Export Control Nuts & Bolts

1. Export Control Nuts & Bolts What you need to know if you AREN'T the export compliance officer

2. Who we are Janet SimonsDirector, Research Policy and Export Control OfficerUniversity of Maryland Baltimore Jill MortaliDirector, Office of Sponsored ProjectsDartmouth College

3. U.S. Export Control Regulations • Federal regulations designed to advance the national security, foreign policy and economic interests of the United States • Regulate physical shipments as well as transmission of information regarding specified controlled technologies/technical data • Regulate exports to foreign nationals/foreign organizations whether they are “across the border” or in the United States

4. How Export Controls Work • You plan to send or disclose a controlled item, technology or information to a non-U.S. person • Consult regulations • Type and specifications of controlled item • Purpose of use • Destination country • Destination person • Exclusion or exception applies; no general prohibition applies … OR … • A license application is required and submitted for U.S. government review and approval

5. For compliance, • We need to understand • What information, technology or technical data may be involved • Who will receive the information, technology or technical data (individuals and entities) • Who will benefit from certain services provided • We need to ensure that the awards that fund research allow unrestricted publication of results

6. Foreign Persons (Foreign Nationals) • A person in the U.S. in non-immigrant status • Visa-holders, including H-1B, H-3, L-1, J-1, F-1, O-1 • A person unlawfully in the U.S. • A business or other entity not incorporated in the U.S. or a foreign government • Individuals (including U.S. citizens) who represent these entities • For export purposes, U.S. nationals are: • U.S. citizens • U.S. Permanent Residents (Green Card) • U.S. Asylum Grantees and Refugees (limited time period)

7. Sanctions and Restricted Parties • The U.S. government may apply economic boycotts, trade embargoes or other actions against specific countries and/or specific activities (such as terrorism or trafficking) • Primarily administered by the Department of the Treasury, Office of Foreign Assets Control (OFAC) http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx • The Departments of State, Commerce and Treasury maintain lists of individuals and entities denied export privileges and/or who are barred from financial and other transactions for reasons related to U.S. security, foreign policy or economics • Consolidated screening list http://export.gov/ecr/eg_main_023148.asp

8. Export Control Regulations • Department of State: Arms Export Control Act • International Traffic in Arms Regulations (ITAR) • Covers military- and space-related technologies • U.S. Munitions List 22 CFR Part 121 http://www.pmddtc.state.gov/regulations_laws/documents/official_itar/ITAR_Part_121.pdf • Department of Commerce: Export Administration Act • Export Administration Regulations (EAR) • Covers commercial technologies • Covers “dual use” technologies (i.e., commercial + military proliferation applications) • Commerce Control List 15 CFR Part 774 http://www.bis.doc.gov/policiesandregulations/ear/index.htm

9. Exclusions/exemptions • Most research and teaching that takes place in the U.S. on campus can qualify for exclusions and/or exemptions

10. Fundamental Research Exclusion • Applies to research data and information • Applies to research performed on campus here in the U.S. and only if there are no restrictions on publication or dissemination of the research results • Does NOT apply to • Physical goods • Encryption software • Research where there is no intention to publish the results • Research conducted outside of the United States

11. Full Time Employee Exemption • Applies only under ITAR • Applies to release of unclassified information to a non-U.S. person who is a full-time, bona-fide employee, with a permanent abode in the U.S. during employment, provided the institution informs the employee in writing of export control restrictions • Applies to technical data only, not assistance (e.g. training) or materials (e.g. controlled equipment, chemicals, and similar)

12. Registered Student Exclusion • Applies to educational information released by instruction in catalog courses and associated teaching laboratories • Applies to courses available globally on-line (“distance learning”) - but not to OFAC-embargoed countries • Does NOT apply to instruction or training regarding design, development, engineering, manufacture, assembly, testing and use of a defense article • Does not apply to encryption software • Dissertation research must meet the standards for “fundamental research” to qualify under this exception as “publicly available”

