9. Propulsion Systems, Space Vehicles and Related
   Equipment

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Examples of EAR Controlled Technologies

• Batteries and Fuel Cells
• Cameras and Optics Equipment
• Artificial Intelligence Software
• Certain Computer Equipment
• Items using Laser Technology
• Certain Chemicals, Microorganisms and Toxins
• The list depends on interplay of type of item,
  reason for export control and destination country
• This list is large and a bit cumbersome to manage
• There is an index that helps you navigate to the
  right place within the CCL by identifying the
  ECCN (export control classification number

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Examples of ITAR Controlled Technologies and Items

• Explosives
• Rocket Systems
• Military Training Equipment
• Spacecraft and Satellite Equipment (even if not
  for military use)
• Toxicological Agents and Equipment
• Biological Agents
• Radiological Equipment (including nuclear
  radiation detection and measurement devices)
• Defense Services

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EAR Embargoes

• U.S. Embargoes
• Cuba most stringent embargo
• Iran comprehensive trade and investments
• Sudan comprehensive
• Syria general order
• U.N. Embargoes (arms embargoes)
• Iraq
• Rwanda
• Russia

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ITAR Prohibited Countries

• Arms Embargoes Cuba, Iran, North Korea, and
  Syria
• Belarus, Burma, China, Eritrea, Sudan, Venezuela,
  and Vietnam
• Denial Policy with Exceptions
• Afghanistan, Cote d'Ivoire (Ivory Coast),
  Cyprus, Fiji, Haiti, Iraq, Lebanon, Liberia,
  Libya, Rwanda, Republic of the Congo, Somalia,
  Sri Lanka, Yemen and Zimbabwe.

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Export Control Exclusions

• Includes the following
• Fundamental Research (ITAR and EAR)
• Educational Exemption (ITAR only)
• Employment Exemption (ITAR Only)
• Public Domain
• A license is not required if one of the above
  exclusions applies.

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Fundamental Research Exclusions and Reasons for
loss of Fundamental Research Exclusions

• Fundamental Exclusions include
• Basic and applied research
• May include foreign nationals
• There can be no restrictions on access by
  students or others
• No restriction on publication
• Research carried out openly
• Results are intended to be shared broadly in the
  scientific community
• This Allows unrestricted access to research and
  free interchange of information, recognizes the
  open campus culture and environment and Supports
  compliance with U.S. export control regulations.
  Information in the Public Domain is not
  controlled.
• Reasons for Loss of Exclusion
• The university accepts any contract clause that
• Forbids the participation of foreign persons
• 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.
• There are side deals between the PI and the
  sponsor

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Education Exclusion

• The ITAR provides that information concerning
  general scientific, mathematical or engineering
  principles commonly taught in schools, colleges
  and universities, is not included in the
  definition of technical data subject to the ITAR
  120.10(a)(5).
• Excludes technology or materials.
• EAR excludes education information released by
  instruction in catalog courses and associated
  teaching laboratories
• The EAR education exclusion does not extend to
  the release of information in research labs not
  associated with catalog courses.
• You do not need a license to share information as
  part of a course.
• You can train foreign nationals on how to use
  most otherwise - controlled equipment that is
  part of a class or class laboratory.

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Employment Exclusions

• No license is required to share controlled
  technical information with a foreign person who
• is a full-time, bona fide university employee
• has a permanent address in the US while employed
  provided that person is
• not a national of certain countries and
• is advised in writing not to share controlled
  information with other foreign persons.

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Export Control How does it Affect Researchers?

• Researchers may be affected by export controls
  if
• They teach courses online courses
• They perform research on campus or elsewhere.
• They plan to travel outside the United States to
  attend conferences and make presentations.
• They may be interacting with foreign national.
• They may need to ship items, software or
  information internationally.
• They need to be careful by not violating a
  sanction or embargo when they, or the institution
  make payments for purchased items, services, or
  reimburse expenses.
• They are required to fully comply with
  institutions EC policies and all U.S. export
  control laws and regulations.

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Why do researchers need to know about Export
Control?

• Researchers are at the front line of export
  control issues because
• They have control over the scope of the research
  project
• They are the ones who make the decision regarding
  equipment or technology which will be implemented
  and to whom it may need to be transferred
• Because researchers have ultimate control of the
  research project, their input is critical to help
  contract administrators evaluate technical
  aspects of export control issues

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Questions to Consider for Researchers

• What is the technology?
• Must know the specifics-will require help of PI
  and/or sponsor.
• Who is going to be working on project?
• What nationality and status?
• Certain countries are embargoed by both agencies
  Cuba, Libya, Sudan, Iran, Iraq
• Where is the work going to be accomplished?
• On/off Rowan property?
• If in Rowan University offices/labs-who has
  access?
• Rowan has developed a checklist for researchers
  to verify whether research is EC-regulated

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What should Faculty Know About EC?

