U.S. Export Law Introduction & University Issues

1. U.S. Export Law Introduction & University Issues Mitch Goodkin, MSE, MBA, JD, PE Senior Export Compliance Officer Division of Research Development and Administration University of Michigan Rev. 3/23/10

2. Triggers of Potential Export Issues in Research Environment • Constraints on publication of research results • Access to information that is not publicly available • Restrictions on participation of foreign nationals

3. Why is there a concern? • Potential jail and major fines • Impact on Openness of Research • Constraints on open discussions/sharing • Constraints on participation • Constraints on future research • Potentially limited to government sponsors • Impact on careers • Reduced potential to publish

4. Export Regulations • ITAR (International Traffic in Arms Regulations) • State Department (defense/space) • EAR (Export Administration Regulations) • Bureau of Industry & Security (BIS), Commerce Department (dual use;some defense items; everything else) • OFAC (Office of Foreign Assets Control) Treasury Dept. (Sanctions/Embargoes - countries, organizations, individuals) • Others – e.g., Atomic Energy

5. What is controlled? • Exports: Transfers to other countries • Physical items • Computer software • Technical information • Deemed exports • Transfer tech info to foreign national in U.S. • Services/Assistance to foreign nationals • Might include Collaborations • Payments to institutions in restricted countries

6. What is Controlled (cont.) • Transactions with certain countries, especially Cuba, Iran, North Korea, Sudan, Syria • Terrorist support • Narcotics trafficking • Proliferation of weapons of mass destruction • Raw diamond trading

7. Types/levels of Export Controls • Complete prohibition • Government approval before export (License) • Notice to government before export • Written assurances by recipients/participants

8. U.S. Person U.S. person may receive in U.S. export controlled information • U.S. citizen • Permanent resident of U.S. • Protected person (8USC1324b(a)(3)) • U.S. corporations and other legal entities

9. Technical Data Controlled • ITAR • Design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification • Classified information • EAR • Development, production or use

10. Exclusions/Exemptions/Exceptions • Exclusions - Not subject to nor controlled by the regulations • Exemption(ITAR)/Exception(EAR) - Subject to the regulation - reduced constraints/rules • Even though certain information may not be subject to a regulation, a service using that information may be controlled.

11. Exclusions(Not controlled by export regulations) • Publicly available information • Information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities • EAR: catalog courses & labs

12. Publicly Available • Information which is published and generally accessible or available to the public • EAR expressly includes: “will be published” • Arise out of or results from Fundamental research • Special rules for encryption technology

13. Fundamental Research • Basic and Applied Research • Science and Engineering • Accredited institution of higher learning (EAR even allows for-profit companies) • In the U.S. (U.S. not specified under EAR) • Resulting information ordinarily published & shared broadly in scientific community

14. Fundamental Research • No contract restriction on publication of research results • No “Side Deals”

15. EAR Fundamental Research • Research conducted by scientists, engineers or students at a university normally considered fundamental research • Accredited institutions of higher education in the United States

16. Exemptions - ITAR • Exemptions from license requirements in ITAR are limited

17. Exceptions - EAR • Sixteen (16) categories of exceptions expressly listed in EAR, each with its owns set of rules • Examples: • Baggage (BAG) • Temporary exports (TMP) • Mass market software (TSU)

18. Penalties • Personal as well as organization • Prison for individuals • Fines - Usually less for individuals; but still very substantial • Enforcement agencies usually look for multiple violations in each given situation

19. Grants---ContractsTendency for Restrictions • Sensitivity of Technology • Specific Government/Defense Need • More Service/Applied than Basic

20. University Issues • Loss of Fundamental Research exclusion due to constraints on dissemination of research results • Prohibition on dissemination of results • Approval required for dissemination OK (not affect exclusion): • Review and comment • Protection of sponsor’s information • Short Delay for patent protection

21. University IssuesNon-Disclosure/Access Agmts • Receipt of proprietary • Information • Material • Software • Equipment/devices • Impact • Not publicly available • Information controlled under the export regulations

22. University IssuesNon-Disclosure/Access Agmts • Issues • Will received/controlled information be needed to understand the results when published • Who needs to see the information; why • Who needs access to the material, software, equipment; why • How will the information and access be controlled

23. University IssuesControl Plans • Control Plans • Access control • Information (verbal/written) control • Information (electronic) control • Devices/equipment control • Software control • Level/degree of control • Documentation of controls • Plan • Implementations

24. Suggestions for Faculty • Watch for potential export issues • Get help early - DRDA/OGC • DRDA Project Representative • Formal Assessments • DRDA/OGC • Outside consultants through DRDA/OGC • Documentation of assessments • Carriers for physical shipments • Reporting to Government • Web transfers

25. Potential Approaches • Limit activity to “fundamental research” • Use publicly available information • Avoid/Limit proprietary information • Avoid contract restrictions on • Dissemination of results • Who can participate • Define Scope of Project to avoid or limit export issues

26. Potential Approaches • Clarify in proposal/SOW that not only is project essential to sponsor’s goals; but, also has general public benefit. • General benefit • Not military specific • “Dual use” • Example: General purpose software model • Input files define specific devices

27. Potential Approaches • Seek alternative implementation where export control cannot be avoided as originally planned, e.g. • Use non-military materials/equip. • Comparable non-military objective • Avoid ITAR if possible; EAR better • More EAR exceptions • Fewer services controlled under EAR

28. Activity Approval (PAF-R) • PAF-R form and process • Regents Policy of balancing • Openness v. freedom of research • Justification for accepting controls • Clearly, specifically define benefits and problems with accepting controls & restrictions when you feel activities are desirable

29. Scenarios - Info/Matl/Device Received • Info received as background for PI only • Access to materials/equip not disclosing • Info/matl/device/equip received is only needed for part of project - • Only PI needs controlled info/access

30. Scenarios - Projects • Separable project tasks • Limited portion with restrictions & export controls • Example: 95% of project is research for new concepts; final short phase is to help sponsor with specific application

31. Travel –Laptops & other Equipment • “Don’t do it!” – Perhaps simplistic!? • Risks • Export violation • Forced file disclosures • Confiscation • Solutions/Alternatives? • http://www.safecomputing.umich.edu/MDS/overseas_travel.html • http://www.drda.umich.edu/policies/federal/export_controls_travel.html

32. Who to Contact • Your DRDA Project Representative • Primary contact for research related activities • Sharyn Sivyer Facility Security Officer (FSO) (Classified Projects) Senior Project Representative, Division of Research Development and Administration Email: ssivyer@umich.edu Phone: 734 936 1296 • Mitch Goodkin Sr. Export Compliance Officer Division of Research Development and Administration Email: mgoodkin@umich.edu Phone: 734 936 1585