Fundamentals of Export Controls Regulations

1. Fundamentals of Export Controls Regulations Office of Research Compliance Emory University

2. What are Export Control Regulations? A group of federal regulations designed to advance the national security, foreign policy, and economic interests of the United States • These regulations have been around in some form for over 40 years • They have become subject of increased focus since 9/11 • These rules regulate payments, transfer or shipment of goods, and transmission of sensitive information to foreign governments and persons • Regulatory schemes may require a license prior to engaging in certain export activities Office of Research Compliance Emory University

3. Why do these regulations matter to us? Universities engage in a number of activities that can implicate export controls regulations, including: • Multi-national research collaborations • Hosting foreign nationals as visiting scholars and researchers • International shipment of research equipment and transmission of technological information • Foreign travel Office of Research Compliance Emory University

4. And, another reason these regulations matter to us……Former Professor Convicted in National-Security Casehttp://chronicle.com/weekly/v55/i03/03a02102.htm From the issue dated September 12, 2008 By ALLIE GRASGREEN In a case that could have implications for universities doing militarily sensitive research, a former professor was convicted last week of violating national-security laws. After a weeklong trial in U.S. District Court in Knoxville, Tenn., the jury found J. Reece Roth, a retired professor of electrical and computer engineering at the University of Tennessee at Knoxville, guilty of conspiracy, fraud, and violations of the Arms Export Control Act. The law prohibits disclosing sensitive technology to foreign countries. He faces up to 160 years in prison and more than $1.5-million in fines. Mr. Roth was accused of passing sensitive information to two research assistants who were foreign nationals — one from China and the other from Iran — and of illegally carrying the information on his laptop computer and disclosing some of it in lectures abroad. At the time, he worked for a company on a contract to study the use of plasma technology on military aircraft. He has said he thought the federal law did not apply to his research because he had not proved that the technology worked, and because the information he is accused of sharing in his lectures in China had already been made public in journals or at scientific meetings. A. William Mackie, an assistant U.S. attorney, told The Chronicle the government was not trying to threaten scientific researchers' academic freedom. But he also predicted that academic institutions would have a "heightened sense of attention to the fact that universities play an important role in defense research projects, all of which have national-security concerns Office of Research Compliance Emory University

5. Federal Agencies that regulate Exports • U.S. Department of State – Directorate of Defense Trade Controls (“DDTC”) • U.S. Department of Treasury – Office of Foreign Assets Control (“OFAC”) • U.S. Department of Commerce – Bureau of Industry and Security (“BIS”) • U.S. Patent and Trademark Office • Bureau of the Census • U.S. Department of Homeland Security Office of Research Compliance Emory University

6. REGULATIONS THAT HAVE THE MOST IMPACT ON HIGHER EDUCATION U.S. Department of State – Directorate of Defense Trade Controls • International Traffic in Arms Regulations (ITAR) • Items on United States Munitions List (“USML”) • Defense articles and technologies, e.g., missile, space, and laser technologies, chemical and biological agents and delivery systems, software • Controls based primarily on whether an article or service is deemed to be military in character • Includes technical services assistance, including design, engineering and use of defense articles that are controlled Office of Research Compliance Emory University

7. REGULATIONS THAT HAVE THE MOST IMPACT ON HIGHER EDUCATION U.S. Department of Treasury – Office of Foreign Assets Control (“OFAC”) OFAC administers and enforces economic and trade sanctions against targeted: • Foreign governments (e.g., Iran, Cuba, Sudan, etc.) • Complete list available at http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml • Individuals (e.g., known and suspected terrorists, narcotics traffickers) • Entities (e.g., charities linked to terrorist groups, drug front organizations) • Practices (e.g., proliferation of WMD, trade in non-certified rough diamonds) Office of Research Compliance Emory University

8. Office of Foreign Assets Controls (OFAC) - continued OFAC regulations prohibit trade and financial transactions with • Embargoed foreign governments • Embargoed foreign organizations and companies, and • Foreign nationals who are on an OFAC “Specially Designated Nationals” list (“SDN” list) • Financial transactions with foreign governments, companies, and individuals should be screened against OFAC lists • Includes purchases of equipment, payment of honoraria, etc. Office of Research Compliance Emory University

9. REGULATIONS THAT HAVE THE MOST IMPACT ON HIGHER EDUCATION U.S. Department of Commerce – Bureau of Industry and Security (“BIS”) • Export Administration Regulations (“EAR”) • Includes Commerce Control List (“CCN”) • Export Controls Classification Numbers (“ECCN”) • Responsible for issuance of export licenses when required Office of Research Compliance Emory University

10. Department of Commerce - Bureau of Industry and SecurityExport Administration Regulations (“EAR”)15CFR Parts 730-774 Regulate the export of “Dual Use” items • Items that have both commercial and military or proliferation applications Such items are considered “subject to the EAR” Office of Research Compliance Emory University

11. What does “subject to the EAR” mean? Means items are under the regulatory jurisdiction of the EAR (Part 734) - • Includes all “items” in the United States, except: • Publicly available technology and software (EXCLUDING encryption technology) • Items subject to the exclusive jurisdiction of another Federal Department or Agency • Publications that are artistic or non-technical in nature Office of Research Compliance Emory University

12. Definition of “Items” ITEMS– May consist of tangible things, such as equipment or hardware, but also includes technology, in the form of: • INFORMATION – “Technical Data” such as models, formulae, engineering designs, or “Technical Assistance” such as training or instruction. • Very concerned about encryption technology. • SOFTWARE – Computer programs or microprograms in either “Source Code” (programming statements) or “Object Code” (machine-readable instructions) Office of Research Compliance Emory University

