Export Controls – Classifying Items

1. Export Controls – Classifying Items NCURA Regional Spring Meeting April 27, 2008

2. Laws and Regulations

3. 0 = Nuclear Materials, Facilities and Equipment and Misc. 1 = Materials, Chemicals, Microorganisms and Toxins 2 = Materials Processing 3 = Electronics 4 = Computers 5 = Telecommunications and Information Security 6 = Lasers and Sensors 7 = Navigation and Avionics 8 = Marine 9 = Propulsion Systems, Space Vehicles and Related Equipment Commerce Control List (CCL) Categories under the EAR

4. Within each category, items are arranged by group. Each category contains the same five groups. Each Group is identified by the letters A through E, as follows: A – Systems, Equipment and Components B - Test, Inspection and Production Equipment C - Materials D - Software E - Technology (Specific information necessary for the ‘development’, ‘production’, or ‘use’ of a product, including ‘technical data’ or ‘technical assistance’. ‘Technical data’ may take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions.) CCL – Five Product Groups

5. Export Control Classification Numbers (ECCNs) • Category • Group • Item • 3A001 – “Electronics components, as follows (see List of Items Controlled)”

6. Examples of Items Covered by Category 3 - Electronics GROUP A: Systems, Equipment, and Components 3A001 examples: • Microprocessor microcircuits, micro-computer microcircuits, and microcontroller microcircuits manufactured from a compound semiconductor and operating at a clock frequency exceeding 40MHz; or • storage integrated circuits manufactured from a compound semiconductor; or • Microwave integrated circuits or modules having all of the following: containing ‘monolithic integrated circuits’ having one or more active circuit elements, and operating at frequencies above 3GHz

7. Examples of Items Covered by Category 3 - Electronics GROUP B: Test, Inspection and Production Equipment(3B001) • Equipment for the manufacturing of semiconductor devices or materials and specially designed components and accessories therefor. • Equipment designed for epitaxial growth capable of producing a layer thickness uniform to less than +/-2.5% across a distance of 75 mm or more • Molecular beam epitaxial growth equipment using gas or solid sources • Equipment design for ion implantation, having any of the following • A beam energy (accelerating voltage) exceeding 1MeV; or • Being specially designed and optimized to operate at a beam energy (accelerating voltage) of less than 2keV; or • Direct write capability; or • A beam energy of 65keV or more and a beam current of 45 mA or more for high energy oxygen implant into a heated semiconductor material substrate

8. Examples of Items Covered by Category 3 - Electronics GROUP C: Materials • Hetero-epitaxial materials consisting of a ‘substrate’ having stacked epitaxially grown multiple layers of any of the following: • Silicon • Germanium • Silicon Carbide, or • III/V compounds of gallium or indium • Resist material and ‘substrates’ coated with controlled resists: • Positive resists designed for semiconductor lithography specially adjusted for use at wavelengths below 350 nm; • All resists designed for use with electron or ion beams with a sensitivity of 0.01 ucoulomb/mm2 or better; • All resists designed for use with X-rays, with a sensitivity of 2.5mJ/mm2 or better; • All resists optimized for surface imaging technologies, including silylated resists.

9. Examples of Items Covered by Category 3 - Electronics GROUP D: Software • Software specially designed for the ‘development’ or ‘production’ of equipment controlled by 3A001.b to 3A002.g or 3B (except 3B991 or 3B992) • Software specially designed for the ‘use’ of ‘stored program controlled’ equipment controlled by 3B (except 3B991 & 992) • Computer-aided-design (CAD) software , having all of the following • Designed for the ‘development’ of semiconductor devices or integrated circuits, and • Designed to perform or use any of the folllowing • Design rules or circuit verification rules; • Simulation of the physically laid out circuits; or • Lithographic processing simulators for design.

