Export Controls 101

1
Export Controls 101

• Julie Taubman
• Research Compliance Officer (RCO)
• Graduate School and Office of Research and
  Sponsored Programs
• Appalachian State University
• taubmanjl_at_appstate.edu or 828-262-7981
• http//www.orsp.appstate.edu/compliance/export-con
  trols

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Goals of the Presentation

• Understand essential aspects of export controls
• Recognize export control issues
• Contact RCO for assistance
• Become familiar with our export control policy
  and procedures

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Topics to be Discussed

• What is an export?
• What are export controls?
• Exclusions to export controls
• Basics of exporting items and technology
• The end user and the destination country of the
  export
• International Travel
• Penalties for non-compliance
• Red Flags and Questions

4
What is an export?

• A transfer of items, software or technology to a
  foreign person, foreign entity or foreign
  destination.

5
The Definition of Technology

• Technology includes information that can be used
  or adopted for the development, production or use
  of a good. Information can take the form of
  technical data or technical assistance.
• Examples include but are not limited to blue
  prints, sketches, models, drawings, software,
  manuals, training and technical services

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Deemed Export

• A deemed export is an export of technology or
  source code to a foreign person in the U.S.

Examples of a deemed export of technology or
source code Visual inspection of controlled
technology Oral exchange of technical
information Guidance is given on the practice or
application of a technology
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Foreign Person

• The definition of foreign person includes
• any foreign government,
• foreign corporation or organization that is not
  incorporated or organized to do business in the
  U.S., and
• anyone who is not a U.S. citizen or lawful
  permanent resident (a green card holder).

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Examples of exports

• Shipment of physical items outside of U.S.
• Discussion of unpublished research at a
  conference in the U.S. with foreign nationals
  present
• Visit to a lab on campus by a foreign national
  scholar where technical data is displayed
• Participation of foreign nationals in research
• Receiving an email with technical data on a
  foreign nationals computer

9
Export Controls

• Export controls are the set of laws, policies and
  
• regulations that prohibit the unlicensed export
  of
• certain items, technology and software.
• Exports are controlled for various reasons
• Anti-terrorism
• Non-proliferation of weapons
• National security
• Crime control
• Regional stability
• Foreign policy purposes
• Multilateral agreements

10
Export Controls Regulations

• Export Administration Regulations (EAR) for dual
  use items
• Department of Commerce, Bureau of Industry and
  Security (BIS)
• International Traffic in Arms Regulation (ITAR)
  for military items
• Department of State
• Sanction Programs
• Department of Treasury, Office of Foreign Assets
  Control (OFAC)

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Example of a Dual Use Item
Triggered Spark Gaps can be used in both a
medical device that breaks up kidney stones and
as a detonations device for a nuclear weapon.
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Do export controls cover all exports?

• Almost, but there are some exclusions

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Exclusions to Export Controls for Information and
Software

• Public Domain Exclusion
• Published information that is generally
  accessible to the public does not require a
  license
• Education/Teaching Exclusion
• Instruction in science, math and engineering
  courses listed in course catalogues may be
  conducted without a license
• Fundamental Research Exclusion
• Basic and applied research in science and
  engineering conducted in the U.S. where the
  resulting information is ordinarily published and
  shared broadly within the scientific community
  National Security Decision Directive 189

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Fundamental Research Exclusion

• Applies to information and software, not to
  tangible items
• The information or software must be generated
  within the U.S.
• Once it is generated in the U.S., the information
  and software can be disseminated outside of the
  U.S.

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Fundamental Research Exclusion

• The Fundamental Research Exclusion
• does not apply if there are any
• restrictions on publication.
• The EAR permits a brief (90 day) advance
• review by sponsors to
• Prevent divulging proprietary information or
• Insure that publication will not comprise patent
  rights of a sponsor.

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Fundamental Research Exclusion

• Fundamental Research Exclusion does not apply if
  a grant or contract includes clauses that
• Give a sponsor the right to approve publication
  or
• Restrict participation of foreign nationals in
  the research

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Appalachians Export Control Policy

• Appalachian State University will fulfill its
  mission of teaching, research, and service in a
  manner that complies with federal export control
  and embargo regulations, while also ensuring
  reasonable efforts to identify situations in
  which the University may claim exclusions or
  exemptions under public domain or fundamental
  research.

