Export Control Laws Training Presentation

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

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

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.

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)

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

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.

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

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

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

ITAR’s 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

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.

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.) • EAR’s list of controlled technologies is called the Commodity Control List (CCL) and is available at this website

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.

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

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. • OFAC’s website contains up-to-date information on each of the sanctions programs • http://www.treas.gov/offices/enforcement/ofac/

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 UNC’s campus – may participate in research involving equipment, chemicals or technologies subject to EAR or ITAR (known as a “deemed export”)

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?

Exclusions from Export Control Laws • Public Domain Exclusion (ITAR, EAR) • Education Exclusion (ITAR, EAR) • Employment Exclusion (ITAR only) • Fundamental Research Exclusion (ITAR, EAR)

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.

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.

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.

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.

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.

University Policy is to Protect Fundamental Research Exclusion • By refusing to accept research contract provisions that: • limit the researcher’s 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.

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 EAR’s CCL and there is no license exception.

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 ITAR’s 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.

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 sponsor’s substantive prepublication review. Puccinia striiformis, along with several other plant pathogens, is listed on the EAR CCL, and there is no applicable license exception.

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 UNC’s EHS Dep’t with as much lead time as possible for help.

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.

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

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)

University Contacts for Export Control Questions and Assistance: • Deb Howard, EHS Industrial Hygienist • email: dmhoward@email.unc.edu • phone: 962-5722 • Jim Peterson, Dir. Sponsored Research, Assoc. VC Research • email: jim_peterson@unc.edu • phone: 966-2542 • Will Tricomi, Assistant University Counsel • email: will_tricomi@unc.edu • phone: 843-5329 • Additional UNC Export Control Information located at: http://research.unc.edu/osr/policies/export_control.php

Export Control Laws Training Presentation