• International Travel
• Shipping
• Attending Conferences
• Presenting in Conferences
• Travel Restrictions
• Deemed Export
• Embargoed Countries list
• Applicable Research
• Self Checklist
• Faculty Assistance

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International Travel Restrictions - What
Researchers Can Take?

• When they leave the country, everything you take
  is an export, including devices, software, and
  data.
• They cannot take ITAR-controlled articles,
  technical data, or software (which the ITAR
  considers to be technical data) without a license
  from the State Department. Tangible items
  developed through fundamental research which was
  excluded from export controls are still subject
  to the ITAR.
• To be clear if they have ITAR-controlled
  technical data, such as a document or drawing, on
  your laptop, you cannot take it out of the US,
  even if you have no intent to transfer the items
  to a non-US person.
• In most cases, US and non-US persons can take
  EAR-controlled items and software, including your
  laptop and PDA, using EAR license exception TMP
  (Temporary exports) or BAG (Baggage) can use the
  exceptions to take EAR items and software.

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International Travel Restrictions -What
Researchers Can Take (Continued)?

• US persons can use the exceptions to take
  EAR-controlled technology, but this does not
  authorize its transfer to someone not otherwise
  authorized to receive it.
• To be clear these exceptions dont authorize a
  non-US person to take EAR-controlled technology
  out of the US, even if it has been transferred to
  them as an acceptable deemed export
• Continue to Using TMP (Temporary Imports, Exports
  and Re-exports) or BAG (Baggage) exceptions.
• Remember that destination countries have their
  own import and export controls (see Travel.State.
  Gov), which may affect how researchers can use
  items while there and what you can take out of
  the destination country.

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Attending Conferences

• The EAR considers information released at an
  open conference, meeting, seminar, trade show,
  or other open gathering to be published, and so
  excluded from EAR control. ?
• Open means that all technically qualified
  members of the public are eligible to attend and
  attendees are permitted to take notes or
  otherwise make a personal record (not necessarily
  a recording) of the proceedings and
  presentations.
• An open conference can charge a registration
  fee reasonably related to cost, and can limit
  actual attendance, as long as attendees either
  are the first who have applied or are selected on
  the basis of relevant scientific or technical
  competence, experience, or responsibility.

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Attending and Presenting at Conferences

• The ITAR considers information released through
  unlimited distribution at a conference, meeting,
  seminar, trade show or exhibition, generally
  accessible to the public, in the United States to
  be in the public domain, and so excluded from
  ITAR control.
• Researchers can consider information you receive
  at an open conference to be publicly available
  information, excluded from export controls.
• Researchers can deliver or present the results of
  your fundamental research or other information in
  the EAR and ITAR scope at open conferences.
• Outside the US, researchers can deliver or
  present the following information in the ITAR
  scope
• General systems description ( such as top-level
  drawings, top-level narrative descriptions or
  summaries of performance requirements, key
  subsystems, top-level block diagrams, top-level
  description of operational modes, top-level
  equipment layout drawings, and top-level
  predictions of power usage or consumption), since
  this is not considered ITAR technical data (ITAR
  120.10(a)(5)).
• Public domain information, such as published
  research results or material previously released
  in a university course, at conferences or
  meetings outside the US.

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International TravelRestrictions on Where you
can go

• Check the U S Department of the Treasury, Office
  of Foreign Assets Control web site for a list of
  Embargoed Countries.
• Check the University Travel Policy.
• If you decide to travel to an embargoed country,
  you must sign Rowans travel form before
  departure, acknowledging the risk and personal
  responsibility for the decision to travel.
• There may be other restrictions that may need to
  be followed. Please check with Office of
  Research to obtain further information on
  International Travel.

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International TravelRestrictions on What you can
do When you Get there

• While US sanctions programs and restrictions on
  transactions with specific parties always apply,
  the likelihood of being affected by them
  increases when youre outside the US.
• Cuba, Iran, North Korea, (North Sudan) and Syria
  are subject to strict controls. If you will be
  working with nationals of these countries, you
  should be familiar with both.
• Working with China entities and nationals can be
  complicated by US policy toward China, which
  includes both enthusiastic support for commercial
  transactions and strong aversion to support of
  the Chinese military. Some apparently benign
  China institutions are considered by the US
  government to be closely related to the military,
  resulting in restrictions on transactions with
  them.
• OFACs Specially Designated Nationals and Blocked
  Persons List and the Commerce Departments Entity
  List are the most relevant, but the government
  maintains a total of 35 lists with various
  restrictions. You can check most of these using
  the National Export Initiatives consolidated
  list, or consult Rowans Export Control Officer.