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Appalachian Policy Protecting the Fundamental
Research Exclusion

• If a proposal includes clauses restricting
• access to or publication of research and
  technical data and/or
• limiting participation of foreign nationals in
  research effort
• Researcher and ORSP can work with the General
  Counsel in an attempt to remove or modify the
  restrictive clauses

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Technology Control Plans

• Research that does not qualify for the
  Fundamental Research Exception requires a
  Technology Control Plan
• All relevant materials, items, software or
  hardware, data, or technical information must be
  secured from use and/or observation by foreign
  nationals without an export license
• A template of a Technology Control Plan is
  available on the Export Controls website

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What is an export license?

• An export license is issued by an export agency
  and authorizes an export, reexport or other
  regulated activity as specified on the
  application.

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Exporting Items and Technology

• Determining if an export requires
• an export license
• Who will receive the export?
• What is the export?
• Where is the export going?
• What will they do with the export?

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Appalachian Procedure Restricted Party Screening

• It is illegal to conduct business
• with entities or individuals that
• are barred by the government.
• The recipient of any exchange
• of information, items or
• monies should be screened
• through government
• restricted party lists.
• Submit a Request for Restricted Party Screening

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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.
• Comprehensive sanction programs against Cuba,
  Iran and Sudan
• Limited sanction programs against Burma, North
  Korea and Syria

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Jurisdiction and Classifying an Export

• Submit an Export Assistance Form for Technology
  or Goods to RCO or
• Request classification from a vendor of the item

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Export Control Information from a Vendor
Microsoft Program ECCN LIC
Windows XP Embedded 5D002 ENC
Windows XP Home Edition 5D992.b.1 NLR
Windows XP Professional 5D992.b.1 NLR
Windows XP SP1, SP2 5D992.b.1 NLR
Windows XP SP3 5D992.b.1 NLR
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Determining if an export requires a license

• After classifying the item or technology with
• the Commerce Control List of the EAR, the item
• or technology will have an Export Control
• Classification Number (ECCN) which will list
• The reasons for control
• Designate any specific License Exceptions and
• Provide a List of Items Controlled
• With this information, we can determine if an
• Export license is required by consulting the
• Country Chart

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If an export license is required

• Processing an export license can take up to 6
  months

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Foreign Trade Regulations

• Items that require an export license or are
  valued over 2500 require filing of Electronic
  Export Information (EEI) into the Automated
  Export System (AES) of the Census Bureau
• This provides the export with an International
  Transaction Number (ITN)
• If you have a freight forwarder file for you,
  prior to shipment confirm that they will provide
  you with the ITN

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International Travel

• After you submit your Travel Authorization
• Read the Export Control Briefing. Even if you
  frequently travel internationally and have never
  had a problem, it is a good idea to understand
  export controls to prevent an unintentional
  violation.
• Please obtain Foreign Travel Insurance from the
  Office of International Education and Development.

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Taking A Laptop or Other Item Abroad

• Since export controls apply to items that are
  hand carried abroad, it is important to read the
  Laptop Briefing. In order to take a laptop abroad
  with you, youll need to
• Classify the laptop, software and stored data to
  show it does not need a license or
• For Appalachian owned items, determine if a
  Temporary Export Exception (TMP) applies, and
  submit a One Time Certification
• For personal Items, determine if a Baggage
  Exception (BAG) applies.

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Customs Can Seize Your Laptop

• New York Times (10/24/06) At U.S. Borders,
  Laptops Have No Right to Privacy
• One member who responded to our survey said she
  has been waiting for a year to get her laptop and
  its contents back, said Susan Gurley, the
  groups executive director. She said it was
  randomly seized. And since she hasnt been
  arrested, I assume she was just a regular
  business traveler, not a criminal.
• Appeals are under way in some cases, but the law
  is clear. They Customs dont need probable
  cause to perform these searches under the current
  law. They can do it without suspicion or without
  really revealing their motivations, said Tim
  Kane, a Washington lawyer who is researching the
  matter for corporate clients.