13. What constitutes an “export” under these regulations? An export is an actual shipment or transmission of itemsoutside of the United States Office of Research Compliance Emory University

14. Exports (continued) Export of items to foreign countries requires an analysis of whether the item is subject to a license requirement • License requirement can be triggered by academic travel that includes shipping or taking along research equipment that is “subject to the EAR” • License requirement is dependent upon the item’s classification under the EAR and its destination country

15. Exports (continued) • Remember, electronictransmission of items subject to the EAR (such as technical information) outside of the U.S. can trigger for license requirement, e.g., sharing technology information via Email outside of U.S. • Again, license requirement is dependent upon the item’s classification, the destination country, intended end use, and/or end user • Most exports WILL NOT require a license Office of Research Compliance Emory University

16. Deemed Exports • There is another type of export under this regulatory scheme that is very significant to higher education – this is known as a “Deemed Export” • Deemed exports occur INSIDE of the United States Office of Research Compliance Emory University

17. What is a Deemed Export? “A transfer or ‘release’ of information or technology, subject to the EAR (including source or object code), to a foreign national in the United States” The transfer or release of information is “deemed” to be an export to thehome country of the foreign national Office of Research Compliance Emory University

18. Deemed Exports (continued) • A deemed export may occur through an oral or written (including electronic) transmission of information, or through visual inspection • Includes Email, telephone, websites, laboratory tours, foreign national research collaborations occurring in the U.S. • This is a very challenging export controls compliance issue for higher education Office of Research Compliance Emory University

19. The Deemed Export RegulationsDONOT Apply To: • U.S. citizens, including naturalized U.S. citizens • Permanent residents (“Green Card” holders) • Individuals granted legal status as political refugees or political asylum holders And, there are certain “exclusions” from these regulations that often apply…. Office of Research Compliance Emory University

20. EXCLUSIONS FROM DEEMED EXPORT REGULATIONS • Information that is publicly available (EAR 734.7) • Generally accessible to the interested public • Found in periodicals, books, print, electronic and other media forms • Found in Libraries • Shared at open conferences • Educational Information (EAR 734.9) • Released by instruction in catalog courses or through associated teaching laboratories of academic institutions • Patent Information (EAR 734.10) • Information available through published patents • Fundamental Research (EAR 734.8) • Veryimportant exclusion for higher education Office of Research Compliance Emory University

21. Fundamental Research Exclusion • What is fundamental research? “Basic and applied research in science and engineering when the resulting information is ordinarily published and broadly shared within the scientific community” • A large portion of academic research conducted in the United States is covered by this exclusion Office of Research Compliance Emory University

22. What is NOT Fundamental Research? • Research that is “proprietary”, i.e., restricts publication and other forms of sharing research results • Industrial development, design, production, and product utilization • Such activities usually restrict dissemination of research results for proprietary or national security reasons • Another important reason to resist publication restrictions in research agreements; publication restrictions can destroy the Fundamental Research exclusion Office of Research Compliance Emory University

23. Will an Export License be Required? Export of items “subject to the EAR” may require a license from the Bureau of Industry and Security (Department of Commerce) depending upon the sensitivity of the information or technology at issue, the destination country, and the proposed end use and/or end user A substantial portion of items that are “subject to the EAR” are classified as “EAR 99” and usually will not require a license in order to export except to OFAC embargoed countries, or for prohibited uses and/or end users In fact, MOST exports WILL NOT require a license, but the analysis must be conducted and documented NOTE: Exports (including “deemed exports”) to Cuba, Iran, North Korea, Syria and Sudan will likely require a license if there is no available exemption and they do meet the requirements for an exception Office of Research Compliance Emory University

24. Sequence of Analysis for Deemed Exports1. Begin at bottom of pyramid - determine if the first category applies to your deemed export situation. 2. If not, move up to next category. Keep moving up the pyramid to find a category that applies to your export. If one of the categories on the black portion of the pyramid applies, it is likely that no license is required. 3. Contact your Unit’s designated individual for confirmation that no license is required or for assistance with License Exceptions and Licensing. Office of Research Compliance Emory University

25. Emory Contacts for Help with Export Controls Questions Unit Designated Individual Phone E-mail Address Emory College:Teresa Sussman- Director, College Grants Management x7-0749 teresa.sussman@emory.edu Office of EnvironmentalHealth & Safety: Diane Kusek - Compliance Documentation Officer x7-590 diane.kusek@emory.edu Office of Finance: Purchasing Loette King - Vice President, Finance x7-0909 loette.king@emory.edu Controller Stephen Frangis - Director, Fiscal Accountability x7-7290 stephen.frangis@emory.edu Office of Technology Transfer: Shannon Walker - Material Transfer Agreement Specialist x2-1185 shannon.walker@emory.edu Rollins School of Public Health: Shelle Bryant - Project Coordinator, Emory Ctr/Aids Research x7-9437 shelle.bryant@emory.edu School of Medicine:Josh Barwick -Associate Dean, Administration x2-9793 joshua.barwick@emory.edu Yerkes Primate Research Center: Martha Walsh - Chief Financial Officer x7-8513 martha.walsh@emory.edu Office of Sponsored Programs: Please try to contact your assigned OSP Analyst first x7-2503 (OSP main) Holly Sommers - Associate Director x7-2507 holly.sommers@emory.edu If there is no “Designated Individual” listed for your Unit, or for any other assistance with Export Controls, please call: Office of Research Compliance: Doris Kirby - Associate Director x7-2516 doris.kirby@emory.edu Christine Cramer - Research Compliance Specialist x7-2398 ccrame2@emory.edu Office of Research Compliance Emory University