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International Shipping

• International shipping is also subject to
  numerous export and import controls and
  regulations. Fines, confiscation, or
  incarceration can all result from failing to
  comply.
• Most things, and some software information, are
  export-controlled to some degree.
• Some items are hazardous, and need to be packaged
  and labeled appropriately. Contact Rowans EHS
  for further information.
• The shipment (Export and Import) can be delayed
  or incur unexpected costs if the paperwork is
  wrong or incomplete.
• All imported shipments are cleared by U.S.
  Customs, with varying levels of scrutiny. Some
  items that are hazardous may be restricted.

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Key Issues for University Research

• Deemed Exports
• The obligation to obtain an export license from
  BIS before releasing controlled technology to a
  foreign person is informally referred to as a
  deemed export. Release of controlled technology
  to foreign persons in the U.S. are "deemed" to be
  an export to the persons country or countries of
  nationality and is found in 734.2(b) of the EAR.
• Scope of Fundamental Research Exclusion
• Foreign National restrictions in contracts
• Government-sponsored research covered by national
  security contract controls
• ITAR defense articles and defense services,
  especially in space research and, increasingly,
  in life sciences and nanotechnology research
• The application of OFAC sanctions to
  university-sponsored or related activities

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Examples of common universitydeemed export risk
areas

1. Equipment material purchase, usage disposal
2. Research agreements
3. International agreements
4. Material transfer agreements
5. Nondisclosure agreements
6. Software and other intellectual property licenses
7. International travel
8. Select biological agents
9. Contractual services agreements
10. Affiliates programs

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Examples of Applicable Research

• Electrical engineering, integrated circuits,
  encrypted software, advanced
• telecommunications
• Applied physics ex. lasers and other equipment
• Nanotechnology and new materials ex. composites
  and ceramics
• Life Sciences and Chemicals (including academic
  medical centers and health sciences centers)
• Optics and imaging
• Detection of toxic chemical aerosols
• Plasma and biomedical research with lasers
• Research with controlled chemicals, biological
• agents, and toxins
• Biological samples
• Crop dusting, aerosol dissemination
• Tangible products of fundamental research
  (prototypes, materials, some software) are not
  excluded. These items may require authorization
  for export from the US.
• Note The intellectual product of fundamental
  research (publishable results) is excluded from
  export controls.

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What university areas are affectedby Export
Control Regulations?

• Engineering
• Medicine
• Nursing
• Pharmacology
• Sciences, et al.
• Education and Training
• Computing and Information Technology
• Technology/Material Transfer

• Grants and Contracts
• General Counsel
• International Study Programs
• Purchasing
• Shipping and Receiving
• Environmental Health and Safety
• International Collaborations

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Questions to Ask Yourself

• Does the research involve any of the EAR
  categories?
• Does the research involve any item on the ITAR
  Munitions List?
• Does the research involve technology or devices
  designed for use in military, security and
  intelligence applications?
• Does the research involve anything else wit a
  substantial or dual-use military application?

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Export Control Review Process

• Assistance is available for
• Preliminary Evaluation
• Review proposals in the scientific areas of the
  greatest risk for export control issues
• Red Flags
• Encryption Software
• Technology/Equipment on Commerce Control List
  (EAR) OR the Munitions List (ITAR)
• Sanctioned Countries
• Foreign Nationals/Travel
• Proprietary Information

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Assistance for Export Controlled Technology

• If your technology is export controlled,
  assistance is available to Determine
• The correct classification and reason(s) for
  control
• If a license is required to the intended
  destination and/or recipient
• Checking for an available license exception or
  exclusion
• Checking the lists of restricted/debarred
  individuals and institutions denied export
  privileges and
• Applying for a license, if necessary
• Contact Information
• Office of Research and Sponsored Programs
• James Hall
• 200 Mullica Hill Road
• Glassboro, NJ 08028

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Rowans Commitment for Export Control

• Creating processes charged with monitoring export
  compliance
• Appointing an export compliance official to
  oversee the export compliance program
• Implementing a process for screening
  third-parties (Visual Compliance)
• Addressing record keeping requirements
• Establishing a procedure for employees to report
  suspected violations and
• Providing a means for investigating potential
  violations and when necessary, reporting them to
  appropriate government agencies.

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Consequences of Non-Compliance

• Failure to comply with U.S. export control laws
  can result in severe penalties to individuals as
  well as the university
• Civil penalties up to 500,000 each violation
• Criminal penalties up to 1,000,000 each
  violation
• Imprisonment up to 10 years.