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Example Letter to Customs Certifying the
Temporary License Exception

• Example of a letter from NASA
• DATE
• To CUSTOMS OFFICIALS
• SUBJECT HANDCARRY OF LAPTOP COMPUTER
• 1. The individual named in this letter is a
  ____________________employee carrying a
• (______________________-owned /personally-owned)
  laptop computer authorized
• for temporary export under EAR Licensing
  Exception 740.9(a)(2)(i) TMP Tools
• of the Trade. Software loaded on the laptop is
  authorized for export under NLR.
• Data files on the laptop (do/do not) contain
  technical data as defined by US export
• regulations and (do/do not) require authorization
  for export. The total value of this
• temporary export is under 5000.00
• 2. The following information is provided
• a. Individual Hand Carrying Laptop Computer
  Name/Employee Number
• b. Description of Laptop Computer Make/Model
  Number/Serial Number..

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Penalties for Non-compliance

• Failure to comply with export controls has heavy
  penalties
• Criminal penalties
• 250,00 fine for individuals and/or 10 years
  imprisonment
• 1 million fine for businesses
• Civil penalties
• 250,000 per transaction

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GAO Warns of Possible University Export Control
Violation

• In 2006 GAO study warns that the Departments of
  State and Commerce have not fully assessed the
  potential for transfers of export-controlled
  information to foreign nationals in the course of
  U.S. university research.
• The study urged closer attention to available
  data on foreign students at U.S. universities.

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Recent Export Control Cases

• Dr. J. Reece Roth, former University of Tennessee
  Professor
• Convicted of illegal exporting defense articles
• John Carrington, previous State Senator and
  President of a Fingerprint Lab
• Received 12 months probation and a 850,000
  criminal penalty for the illegal export of crime
  control equipment to China through intermediaries
  in Italy and Hong Kong

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Areas of Particular Concern

• Research in the following areas
• Engineering
• Space sciences
• Computer Science
• Biomedical research with lasers
• Research with encrypted software
• Research with controlled chemicals, biological
  agents, and toxins

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Contracts and Grants

• Shipments of equipment to a foreign country
• Training or collaboration with foreign nationals
• Research activities performed in an embargoed
  country
• Reference to export controlled technologies in an
  award document
• Restrictions on publication rights
• Restrictions on foreign participation

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Red Flags from the EAR

• The customer is reluctant to offer information
  regarding end use.
• The product is incompatible with the technical
  level of the country to which it is being
  shipped, such as semiconductor manufacturing
  technology being shipped to a country that has no
  electronics industry.
• The customer is unfamiliar with the terminology
  of a field but still requests technical data.
• E-mails from domains such as Yahoo, Gmail, etc,
  when it would appear that the requestor should
  have a .edu or business.com e-mail address

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Contacts for export controls assistance

• Julie Taubman, Research Compliance Officer
• Empowered Official Dr. Edelma Huntley, Chief
  Research Officer
• Susan McCracken, Director of Office of Research
  and Sponsored Programs
• Charlotte Smith, Assistant Director of Office of
  Research and Sponsored Programs

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Questions?
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Question Foreign National on a Research Project

• How do export controls apply to a foreign
  student working on a sponsored project?

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Answer Foreign National on a Research Project

• As long as the sponsored project doesnt have
  limitations on the free publication of the
  results and no foreign national or national
  security restrictions, foreign nationals may
  support the fundamental research (basic and
  applied research) of the project.

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Question Suspicious End User

What do you do if you dont know the recipient of
your export well or have suspicions that they may
re-export to another country or another person?
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Answer Suspicious End User

• If you are suspicious about an end user, one way
  to protect yourself and the University is to ask
  them to sign an End-User Certificate.
• A Destination Control Statement may also be
  included with an export to combat re-exports.

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Thanks

• Thanks for coming to Export Controls 101!
• Thanks to NASA Kennedy Space Center for allowing
  us to use their
• letter to Customs for the carrying of a laptop.
• The certification material for laptops is adapted
  from the basic
• design and content of Stanford Universitys
  Export Controls
• Page.  We appreciate Stanford in granting us to
  permission to use its
• content for the benefit of Appalachian State
  University.