Wednesday, January 23, 2013 John Jacobs

1. Certificate in Grants and Contracts Administration Program Session 4: Introduction to Export Controls Wednesday, January 23, 2013John Jacobs

2. Office of Compliance Export Controls Wednesday, January 23, 2013John Jacobs 2

3. Introduction to Export ControlsIs Export Control New to The United States of America? Early Tariffs Civil War WWI September 11th 2001

4. Introduction to Export ControlsWhat/Why is the Issue/Concern with Export Control at UNCC! HSBC foreign bank: Violating DoT/OFAC regulations concerning money laundering in relation to Iran, Libya, Sudan, Burma, Cuba, and Drug Cartels Roth: U.S. citizen, Dr. Roth professor University of Tennessee violated EAR and ITAR a number incidents 4

5. Introduction to Export ControlsWhat is an Export? EAR: The shipment/transfer of items/technology/technical data out of the United States that is subject to EAR or the same action to a foreign person/national in the United States. ITAR: (a) Sending or taking a defense article out of the United States in any manner (b)Transferring registration, control or ownership to a foreign person of any aircraft, vessel or satellite covered by the U.S. Munitions List, whether in the United States or abroad (c) Disclosing (including oral or visual disclosure) or transferring in the United States any defense article to an embassy, any agency or subdivision of a foreign government(e.g., diplomatic missions) (d) Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad (e) Performing a defense service on behalf of, or for the benefit of, a foreign person whether in the U.S. or abroad

6. Introduction to Export Controls The U.S. export control system is based on several different laws. These laws are implemented through a series of executive orders, regulations, and interagency agreements Principal Laws: Export Administration Act of 1979 (EAA) International Emergency Economic Powers Act Arms Export Control Act Atomic Energy Act Trading with the Enemy Act United Nations Participation Act 6

7. Introduction to Export ControlsScope of Controls of the EAR and ITAR Regulations Equipment Chemicals/toxins Biological Software code Computers Associated technology 7

8. Export Control RegulationsEAR: Export Administration Regulations - US Department of Commerce – Bureau of Industry and Security Authorizes President to impose controls on dual use goods for the following purposes: protect national security promote foreign policy interests implement international obligations prevent shortages of goods domestically 8

9. Basic Control Principles of EAR:Dual-Use Items Controls goods, technology, or software subject to U.S. jurisdiction U.S. goods wherever they are located Foreign goods in the U.S. Foreign made products containing U.S. parts & components Technology Export from the U.S. Re-export from one foreign country to another Persons subject to U.S. jurisdiction 9

10. Export Control RegulationsEAR: Export Administration Regulations - US Department of Commerce – Bureau of Industry and Security Continued Controls are imposed and maintained by the Department of Commerce in cooperation with the Departments of State and Defense, and other agencies

11. Export Control RegulationITAR: International Traffic in Arms Regulations - US Department of State – Office of Defense Trade Controls Controls all aspects of Ideas/Materials that are used within Research/Development/Manufacturing any items on the Munitions List of the United States this includes subcomponents of major end items 11

12. Export Control Regulations OFAC: US Department of Treasury - Office of Foreign Assets Control OFAC prohibits: Payments or providing anything of value to sanctioned countries Travel to and other activities with embargoed countries In general, OFAC ‘trumps” export controls 12

13. Introduction to Export Controls: Embargo, Boycott, and Trade Sanctions Controls are Country, Entity and Person Specific Terrorist Supporting Countries (T6) Cuba Iran Libya North Korea Syria Sudan Denied Parties List/ Restrictive Parties Screening 13

14. UNCC PERSPECTIVE Universities know how to do compliance Export control regulations are no more complicated than animal care regulations We didn’t learn animal care overnight We don’t have to learn export control overnight So we don’t have to be afraid of this But we needed a plan 14

15. UNCC Export Management System Designation of an institutional official Training & professional development Awareness programs Record-keeping Internal assessments Legal counsel

16. UniversitiesFundamental Research As defined in NSDD 189: “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.” 16

17. Universities Exclusions Fundamental Research Exclusion Educational Information Exclusion Public Information Exclusion These are Exclusions, not Exemptions 17

18. BIG Concern for Universities: Deemed Exports The transfer of technology or technical data to a foreign person/national in the U.S. is “deemed” to be an export to that individual’s home country Deemed exports is the primary challenge that Universities face 18

19. Operational Considerations Proposal review at all stages Controls on visiting scientists & post doctorate Student tracking Travel, accounts payable, purchasing Handling of proprietary information, software & encryption Material transfer agreements Taking or shipping items to a foreign country Performing defense services; 6.3 funding Controlling technology on campus http://research.uncc.edu/compliance-ethics/export-control 19

20. Export ControlsPenalties EAR. Administrative penalties for violations of the EAR may include: (a) denial of export privileges, (b) exclusion from practice, (c) imposition of a fine up to $250,000 per violation, or twice the value of the transaction, whichever is greater, or (d) any combination of the above. Criminal penalties for a company involve a fine up to the greater of $1,000,000 or 5 times the value of the exports per violation. ITAR. Civil penalties for ITAR violations include a fine of up to $500,000 per violation. Criminal penalties may include a fine of up to $1,000,000 per violation, imprisonment for up to 10 years per violation, or both. Additional penalties may include seizure and forfeiture of the merchandise, interim suspension of export privileges, and debarment - a prohibition from exporting defense articles. Finally, DDTC regularly requires the supervised imposition of compliance programs.

21. Export ControlsPenalties OFAC. Maximum civil penalties for most violations of OFAC statutes and regulations are $250,000 for each violation or twice the value of the transaction (whichever is greater); maximum criminal penalties are fines of up to $1,000,000 or, for an individual, up to 20 years' imprisonment. CBP. Penalties for violation of CBP statutes and regulations allow for seizure and forfeiture of the merchandise, as well as the following penalties: (a) for fraud, penalty is equivalent to the domestic value of the imported merchandise; (b) for gross negligence, penalty is the lesser of the domestic value of the merchandise or four times the loss of revenue to the U.S., or (c) for negligence, the lesser of the domestic value of the merchandise or two times the loss of revenue to the U.S. 19 U.S.C. § 1 592.

22. Concerns You Need to Watch • Restrictions on Publication • Foreign Nationals on Campus • Travel Outside the U.S. • Carrying/Shipping Equipment/Samples Outside the U.S. • Financial Payments to Foreign Nationals/Companies/Countries • Collaborating with Foreign Colleagues in Foreign Countries or in the U.S. • Providing Services or New Information Materials to or from a Boycotted Country • Joint Authorship/Editing of Articles with Foreign Nationals from Embargoed Countries • Accepting Export Controlled Technology/Technical Data/Information • Side Deals

23. Office of Compliance Export Controls Introduction to Export Controls Questions? John Jacobs/ jljacob2@uncc.edu/704.687.1877 Cameron Applied Research Center Room 319

24. Assessment Questions 1) What regulations cover export control? 2) List 4 concerns that you should watch for? 3) Name the Empowered Official? 4) Who do you call with a concern? 5) In what category does UNCC try to keep all the research?