Export Controls: An Overview

1
Export Controls An Overview
The University of Florida acknowledges and
appreciates Virginia Tech for granting UF
permission to use, and alter their presentation
on Export Controls for Virginia Tech Faculty and
Principal Investigators July 2010 Version
2
What are Export Controls?

• US laws that regulate the distribution to foreign
  nationals and foreign countries of strategically
  important technology, services and information
  for reasons of foreign policy and national
  security.

3
What is an Export?

• Transfer of controlled technology, information,
  equipment, software or services to another
  country or to a foreign person in the US.
• An export to a foreign person in the US is
  considered a deemed export.

4
Why Does UF Care About Export Controls?

• The unauthorized transfer of export controlled
  items to foreign persons or transactions with
  sanctioned countries, individuals or entities may
  violate Export Control Laws.

5
Responsible Agencies

• State Department
• International Traffic in Arms Regulations (ITAR)
  
• Commerce Department
• Export Administration Regulations (EAR)
• Treasury Department
• Office of Foreign Assets Control (OFAC)
• Other Agencies
• DOE, NRC, DHS, Customs

6
The Good, The Bad and The Ugly

• In general export controls have little or no
  impact on most university research
• May place restrictions on research and/or require
  a license, unless an exclusion applies
• Violations lead to administrative, civil and
  criminal penalties

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The Good (Activities not Subject to EC)

• Fundamental Research
• Employment Exclusion (ITAR only)
• Educational Information
• Public Domain/Publicly Available Information
• Humanitarian/Informational
• National Security Controls

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Fundamental Research Exclusion

• Fundamental research means basic and applied
  research in science and engineering, the results
  of which ordinarily are published and shared
  broadly within the scientific community, as
  distinguished from proprietary research and from
  industrial development, design, production and
  product utilization the results of which
  ordinarily are restricted for proprietary or
  national security reasons.
• per NSDD 189

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Employment Exclusion

• Applies when a foreign person is a full-time,
  bona fide university employee with a permanent
  address in the US while employed.

10
Education Exclusion

• Applies when the information in question consists
  of general scientific, mathematical or
  engineering principles commonly taught in
  universities or information that is in the public
  domain.

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Public Domain/Publicly Available Information

• Applies when the information is already in the
  public domain and does not have restrictions on
  who may access.

12
Humanitarian/Informational

• Humanitarian Projects (OFAC)
• Country specific restrictions.
• Information and Informational Materials
• Books, movies, music, etc. in being at time
  of transaction.

13
National Security

• If the project is funded by the US Federal
  Government and there are security controls in
  place the project is not subject to export
  controls as long as the parties comply with the
  specific security controls.

14
The Bad (Activities Subject to EC)

• Many university activities are subject to export
  controls and the exclusions may not always apply.
• Proprietary Research
• Development
• Use Technology
• International Projects
• Defense Services
• Prohibited Activities

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Penalties for Export Control Violation

• Administrative penalties
• Monetary fines
• Jail time

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Administrative penalties

• Termination of export privileges
• Suspension and/or debarment from government
  contracting

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Monetary fines Criminal Violations

• EAR
• Up to 1M per violation for a university or
  company
• Up to 1M per violation for individuals
• ITAR
• Up to 1M per violation for a university or
  company
• Up to 1M per violation violation for individuals
  
• OFAC
• Up to 1M per violation for University or company
  
• Up to 1M per violation for individuals

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Monetary fines Civil Violations

• EAR
• Up to 250K or 2x the value of the transaction
  that led to the violation, whichever is greater.
  This is per violation and applies to individuals,
  university or company
• ITAR
• Up to 500k per violation for individuals,
  university or company
• OFAC
• Up to 250K or 2x the value of the transaction
  that led to the violation, whichever is greater.
  This is per violation and applies to individuals,
  university or company

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Jail time

• EAR
• Up to 20 years per violation
• ITAR
• Up to 20 years per violation
• OFAC
• Up to 20 years per violation

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Whos Who in Export Controls at UF

• Empowered Official
• Dr. Tom Walsh, Director Sponsored Research and
  Compliance [phone]
• Export Control Legal Liaison
• Amy Hass, Assistant General Counsel
• [phone]
• DSR Export Control Contact
• Brandi Boniface, Assistant Director
• [phone]
• Mike Scian, Assistant Director of Compliance
• [phone]

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DSR Export Control Strategy

• Minimize the number of awards subject to export
  control
• Ensure that cost of security for a sponsored
  project is borne by the Sponsor
• Adequately protect those awards that have export
  control restrictions to prevent violations.