13. Public Domain (ITAR); Publicly Available (EAR) Exclusions • Applies to information generally accessible to the public through libraries, unrestricted subscriptions, bookstores, newsstands, published patent information, open conferences and meetings • Does NOT apply to instruction or training regarding design, development, engineering, manufacture, assembly, testing and use of a defense article or service, even if the information is in the public domain

14. Tool of the Trade • Temporary export of a “tool of the trade”, such as mass market software (e.g., Vista) and laptop, does not require a license if it is • Being used for the employer’s work • Remains under the control of the U.S. person at all times • Returned to the U.S. within one year • Does NOT apply to information, materials, equipment, software or technology that is a defense article or service • Restrictions apply to encryption software • Presumed illegal to take “tools of the trade” to embargoed countries

15. Avoiding export control issues

16. Compliance • Know and recognize “red flags” • Find out what technologies/information in work at your institution (or in your department, or done by your PI) may be export-controlled • Find out about restricted party screening of foreign persons at your institution • Ask for advice before allowing faculty to share covered (controlled) technology with foreign nationals (in the US or abroad)

17. Learn to Spot “Red Flags” • Restrictive terms in agreements • Who can participate in the work • What you can publish • When you can publish • How you can share, distribute, or use results • Work done abroad • Sending abroad information, material or equipment • Electronic sharing of software or other technology including • Not publicly available • Encryption software • Defense article or service • Ultimate destination or use unknown (you send it overseas and the recipient sends it to someone else) • Sending, transmitting or disclosing to a sanctioned country or a person or organization on the restricted party lists

18. Troublesome award terms • Publication restrictions • Most U.S. academic research is excluded from export controls (Fundamental Research Exclusion) because we do not accept award terms that require sponsor approval before we can publish research results • Make sure PIs do not make a “side” agreement (including confidentiality agreements) that contains a term restricting publication of project results • Participation restrictions • Award terms that restrict participation of foreign nationals in the project are troublesome as they limit your ability to assign students, fellows, staff and investigators to the project without approval

19. How PIs export (share) information outside the U.S. • Subrecipient agreements • Consultants and “other significant contributors” • Material transfer agreements • Shipping or carrying items to foreign sites • Traveling to visit colleagues or to speak at conferences

20. How PIs export (share) information inside the U.S. • Foreign national visiting scientists/scholars, employees and students

21. Does your institution have an export compliance officer? …or do you perform that function? • Resources • Listserv • NCURA Compliance Community • Other institutions’ websites • Colleagues/networking • Consultants • Seminars and webinars (federal agencies and commercial) • http://www.bis.doc.gov/seminarsandtraining/index.htm • http://export.gov/training/eg_main_021237.asp

22. Typical institution-level processes • I-129 visa petition export control certifications for foreign national employees • Foreign national visiting scientists and scholars • Subrecipient agreements, consultant agreements, material transfer agreements for non-U.S. entities/persons • Review of awards with overseas project work • Protection of publication rights

23. Transactions that can be hard to catch at the institution level • International shipping • International travel • Potential issues at the grant proposal stage • Foreign national participating in project

24. What your export control officer (or you) will want to know • Who will receive the information, technology or technical data • Individuals and entities • Country/countries involved • What information, technology, technical data, or services may be involved • Project work description • Who can the export control officer talk to in depth about the project work?

25. What your export control officer (or you) will want to know • Eliminating “false hits” in screenings – additional information about a foreign national may be needed to determine whether there is a valid match on the denied persons lists. • Birth date or other information may need to be obtained

26. Self-disclosure Tools • Proposal routing questions related to international collaboration, sensitive research areas • Questionnaires – as follow-up for “flagged” proposals or in other situations (e.g., travel to a foreign meeting)

27. Work with your PI • The investigator should review the Commerce Control List and the U.S. Munitions List to determine whether they may work with controlled technology. • The investigator should be aware of the main sanctioned countries and either avoid working with them or anticipate a long license process. • For specific situations, decision trees are available to help determine whether to seek out export control expertise

28. Decision Trees • Stanford University’s Decision Tree http://export.stanford.edu/tree/index.html • Export Control Decision Flowchart: http://www.ord.umaryland.edu/exportcontrol/flowchart.html