10. Examples of Items Covered by Category 3 - Electronics GROUP E: Technology • ‘Technology’ for the ‘development’ or ‘production’ of equipment or materials controlled by 3A (except 3A292, 3A980, 3A981, 3A991 or 3A992), 3B (except 3B991 or 3B992) or 3C • ‘Technology’ for the ‘development’ or ‘production’ of ‘microprocessor microcircuits’, ‘microcomputer microcircuits’ and microcontroller microcircuits having a ‘composite theoretical performance’ (‘CTP’) of 530 million theoretical operations per second (MTOPS) or more and an arithmetic logic unit with an access width of 32 bits or more • ‘Technology’ for the ‘use’ of equipment or ‘software’ controlled by 3A001.a.1 or .2, 3A101, or 3D101 • ‘Technology’ for the ‘development’ of ‘software’ controlled by 3D101

11. Examples of Items Covered by Category 1 Materials, Chem, Microorganisms, & Toxins

12. Using the Commerce Control List • A good explanation of the structure of the CCL, how to read the ECCNs, and how to determine if an export license is required is found in Part 738. A good ‘diagram’ of the process is found in Part 732, Supplements 1 & 2 • Start by finding the commodity on the CCL. Note the ECCN number and check the “reason for control” at the beginning of each entry, under License Requirements

13. AT: Anti-Terrorism CB: Chemical & Biological Weapons CC: Crime Control CW: Chemical Weapons Convention EI: Encryption Items FC: Firearms Convention MT: Missile Technology NP: Nuclear Non-Proliferation NS: National Security RS: Regional Stability SS: Short Supply UN: United Nations Embargo SI: Significant Items SL: Surreptitious Listening Using the Commerce Control List – Reason for Listing

14. Using the Commerce Control List • Check the country list at EAR Part 738, Supplement 1 • Determine whether country to which item will be shipped has check (X) under the applicable ‘reason for control’ column • If no (X), ship item as “NLR” (No License Required). See EAR Parts 758 and 762 for export clearance procedures and recordkeeping requirements for NLRs. • If box is checked for the country under the applicable ‘reason for control’ column, then a license may be required.

15. Using the Commerce Control List • Check “License Exceptions” heading that appears after the “License Requirements” section for the ECCN. See EAR Part 740 for all license exceptions. Some commonly used ones are: • LVS: Limited Value Shipment (Part 740.3) • CIV: Civil End-Users (Part 740.5) • TSR: Technology & Software under Restriction (Part 740.6) • CTP: Computers (Part 740.7) • TMP: Temporary Imports, Exports, & Reexports (Part 740.9) (See Tools of Trade for personal use abroad, at 740.9(a)(2)(i) and ‘Beta Software’ at 740.9(c)) • TSU: Technology and Software Unrestricted (Part 740.13)(See publicly available encryption source/object code at 740.13(e) and(f)) • BAG: Baggage (Part 740.14) • ENC: Encryption Commodities and Software (Part 740.17)

16. Using the Commerce Control List • If no license exception applicable, apply for license using BIS-748P or SNAP-R • Note: Many ECCNs have more than one “reason for control”. Each reason must be checked on the country chart before concluding No License Required (NLR) • Note: Each license exception has specific criteria that must be met to qualify for the license exception. Also, many license exceptions require special record-keeping and some require notification to the government of use of the license exception. See especially the notification requirements described in EAR Part 742.15(b)(1) and (b)(2) for certain encryption items controlled under ECCNs 5A992, 5D992, and 5E992.

17. Using the Commerce Control List • Note: In addition to checking the “Reason for Control”/Country Chart, as well as the “License Exceptions”, there are General Prohibitions listed in EAR Part 736. Whether the shipment will be subject to one of these prohibitions depends upon: 1) the ECCN classification of the item; 2) the destination; 3)the end-user; 4) the end-use; and 5) conduct. Prohibitions 4-10 are: • Denial Order issued under EAR Part 766 • Export to prohibited end-uses or end-users under EAR Part 744 • Export to embargoed destination described in EAR Part 746 • Support of Proliferation Activities described in EAR Part 744 • Intransit Shipments through specified countries listed in EAR Part 736(b)(8)(ii) • Violation of terms and conditions of an exception or license • Proceeding with knowledge that a violation has or is about to occur • Practical tip: start by screening the end user. If the end user can’t receive the shipment, there’s no point in classifying the item.