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UF Process (Step 1)

• Proposal Review Identifying Items of Concern
• Publication or Foreign national restrictions.
• Proprietary/controlled information, materials or
  equipment provided by sponsor or third party.
• International shipping of materials or equipment.
• Sponsor is DoD, NASA, DOE, DHS, or a commercial
  entity.
• Funding agreement has language specifying project
  is controlled and/or sponsor confirms project is
  subject to export controls.
• Scope involves areas of concern (i.e.,
  satellites, UAVs, AUVs, weapons, pathogens,
  explosives, detectors, military systems, space
  technologies, toxins, etc).

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UF Process (Step 2)

• Technical Review
• DSR and PI review project together in context of
  the export control regulations
• PI and DSR discuss project identifying and
  resolving any questions or concerns related to
  export control
• PI and/or DSR contact the Sponsor if appropriate
  for further clarification
• Once all items have been addressed DSR completes
  the review and makes the final determination on
  whether or not the project is subject to export
  controls

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UF Process (Step 3)

• Export Control Applies
• PI signs certification that project will not
  commence until export control actions are
  finalized.
• PI and DSR develop appropriate Technology Control
  Plan (TCP) specific to the project. EHS, UF IT
  Security and general counsel will assist in this
  process as needed.
• TCP is finalized and signed by PI, Chair/Director
  and/or Dean as appropriate. All UF persons
  working on the project (paid or unpaid) sign the
  two attachments.
• All persons on the project (paid or unpaid)
  attend mandatory export control session.
• Once TCP is fully executed and training complete
  the funding can be released and the project can
  commence.

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My Project is Subject to EC, Now What?

• Actions Required for Your Sponsored Project
• All persons working on the project must attend an
  export control training session
• A Technology Control Plan (TCP) must be developed
  and executed
• All persons on the project are aware of their
  obligations and comply with all conditions
• PI monitors project to ensure compliance with TCP
  (including training and updates)
• Coordinate with DSR and General Counsel

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The Technology Control Plan

• Technology Control Plan contains the following
  elements
• Institutional Commitment
• Commodity Jurisdiction and Classification
• Physical Security Plan
• Information Security Plan
• Personnel Screening/Training Policy
• Self-Assessment

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Managing the Export Controlled Project

• What can trigger an export control review?
• What if an export control violation occurs?
• What if I am contacted by an enforcement agency?

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What Can Trigger an EC Review

• Change of project scope
• Change of project personnel/parties (e.g.,
  subcontractors, grad students)
• Foreign travel
• Visiting foreign scientists/others
• Shipping export controlled equipment, materials
  or software overseas without a license or other
  required approval
• Notification of a potential export control
  violation

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What if an EC Violation Occurs

• Remove foreign persons/foreign nationals from
  access
• Secure the export control restricted commodity,
  software, technology or technical data
• Contact DSR

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What if I am Contacted by an Enforcement Agency?

• Ask to see the Agents badge of authority
• Cooperate with the Agent
• Determine if the Security Officer has been
  notified, if not, direct the Agent to the
  Security Officer
• Cindy Holmes [phone]
• Contact DSR
• If Possible ask that any interview or discussion
  be conducted with Security Officer and DSR

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Future Trends

• More export control restrictions
• Export Control Reform
• State, Commerce and DoD New guidance and
  policies
• China-specific restrictions for many items under
  EAR
• More projects that will be considered export
  control restricted
• Audits by enforcement agencies

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Export Control Glossary

• CCL Commerce Control List
• EAR Export Administration Regulations
  Department of Commerce/dual use
  technologies
• ECCN Export Control Classification Number
• ITAR International Trafficking in Arms
  Regulations Department of State/Military
  Technology and Defense Services
• OFAC Office of Financial Assets Control
  Department of the Treasury/Financial
  Dealings with Sanctioned/Embargoed Countries
• TCP Technology Control Plan
• USML United States Munitions List

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Government Resources

• State Department (ITAR)
• http//www.pmddtc.state.gov
• Commerce Department (EAR)
• http//www.bis.doc.gov/
• Treasury (OFAC)
• http//www.treas.gov/offices/enforcement/ofac/
• OIG Report on Deemed Exports http//www.oig.doc.go
  v/oig/reports/2004/BIS-IPE-16176-03-2004.pdf

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Organization Websites

• Council on Governmental Relations
  http//www.cogr.edu
• Association of American Universities
  http//www.aau.edu
• SRA International http//www.srainternational.org/
  sra03/index.cfm
• NCURA
  http//www.ncura.edu/
• Society for International Affairs
• http//www.siaed.org

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Closing

• Questions
• Contact Information
• Brandi Kay Boniface, MIBS, CRA Amy Hass
• Assistant Director for Research Assistant
  General Counsel
• University of Florida University of Florida
• 401 Grinter Hall 123 Tigert Hall
• Gainesville, FL 32611 Gainesville, FL
  32611-3157
• [phone] [phone]
• Boniface_at_ufl.edu Amhass_at_ufl.edu
• http//www.research.ufl.edu/research/compliance.ht
  mlconduct