Export Control Laws Training Presentation

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Export Control LawsTraining Presentation
The University of North Carolina at Chapel Hill


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Why must we be concerned with Export Control Laws?

• Certain export control laws may apply to UNC
  research activities here and abroad.
• Failure to comply may result in serious criminal
  and civil penalties for both UNC and individual
  researchers
• Federal Government has increased enforcement and
  investigations of universities since 9/11/2001

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What are Export Control Laws?
Export control laws (ECL) are U.S. federal laws
and regulations that regulate the export of
strategically important products, services and
technologies to foreign persons.
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Who/What is a Foreign Person?

• Any foreign government
• Any foreign corporation or organization that is
  not incorporated or organized to do business in
  the U.S.
• Any individual who is not a U.S. citizen or
  lawful permanent resident of the U.S. (green card
  holder)

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What is an Export?

• Transfer of controlled technology, information,
  equipment, software or services to a foreign
  person in the U.S. or abroad by any means. For
  example
• actual shipment outside the US
• visual inspection in or outside the US
• written or oral disclosure

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Recognize Potential Export Control Issue. Seek
Guidance.

• Export control laws are not intuitively obvious.
• All UNC researchers are ultimately responsible
  for their own individual compliance.
• At a minimum, researchers need to know how to
  recognize that an export control issue may exist,
  and then whom to contact at UNC for assistance.
• This presentation is a summary designed to
  provide sufficient information for researchers to
  be able to spot export control issues.
• Contact information for UNC export control
  experts and links to online resources appears at
  the end of this presentation.

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What is the Intent of Export Control Laws?

• Restrict exports of goods and technology that
  could contribute to the military potential of
  adversaries
• Prevent proliferation of weapons of mass
  destruction (nuclear, biological, chemical)
• Prevent terrorism
• Comply with U.S. trade agreements and trade
  sanctions against other nations

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What are the Export Control Laws and their
Federal Agencies?

• State Department International Traffic in Arms
  Regulations (ITAR), which pertain to inherently
  military technologies
• Commerce Department Export Administration
  Regulations (EAR), which pertain to dual use
  technologies (civilian or military use)
• Treasury Department, Office of Foreign Assets
  Control (OFAC) Prohibits certain transactions
  with countries subject to boycotts, trade
  sanctions and embargoes

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International Traffic in Arms Regulations (ITAR)

• Covers controlled technologies of an inherently
  military nature
• Exporters of defense services or related
  technical data are required to register with the
  federal government and may need export licenses.
• List of ITAR controlled technologies (Munitions
  Control List) is available at this website

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ITARs MCL includes equipment with potential
non-military applications

• Example 1 Vaccines, antidotes and medical
  diagnostics specifically designed to protect
  against or counter chemical and biological
  warfare agents
• Example 2 Powerful explosives, propellants and
  incendiary agents (including, e.g., propellants
  having a force constant of more than 1,200 kJ/Kg)
• Example 3 Global Positioning System (GPS) that
  can operate at speeds in excess of 515 m/sec
  (1,000 nautical miles/hours) and at altitudes in
  excess of 18 km (60,000 feet) or designed or
  modified for use with unmanned air vehicles

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Technical Data regulated by ITAR

• Technical Data -- information required for the
  design, development, production, manufacturing,
  assembly, operation, repair, testing, maintenance
  or modifications of defense articles on the MCL
  -- are regulated by ITAR.
• Examples of Technical Data
• Blueprints, drawings, plans, instructions,
  diagrams, photographs.
• Technical Data Exclusion Technical Data does
  not include information concerning general
  scientific, mathematical or engineering
  principles commonly taught at universities or
  information in the public domain.

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Export Administration Regulations (EAR)

• EAR covers equipment, materials and other
  technologies with both commercial and military
  applications, the so called dual use
  technologies (e.g., chemicals, satellites,
  software, computers, etc.)
• EARs list of controlled technologies is called
  the Commodity Control List (CCL) and is available
  at this website

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Office of Foreign Assets Control ("OFAC")
Regulations

• OFAC enforces economic and trade sanctions
  against specific foreign countries, terrorists,
  international narcotics traffickers, and those
  engaged in weapons of mass destruction
  proliferation.
• Countries currently sanctioned are the Balkans,
  Burma, Cuba, Iran, Iraq, Liberia, Libya, North
  Korea, Sudan, Syria, and Zimbabwe.

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Sanctions Programs Enforced by OFAC can be Highly
Restrictive

• Sanctions Programs may restrict
• Payments (compensation, honoraria, contracts) to
  embargoed countries/nationals/entities
• Attendance at/planning of international
  conferences
• Surveys and services to embargoed
  countries/nationals/entities
• Editing or joint authorship of articles with
  nationals of sanctioned countries

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OFAC Enforces Country-Specific Sanctions Programs

• Before traveling to a sanctioned country, or
  trading with or providing services to persons in
  sanctioned countries, individuals must first
  educate themselves on the specific sanctions
  program for that country to determine whether
  such transactions are permitted.
• OFACs website contains up-to-date information on
  each of the sanctions programs
• http//www.treas.gov/offices/enforcement/ofac/

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Potential Impact of Export Control Laws on UNC
Research

• If a UNC research project involves controlled
  technologies, the researcher may be required to
  obtain a government license before
• Equipment, chemicals or technologies subject to
  EAR or ITAR may be sent or taken outside the U.S.
• Foreign researchers or students even if located
  in the U.S. on UNCs campus may participate in
  research involving equipment, chemicals or
  technologies subject to EAR or ITAR (known as a
  deemed export)

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General Rule

• General Rule UNC faculty and employees may not
  send or take export-controlled equipment,
  chemicals or technologies to foreign persons
  without a license from the U.S. Government,
  unless an exclusion applies.
• Fortunately, the majority of research at UNC will
  be covered under an exclusion to the ECL
  requirements.
• What are the exclusions?