18. Using the Commerce Control List • If the commodity does not appear on the CCL, then the item is shipped under category EAR99, NLR (unless Prohibitions 4 through 10 apply). • If you have trouble locating the Section of the CCL that includes the commodity you are looking for, try the alphabetical listing of all items on the CCL found at EAR Part 774, Supplement 1, and then work backwards to the ECCN • Search for items by both the common name and scientific name. Consult with the faculty member. If you conclude the item is not included in the CCL, write a note to the file documenting the search conducted. • If you aren’t sure, you can contact your BIS regional office or request a Commodity Classification (See Part 748.3)

19. Example:Classifying a piece of equipment under the EAR

20. A faculty member in your Criminal Justice department is working with a colleague at the University of Iceland in Reykjavik who is testing the scientific validity of polygraph measurements. He wants to ship a U.S. polygraph to his colleague.

21. Example: Shipment of Polygraph (Basic Steps) • Step 1 - Classification of item. Start by looking in the Commerce Control List under the category of electronics (Category 3) and product group which covers equipment (Product Group A). Then read through the list to find whether your item is included in the list. The ECCN for polygraphs is 3A981. • Step 2 –License requirements. These list the reason that the item is controlled. Polygraphs are controlled for “CC”, or crime control.

22. Example: Shipment of Polygraph (Basic Steps) • Step 3 – Destination Country. Check whether a license is required for the country.

23. Example: Shipment of Polygraph (Basic Steps) • Step 4 –Screening. Certain individuals and organizations are prohibited from receiving U.S. exports. • Entity List– BIS list of organizations identified as engaging in activities related to the proliferation of WMD. • Specially Designated Nationals and Blocked Persons List– OFAC list of individuals and organizations representing restricted countries or known to be involved in terrorism or narcotics trafficking. • Unverified List– BIS list of firms for which it was unable to complete an end-use check.

24. I - Firearms II - Artillery Projectors III - Ammunition IV - Launch Vehicles, etc... V - Explosives, Propellants, Incendiary Agents and Their Constituents VI - Vessels of War and Special Naval Equipment VII - Tanks and Military Vehicles VIII - Aircraft and Associated Equipment IX - Military Training Equipment X - Protective Personnel Equipment XI - Military Electronics XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment XIII - Auxiliary Military Equipment XIV - Toxicological Agents and Equipment and Radiological Equipment XV - Spacecraft Systems and Associated Equipment XVI - Nuclear Weapons Design and Related Equipment XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated XVIII - Reserved XIX - Reserved XX - Submersible Vessels, Oceanographic and Associated Equipment XXI - Miscellaneous Articles ITAR - U.S. Munitions List

25. ITAR – U.S. Munitions List • The list of items controlled under ITAR is more straightforward and is only 40 pages long. There are no subdivisions within categories. • Some of the items listed are broadly defined, such as those included in Category XV, Spacecraft Systems and Associated Equipment: • a) Spacecraft, including . . scientific satellites, research satellites, etc. • b) Ground control stations for telemetry, tracking and control of spacecraft or satellites • c) All specifically designed or modified systems, components, parts, accessories, attachments, and associated equipment for articles in this category

26. ITAR – U.S. Munitions List • Many of the other broad category items are qualified with the phrase “specifically designed or modified for military application” • There is no ‘country chart’ or categories of ‘license exception’; if the article is on the list, you will need to secure a license for permanent or temporary export or temporary import of the item.

27. EXERCISES

28. Do’s and Don’ts • Do NOT ship any item outside the U.S. without first checking the ITAR and EAR Lists to determine if the item is controlled (This includes outgoing MTA’s, software licenses, and any agreement deliverables) • Secure license approval or verify license exception PRIOR to Shipment for all controlled items • Make sure that technical data about export controlled commodities in in “public domain” (ITAR term) or qualifies as “publicly available” (EAR term), so that a license for shipment of technical data out of the U.S. is not required and that the ‘deemed export’ rule to a foreign national in the U.S. does not apply. • Qualify software as ‘publicly available’, or otherwise secure licenses prior to shipment if the software is on CCL or USML

29. QUESTIONS?