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U.S. Export Controls. Advance foreign policy goalsRestrict export of goods and technology that could contribute to the military potential of adversariesPrevent proliferation of weapons of mass destruction (nuclear, biological, chemical)Fulfill international obligations. Agencies that govern expor
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2. U.S. Export Controls Advance foreign policy goals
Restrict export of goods and technology that could contribute to the military potential of adversaries
Prevent proliferation of weapons of mass destruction (nuclear, biological, chemical)
Fulfill international obligations
3. Agencies that govern export controls There are three principal agencies
State Department
Commerce Department
Treasury Department
4. Treasury Department Office of Foreign Assets Control (OFAC)
Trade Sanctions, Embargoes, Restrictions on Transfers to Certain End-User
5. About OFAC Embargoes administered by Office of Foreign Assets Control, U.S. Department of Treasury (“OFAC”)
Regulates all transactions abroad with prohibited parties, such as terrorists and countries subject to U.S. embargoes e.g., prohibited end-users
U.S. economic sanctions focus on the end-user or country rather than the technology
Prohibitions on trade with countries such as Iran, Cuba
Limitations on activities in certain areas of countries or with certain non-state actors
6. Export Controls US Export Controls
Cover any item in U.S. trade (goods, technology, information)
Extend to U.S. origin items wherever located, including U.S. (Jurisdiction follows the item or technology world wide)
Controls have broad coverage and limited exclusions
License may be required to export
7. State Department
Directorate of Defense Trade Controls (DDTC)
International Traffic in Arms Regulations “ITAR”
Arms Export Control Act of 1976
8. International Traffic in Arms Regulations (ITAR)
Covers military items (“munitions” or “defense articles”)
Regulates goods and technology designed to kill people or defend against death in a military setting (e.g., tank, fighter aircraft, nerve agent defensive equipment)
Creates “defense articles” (includes tech data which encompasses software unlike EAR) and “defense services” (certain information to be exported may be controlled as a “defense service” even if in the public domain)
Includes technical data related to defense articles and defense services (furnishing assistance including design, engineering, and use of defense articles)
Includes space-related technology and research; increasing applicability to other university research areas such as nanotechnology/new materials and sensors and life sciences
About ITAR
9. Commerce Department Bureau of Industry and Security (BIS)
Export Administration Regulations
Export Administration Act of 1974
10. Export Administration Regulations (EAR)
Covers dual-use items: 10 CCL categories of different technologies covering equipment, tests, materials, software and technology
Covers goods, test equipment, materials, technology (tech data and technical assistance) and software
Also covers “re-export” of “U.S.-origin” items outside the United States
Regulates items designed for commercial purpose but that can have military or security applications (e.g., computers, pathogens, civilian aircraft)
About EAR
11. FUNDAMENTAL RESEARCH Fundamental Research means 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.”
12. FUNDAMENTAL RESEARCH EXCLUSION National Security Decision Directive 189 which stated, 1985
“It is the policy of this Administration that, to the maximum extent possible, the products of fundamental research remain unrestricted. It is also the policy of this Administration that, where the national security requires control, the mechanism for control of information generated during federally-funded fundamental research in science, technology and engineering at colleges, universities and laboratories is classification.”
13. FUNDAMENTAL RESEARCH Fundamental Research means 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.”
The Fundamental Research Exclusion applies only to the dissemination of research data and information, not to the transmission of material goods.
14. FUNDAMENTAL RESEARCH EXCLUSION IS DESTROYED IF The university accepts any contract clause that:
Forbids the participation of foreign persons
Gives the sponsor a right to approve publications resulting from the research; or
Otherwise operates to restrict participation in research and/or access to and disclosure of research results.
NOTE: “Side deals” between a PI and Sponsor destroy the fundamental research exclusion and may also violate university policies on openness in research
15. DEEMED EXPORTS The disclosure or transfer of export controlled software, technologies or technical data to a foreign entity or individual inside the US is “deemed” to be an export to the home country of the foreign entity or individual.
