Export/Import Controls & Compliance Training for Faculty and Staff

Export/Import Controls & ComplianceTraining for Faculty and Staff Grants Development Office

Areas of Discussion • Why is Export Control information important? • Export Control Facts • Governing Agencies • Definitions • Applicability of Export Controls • Exclusions • Cal Poly Policy

Why is Export Control information important? Export control regulations are intended to: • Prevent defense articles, services, or dual use commodities from harming the United States or its allies. • Prevent controlled articles from being transmitted in any way outside the U.S. or within the U.S. to foreign person (s), or knowingly cause or permit any other person to do so unless: • The export or service is lawfully made and is covered by the appropriate license, agreement, permit, exception, or exemption • Appropriate documentation has been prepared, maintained, and/or submitted to the cognizant government agencies, as applicable, to permit the export, import, or service • U.S. Government record-keeping requirements are satisfied

Export Control (Cont.) • The U.S. Government restricts the release of the following information to foreign nationals in the U.S. and abroad through export regulation and embargoes: • critical technologies, • technical data/software code, • equipment, • chemicals/biological materials, and • other materials, information and services • Penalties for violating export control regulations include fines, loss of export privileges, personal liability to staff, and potentially irreparable damage to Cal Poly’s reputation Potential fines include up to $1Mfor the University, $1M for individuals, and up to 10 years in prison

Trends • Increased focus on exports that can be used as terrorism tools • Increased focus on universities and on enforcement • FBI College and University Security Effort “CAUSE” Program and Academic Alliance • http://www.fbi.gov/page2/april06/academicalliance040506.htm • Increased focus on life sciences and biological materials. Export Violations can be viewed at the BIS FOIA Web site http://efoia.bis.doc.gov/ExportControlViolations/TOCExportViolations.htm

Cal Poly’s Requirements: • To comply with all export laws and regulations in the US, and each foreign country in which we operate, except where the law of a foreign country may be inconsistent with U.S. law • Develop and disseminate training and compliance materials regarding Export Control to employees • Ensure that all Export/Import records are maintained in accordance with U.S. government regulations • Ensure all faculty, staff, and students understand their roles and responsibilities with regard to Export Control, including authorized agents, Export/Import Compliance License requirements (ECLPS), and shipping requirements

Export Control Facts • Exports include the following: • Shipment of a controlled item or good • Transmission (including fax, digital or hand-carried) of controlled information related to a controlled item • Release or disclosure (including verbal or visual) of any controlled technology, software or technical data either in the U.S. or abroad • Use or application of controlled technology on behalf of, or for the benefit of, any foreign person or entity, either in U.S. or abroad Specific definitions, regulations and exemptions depend on the governing agency for the exported item

Export Control Facts (Cont.) • The Government also utilizes the term “Deemed Export” to describe export of technology or source code when released to a foreign national within the U.S. • Release is making technology or software available to foreign nationals, either visually, orally or by practice or application, under guidance of persons with knowledge of the technology or software • Includes “use technology” – information on the operation, installation, maintenance, repair, overhaul, and refurbishing of controlled equipment and access to proprietary manual.

Export Control Facts (Cont.) • Exports can occur when you provide foreign persons “access” to technical information. For example, by hosting a visitor, hiring a consultant, through use of outside legal/translation services, giving a campus tour of your laboratory, publishing technical data, making presentations, through casual conversations, and sending emails, faxes, etc. • Export control obligations may exist if you provide data or commodities to a person or business and have reason to believe it will be passed on to a foreign country or person.

Governing Agencies • Several government agencies are involved in the regulation of exports; however, the U.S. Department of Commerce and the U.S. Department of State regulate most of our exports • The Department of State • Implements theInternational Traffic in Arms Regulations, known as (ITAR) • ITAR regulates permanent and temporary Export/Import of defense articles, space related technologies, and the performance of defense services on the United States Munitions List • http://www.pmddtc.state.gov/itar_index.htm

United States Munitions List (ITAR) Category I Firearms, Close Assault Weapons and Combat ShotgunsCategory II Materials, Chemicals, Microorganisms, and Toxins Category III Ammunition/OrdnanceCategory IV Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and MinesCategory V Explosives and Energetic Materials, Propellants, Incendiary Agents and Their ConstituentsCategory VI Vessels of War and Special Naval Equipment.Category VII Tanks and Military VehiclesCategory VIII Aircraft and Associated EquipmentCategory IX Military Training EquipmentCategory X Protective Personnel EquipmentCategory XI Military ElectronicsCategory XII Fire Control, Range Finder, Optical and Guidance and Control EquipmentCategory XIII Auxiliary Military EquipmentCategory XIV Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated EquipmentCategory XV Spacecraft Systems and Associated EquipmentCategory XVI Nuclear Weapons, Design and Testing Related ItemsCategory XVII Classified Articles, Technical Data and Defense Services Not Otherwise EnumeratedCategory XVIII Directed Energy WeaponsCategory XX Submersible Vessels, Oceanographic and Associated Equipment