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Exclusions from Export Control Laws

• Public Domain Exclusion (ITAR, EAR)
• Education Exclusion (ITAR, EAR)
• Employment Exclusion (ITAR only)
• Fundamental Research Exclusion (ITAR, EAR)

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Public Domain Exclusion

• No license is required to export or transfer
  information and research results that are
  generally available to the interested public
  through
• Libraries, bookstores, or newsstands,
• Trade shows, meetings, seminars in the U.S. open
  to the public,
• Published in certain patent applications, or
• Websites accessible to the public.
• Note the public domain exclusion applies to
  information and research results -- not physical
  equipment, substances, etc.

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Education Exclusion

• No license is required to transfer information to
  students, including students who are foreign
  nationals, concerning general scientific,
  mathematical or engineering principles commonly
  taught in school, colleges or universities.

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Employment Exclusion

• No license is required to share information
  subject to export control laws with a foreign
  national if the foreign national
• is a full-time, bona-fide employee of the
  University
• is not a national of certain countries of
  concern
• has a permanent address in the U.S. while
  employed at the University and
• has been informed in writing not to transfer the
  information to other foreign nationals.

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Fundamental Research Exclusion

• No license is required for fundamental research,
  defined as basic or applied research in science
  or engineering
• at an accredited institution of higher learning
  in the U.S. and
• resulting information is ordinarily published and
  shared broadly in the scientific community.
• Fundamental research is to be distinguished from
  research the results of which are restricted for
  proprietary reasons.

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The Fundamental Research ExclusionIs Destroyed
if

• The University accepts any contract clause in the
  sponsored research contract that
• Gives the sponsor the right to withhold from
  publication information resulting from the
  research
• Forbids the participation of foreign nationals
  or
• Otherwise operates to restrict participation in
  research and/or access to and disclosure of
  research results.

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University Policy is to Protect Fundamental
Research Exclusion

• By refusing to accept research contract
  provisions that
• limit the researchers right to publish or
  present research results (a limited
  prepublication review by sponsor is ok) or
• limit access or participation in the research by
  foreign nationals.

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Export Control Case Study 1

• A marine biologist, in connection with her
  research off the coast of Madagascar, takes with
  her to Madagascar seafloor navigation equipment
  for depths exceeding 1000 m and positioning
  accuracy within 10 m of a given point.
• The Public Domain exclusion applies only to
  information, not to equipment such as the
  seafloor navigation equipment.
• The Fundamental Research exclusion does not
  apply because the research is to be conducted
  abroad. The seafloor navigation equipment with
  the specifications listed is regulated under
  EARs CCL and there is no license exception.

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Export Control Case Study 2

• A computer scientist is working on encryption
  strategies with a graduate student who is a
  Pakistan national and is not a permanent resident
  of the United States.
• Some encryption technologies may not be in the
  public domain and their development may not be
  considered fundamental research under either EAR
  or ITAR.
• The graduate student may be able to qualify for
  ITARs employment exclusion, but EAR has no
  corresponding exclusion. Therefore, sharing the
  encryption technology with the graduate student
  may constitute a deemed export of that
  technology.

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Export Control Case Study 3

• A plant biologist working on genetic control of
  plant development receives funding from a
  corporate sponsor who exercises substantive
  prepublication review. The biologist sends
  samples of puccinia striiformis to colleagues in
  Canada for analysis.
• The public domain exclusion applies only to
  information, not to physical objects such as the
  samples.
• The fundamental research exemption does not
  apply because of the sponsors substantive
  prepublication review. Puccinia striiformis,
  along with several other plant pathogens, is
  listed on the EAR CCL, and there is no applicable
  license exception.

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Applying for and Obtaining an Export Control
License

• The process of determining if a license is
  required takes time.
• After applying for a license, it can take several
  months to obtain a license from the Commerce or
  State Department.
• Contact UNCs EHS Dept with as much lead time as
  possible for help.

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Laptop Baggage Exception for Temporary Export

• Faculty and students who need to take their
  laptops out of the country in connection with
  university fundamental research may do so under
  the baggage exception for temporary export so
  long as
• the country of travel is not under U.S.
  sanctions
• the laptop is a "tool of trade and
• the laptop remains in their possession and
  control at all times.

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Export Control Violations Subject to Severe
Penalties Against Institutions and Individuals

• Penalties for ITAR Violations
• Criminal (Entities) Up to 1M
• Criminal (Individuals) Up to 1M / 10 years
  prison
• Civil Fines Up to 500K and Forfeitures
• Penalties for EAR Violations
• Criminal (Entities) Up to 1M
• Criminal (Individuals) Up to 250K / 10 years
  prison
• Civil Fines 10K - 100K

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Severe Export Control Violation Penalties (cont.)

• Penalties for OFAC violations
• Criminal (Entities) Up to 1M
• Criminal (Individuals) Up to 1M / 10 years
  prison
• Civil Fines 12K - 55K per violation
• Institution also subject to administrative
  penalties
• Termination of export privileges (EAR and ITAR
  and/or
• Suspension and/or debarment from government
  contracting (EAR and ITAR)

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University Contacts for Export Control Questions
and Assistance

• Deb Howard, EHS Industrial Hygienist
• email dmhoward_at_email.unc.edu
• phone [phone]
• Jim Peterson, Dir. Sponsored Research, Assoc. VC
  Research
• email jim_peterson_at_unc.edu
• phone [phone]
• Will Tricomi, Assistant University Counsel
• email will_tricomi_at_unc.edu
• phone [phone]
• Additional UNC Export Control Information located
  at
• http//research.unc.edu/osr/policies/export_contr
  ol.php