Applies to technology transfers under the EAR and the provisions of ITAR technical data and defense
16. U.S. Exports Post 9/11 Top research universities became a focal point for U.S. government export control compliance
Growing intersection of cutting-edge science, technology and engineering research with national security, foreign policy and homeland security
Evolving role of the research university (global in scope, multidisciplinary, changing innovation role)
17. U.S. Export Controls -- A Growing Focus on Research Universities Growing government perception that universities “are not serious” about export control compliance and are misusing the fundamental research exclusion
Corporate complaints that universities “aren’t playing by the same rules” with competitive implications
GAO Report (2002) severely criticizing Commerce’s oversight of “deemed exports”, especially with foreign nationals from India, Pakistan, China, Russia and Israel
18. U.S. Export Controls -- A Growing Focus on Research Universities II Fall 2003 -- Federal interagency export control investigation/audit of 9 major research universities; OIG Report and Congressional hearings in 2004
“Enhanced” export control enforcement focus on universities and their researchers
Summer 2006 – GAO “Interviews” of about two dozen research institutions
GAO Report – issued December, 2006
19. State Department (ITAR)
Criminal violations: up to $1,000,000 per violation, up to 10 years imprisonment
Civil penalties: seizure and forfeiture of the articles and any vessel, aircraft or vehicle involved in attempted violation, revocation of exporting privileges, fines of up to $500,000 per violation
Commerce Department (EAR)
Criminal violations: $50,000-$1,000,000 or five times the value of the export, whichever is greater per violation (range depends on the applicable law), up to 10 years imprisonment
Civil penalties: loss of export privileges, fines $10,000-$120,000 per violation Penalties for Noncompliance
20.
Treasury Department (OFAC)
Criminal violations: up to $1,000,000 per violation, up to 10 years imprisonment
Civil penalties: $12,000 to $55,000 fines (depending on applicable law) per violation. UCLA recently fined for an OFAC violation involving an activity with Iran.
Penalties for Noncompliance (cont’d)
21. Loss of “exporting” privileges (usually for 30-90 days) could cripple a university’s normal activities
Puts federal funding at risk -- for the university and for the individual
Violation of specific sanctions laws may add additional penalties
Public relations and media attention -- Most settlements with the Commerce, State or Treasury Departments generally become public. Court cases are always public! Penalties for Noncompliance (cont’d)
22. SOME STEPS FOR ANALYZING EXPORT CONTROL ISSUES Who?
Who wants to travel outside the US?
Who is the intended recipient of a piece of equipment or technology? In what country are they located?
What?
What piece(s) of equipment are intended for export?
What technology?
Where?
Where are the individuals traveling?
What is the intended destination of the equipment or technology?
For a deemed export, what is the nationality of the intended recipient who is a foreign national?
When?
What is the time frame for export?
If it will be returned, when?
Has it been sent already?
Why?
What is the purpose for the export?
What is the research project involved? Is there a Statement of Work?
Is it the subject of an agreement?
23. Harvard Export Control Policy and Procedures Harvard University Export Control Policy
http://www.provost.harvard.edu/policies_guidelines/Export%20Control_Compliance_Policy%20Statement_6-19-07.pdf
Harvard University Export Control Policy and Procedures
http://www.provost.harvard.edu/policies_guidelines/Compliance_Manual_June_2007.pdf
24. Where is the information? Bureau of Industry and Security (BIS) Department of Commerce http://www.bis.doc.gov/
Directorate of Defense Trade Controls (DDTC) Department of State http://pmddtc.state.gov/
Office of Foreign Assets Control (OFAC) Department of Treasury http://www.treas.gov/offices/enforcement/ofac/
Export Administration Regulations http://www.access.gpo.gov/bis/ear/ear_data.html
International Traffic in Arms Regulations http://pmddtc.state.gov/itar_index.htm
25. CONTACT INFORMATION Eileen Nielsen
enielsen@hsph.harvard.edu
617-432-7350
26. Questions?