Governing Agencies (Cont.) • The Department of Commerce • Implements the Export Administration Regulations, referred to as (EAR), • Regulates the export of commodities found on the Commerce Control List including dual use commodities(goods and services having both military and civilian uses) • These are items that are not inherently military in nature; they are primarily commercial items with potential military use • Keep in mind time factor in determining requirements and then applying for and receiving licenses - could be as long as 90-120 days, depending on outside agency review • http://www.access.gpo.gov/bis/index.html

How to Determine If You Need A License License requirements are dependent upon: • What you are exporting (item’s characteristics) • Where you are exporting (destination) • Who will receive your item (s) (end-user) • What your item will be used for (end-use) The GDO and SPO will assist in making this determination with the assistance of a consultant if required

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

Governing Agencies (Continued) • The Department of the Treasury specifically administers both comprehensive and partial embargoes against various foreign countries. • Office of Foreign Assets Control (OFAC) enforces economic and trade sanctions against specific countries and individuals • Focus is on terrorists, narcotics traffickers, proliferation of weapons of mass destruction • Prohibited activities (examples): • Conducting surveys and interviews • Engaging services to develop informational materials • Engaging persons to support research activities • Providing marketing and business services • http://www.treas.gov/offices/enforcement/ofac/

Governing Agencies (Continued) • In addition to the U.S. Department of Commerce and the U.S. Department of State, these U.S. governmental agencies are also involved in the regulation of exports: • The U.S. Department of Homeland Security administers U.S. tariff and trade laws and enforces export/import laws and regulations. • The U.S. Department of Justice enforces laws and regulations relating to alcohol, tobacco products, firearms, explosives, and arson.

When Do Export Controls Apply? • Export controls apply if the information/materials appear on either theInternational Traffic in Arms Regulations, known as ITAR Munitions List or the Export Administration Regulations, referred to as EAR, Commerce Control List. • ITAR places strict controls on the export of “defense articles” and “defense services.” Defense articles include any item or technical data on the United States Munitions List (USML), and defense services include the furnishing of assistance to foreign persons, whether or not in the United States, with respect to defense articles, and the furnishing of any technical data associated with a defense article • There are exclusions that cover work performed in academic institutions and a license is not required to disseminate information if an exclusion applies

Export Control Decision Tree For Sponsored Projects Project involves equipment, software, chemicals, bio-agent or technology is classified as a defense article designed or modified for military use, use in outer space, or weapons (ITAR) Project involves a country with imposed US sanctions stipulated or travel to an embargoed country by the US treasury (OFAC) Project involves equipment, software, chemicals, bio-agent or technology which is on the US Munitions List (ITAR) Project involves equipment, software, chemicals, bio-agent or technology which is on the US Munitions List (ITAR) Project involves items on the Commerce Control List (CCL) that are dual in nature having commercial or military application (EAR) Project results will be freely published with no restrictions, no NDA’s or Confidentiality Agreements Project involves encryption software in source or object code (EAR) No No No No No Yes Yes Yes Yes Yes Project meets criteria for Research Exclusion and Not Subject to Export Controls Yes See GDO for Export Control Review Is foreign travel or shipment of articles under the project anticipated? Yes Key Web Sites http://www.pmddtc.state.gov/itar_index.htm (ITAR) http://www.access.gpo.gov/bis/index.html(EAR) http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml(OFAC) GDO evaluates with faculty nature of Export, foreign travel, license requirements, and any restrictions – Faculty completes Annual Export Cert. when traveling abroad Sponsored Programs Office prepares required licenses upon award

Definitions U.S. Person” is defined by ITAR 22 CFR §120.15 as: • A person who is a lawful permanent resident or who is a protected individual. It also means any corporation, business association, partnership, society, trust, or any other entity, organization, or group that is incorporated to do business in the United States. It also includes any governmental (federal, state, or local) entity. It does not include any foreign person as defined in section ITAR 120.16 below

Definitions (Continued) “Foreign Person” is defined by ITAR 22 CFR §120.16 as: • Any natural person who is not a lawful permanent resident as defined by 8 USC. 1101(a)(20) or who is not a protected individual as defined by 8 USC. 1324b(a)(3). It also means any foreign corporation, business association, partnership, trust, society, or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments, and any agency or subdivision of foreign governments (e.g. diplomatic missions)

