Introduction to Export Controls Instrumentation Workshop June 12-13, 2013

1. Introduction to Export ControlsInstrumentation WorkshopJune 12-13, 2013 NATASCHA FINNERTY EXPORT COMPLIANCE OFFICER nfinnerty@cfa.harvard.edu 617 496-7557

2. SI’S EXPORT COMPLIANCE PROGRAM • Export Compliance Officer (ECO) • Position was created in 2013 • ECO is located at SAO, Cambridge, MA • Responsible for both SAO and SI export compliance issues • SI’s Empowered Officials (EO) • Presently at NASM and SAO (2) • Transition to Under Secretary for Finance and Administration, Al Horvath • ECO will coordinate closely with SI EO, OGC and OIR

3. “Export” Activities • Movement of goods to a foreign country • “Deemed export” – transfer of controlled information to a non-US person in the US • Export to certain US possessions • Transfer of funds to a foreign country

4. SI’s EXPORT COMPLIANCE PROGRAM • Create an Export Compliance Working Group to generate SI’s Directive on Export Compliance • Conduct “fact-finding” • Find out where exports and imports are occurring • Ensure export and import procedures are updated: export, export licensing, export clearance, and import

5. Our Export Compliance Goals • Ensure export-restricted transfers are covered by a license: • Tangible exports • Deemed export license for visitors, fellows, students, contract partners • Temporary exports and re-imports

6. Our Export Compliance Goals • Ensure that proper records are created and maintained (Commercial invoice, export clearance filings.) • Ensure security measures for laptops and other mobile devices are followed, especially when traveling abroad

7. Export Compliance Overview • Introduction to Export Laws • Agencies that regulate controlled items or data • Typical tangible items that may need an export license

8. 1. Introduction to Export Laws • US Government considers exporting a privilege • Regimes internationally coordinate ways to restrict trade of strategic goods with “adversaries” • Other reasons for controls: • Further US foreign policy • Thwart terrorism • Restrict regional stability risks • Stop trade over items that contribute to weapons of mass destruction

9. 2. Agencies that regulate controlled items, software or data • Directorate of Defense Trade Controls, US Dept. of State • regulates defense articles, subassemblies, parts and technology, including space-related activities and infrared items • Bureau of Industry and Security, US Dept. of Commerce • regulates “dual use” commercial items, production equipment, software and technology. These are items that have a strategic purpose with respect to national security, foreign policy, missile technology, proliferation, regional stability and crime control • Office of Foreign Assets Controls • licenses all exchanges and financial transactions with embargoed countries • Bureau of Census • export clearance and trade statistics

10. 3. Typical “tangible” items that may need an export license • The items that may be regulated fall on the US Munitions List or Commerce Control List: • Instruments like detectors and spectrometers • Certain chemicals and biological items • Laboratory equipment made with non corrosive metals • Infrared optics, night vision technologies • Space craft, satellites and rad hardened components • Military aircraft and other military-rated items, –space suits • Gyros, computers, software with encryption • Fingerprinting, communication interception equipment • Underwater acoustics and recording equipment

12. US 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

13. US Munitions List • 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

15. Sample export checklist

16. Export License Decisions • 1. What is it? And does it need a license? • If so, from DDTC or Commerce? • Is the item on a list for control? • Is it hazardous, magnetic, regulated for medical or other reasons? • 2. Is the value of the export over $2500 or is the item subject to an export license? • The export needs to be filed in the Bureau of Census Automated Export System. The shipping company can do it for SI but we need to get the filing number and a copy for our records. Also required for Puerto Rico and some US possessions.

17. Export License Decisions (cont’d) • 3. Who is receiving it? • We need to check the name against the government denial lists • 4. Where is it going? • Is the item going internationally or to a US possession like Puerto Rico? • Make sure the country is not subject to trade restrictions (e.g., Cuba, Iran, North Korea, Sudan and Syria) • 5. Make sure all activities comply with the license conditions • equipment, dollar value, parties involved, return, and reporting to USG.

18. EXPORT COMPLIANCE PROGRAM • Goal is to prevent violations • Demonstrate “Due diligence” • The elements are based on published best practices guidelines by the US Departments of State, Commerce and Treasury for • International Traffic in Arms Regulations (ITAR) • Export Administration Regulations (EAR) • Foreign Trade Regulations (FTR) • Foreign Asset Control Regulations (FACR) • US Customs requirements (Treasury)

19. Any questions, please ask! • Natascha Finnerty • 617 496-7557 • nfinnerty@cfa.harvard.edu