29. Questions?

30. For reference:

31. EAR/Commerce Control List • Category 0 - Nuclear Materials, Facilities & Equipment (and Miscellaneous Items) • Category 1 – Special Materials, Chemicals, Microorganisms, and Toxins • Category 2 - Materials Processing • Category 3 - Electronics • Category 4 - Computers • Category 5 - Telecommunications & Information Security • Category 6 - Sensors and Lasers • Category 7 - Navigation and Avionics • Category 8 - Marine • Category 9 – Aerospace and Propulsion

32. ITAR/U.S. Munitions List Category I - Firearms, Close Assault Weapons and Combat Shotguns Category II - Guns and Armament Category III - Ammunition/Ordnance Category IV - Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines Category V - Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents. Category VI - Vessels of War and Special Naval Equipment. Category VII - Tanks and Military Vehicles Category VIII - Aircraft and Associated Equipment Category IX - Military Training Equipment and Training Category X - Protective Personnel Equipment and Shelters Category XI - Military Electronics Category XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment Category XIII - Auxiliary Military Equipment Category XIV - Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment. Category XV - Spacecraft Systems and Associated Equipment Category XVI - Nuclear Weapons, Design and Testing Related Items Category XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated Category XVIII - Directed Energy Weapons Category XIX - [Reserved] Category XX - Submersible Vessels, Oceanographic and Associated Equipment Category XXI - Miscellaneous Articles

33. Defense articles/services defined: The intended use of the article or service after its export (i.e., for a military or civilian purpose) is not relevant in determining whether the export is subject to the ITAR controls. Defense article: 22 CFR 120.6 Any item or technical data listed on the United Stated Munitions List. This term includes technical data recorded or stored in any physical form, models, mockups or other items that reveal technical data directly relating to items on the United States Munitions List. It does not include basic marketing information on function or purpose or general system descriptions. Defense service:  22 CFR 120.9 Furnishing technical data or assistance (including training) to foreign persons (i.e., foreign nationals), whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; or, military training of foreign units and forces. Technical data: 22 CFR 120.10 Information other than software which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles, but does NOT include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain (including the fundamental research exclusion)

34. Country Issues • For export purposes, the United States is: • 50 States and District of Columbia • Puerto Rico • U.S. Virgin Islands • Guam • American Samoa • Northern Mariana Islands • OFAC comprehensively embargoed countries: Cuba, Iran, Myanmar (Burma), North Korea, Sudan, and Syria • Assume that any transaction, not just financial, will require a general or specific license from OFAC. • License exemptions are very limited for these countries.

35. OFAC List-based Sanctionshttp://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx • Balkans • Belarus • Burma • Cote D’Ivoire • Cuba • Democratic Republic of Congo • Iran • Iraq • Lebanon • Liberia-Former Liberian Regime of Charles Taylor • Lybia • North Korea • Somalia • Sudan • Syria • Yemen • Zimbabwe • Counter Terrorism • Rough Diamond Trade Controls • Counter Narcotics Trafficking • Non-Proliferation • Transnational Criminal Organizations

36. Country Issues -ITAR-prohibited Export Destinations http://www.pmddtc.state.gov/embargoed_countries/index.html • Afghanistan • Belarus • Burma (Myanmar) • China • Cote d'Ivoire • Cuba • Cyprus • Democratic Republic of Congo • Eritrea • Fiji • Haiti • Iran • Iraq • Kyrgyzstan • Lebanon • Liberia • Libya • North Korea • Pakistan • Somalia • Sri Lanka • Sudan • Syria • Venezuela • Vietnam • Zimbabwe

37. Country Issues - EAR • Export restrictions are determined by the technology or product to be exported and the country of destination • http://www.bis.doc.gov/policiesandregulations/regionalconsiderations.htm • EAR Part 744 – Supplement 4 – Entity List • Lists certain entities subject to license requirements for specified items • Examples: Kitro Corporation (Canada); 54th Research Institute of China, Northwestern Polytechnical University (China); Ben Gurion University (Israel); Pyramid Technologies (U.A.E.)