Definitions (Continued) “Technical Data” is defined by ITAR 22 CFR §120.10 as: Information, other than software as defined in ITAR 120.10(4), which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions, and documentation. • This definition does not include information concerning general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities or information in the public domain as defined in 120.11. It also does not include basic marketing information on function or purpose or general system descriptions of defense articles. Most of university teaching and research falls under one, or more, of several exemptions

Examples of technical data include: • Classified information relating to defense articles and defense services • Information covered by an invention secrecy order • Software as defined in ITAR 121.8(f) directly related to defense articles

Definitions (Continued)Technical Data” defined by EAR 15 CFR §772: May take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals, and instructions written or recorded on other media or devices such as disk, tape, or read-only memories.

Definitions (Continued) An “Export” is defined in ITAR 22 CFR §120.17 as: • Sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data • 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 • 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) • Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad • Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad • A launch vehicle or payload shall not, by reason of the launching of such vehicle, be considered an export. However, for certain limited purposes, controls may apply to any sale, transfer, or proposal to sell or transfer defense articles or defense services

Definitions (Continued) “Export” is defined by EAR15 CFR §734.2(b) as: • An actual shipment or transmission of items subject to the EAR out of the United States, or release of technology or software subject to the EAR to a foreign national in the United States, as described in paragraph (b)(2)(ii) of the EAR, and paragraph (b)(9) for exports of encryption source code and object code software subject to the EAR.

Exclusions Applicable to Universities • Fundamental Research • Public Domain • Educational Information • Employment

Fundamental Research Exclusion Is defined in the EAR and ITAR as • Basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community • University research will not be considered fundamental research if: (i) The University or its researchers accept restrictions on publication of scientific and technical information resulting from the project or activity, or (ii) The research is funded by the U.S. Government and specific access and dissemination controls apply. • Foreign nationals may participate in research projects involving export-controlled information on campus in the US only, provided foreign person is not restricted by OFAC • Transfer of export-controlled information including “Materials” or “Items” abroad, even to research collaborators, is still prohibited

Exclusions (Continued) • Information that is in the Public Domain is not subject to export controls (ITAR) and (EAR) if already published through (a) Libraries open to the public, including most University libraries (b) Unrestricted subscriptions; news-stands, or bookstores (c) Published patents (d) Conferences, meeting minutes seminars, trade shows, or exhibits held in the US (ITAR) or anywhere (EAR) which are generally accessible to the public for a fee and without the hosts’ knowledge of or control of who visits or downloads software/information • Educational Exclusion from EAR and ITAR • Covers teaching to foreign nationals in the US or abroad general science, math , and engineering commonly taught in schools and Universities in formal course and in teaching laboratories of academic institutions – including information related to controlled Material or items • Does not cover controlled information conveyed outside the classroom or teaching lab of an academic institution

Exclusions (Cont.) • Employment exclusion may apply toindividuals who: (a) are full-time, bona fide university employees (b) have permanent addresses in the U.S. while employed (c) who are not nationals of embargoed or sanctioned countries http://www.treas.gov/offices/enforcement/ofac/programs/ And, (d) are advised in writing not to share controlled information with other foreign persons • Such persons are not considered foreign nationals under the ITAR

Policy • All Cal Poly employees and students involved with a potential export must: • Be aware of and comply with all policies, procedures, laws, and regulations concerning Cal Poly Export/Import activities • Ensure that no controlled information or equipment is shipped outside the United States except with a license from the Department of State and utilizing an approved carrier (unless an exclusion applies, such as for a laptop computer used for fundamental research and under owner’s control at all times) • Always determine nationality of all collaborators, who they work for, and where they are located, before engaging in any controlled activity It is the responsibility of staff and faculty to ensure student compliance

Policy (Continued) • Ensure NO shipments are made to a country subject to OFAC sanctions or embargoes • Not take chances or make assumptions, but consult with the Grants Development Office before engaging in Export/Import activities • Seek to protect the fundamental research exemption by negotiating the elimination of clauses that restrict • Publication • Access • Participation in research, teaching, or disclosure of results

Question Giving facility tours to students or employees of a foreign country may constitute an export. True or False?

Answer Giving facility tours to students or employees of a foreign country may constitute an export. Have your specific situation reviewed by the Grants Development Office Ensure tours do not contain access to areas that contain export controlled material or technologies

Question Once a license is obtained for exporting certain equipment, and all of the equipment on the license has been exported, there is no need to obtain additional licensing authority to export the same equipment in the future. True or False? True False

Answer Each situation must be reviewed by the department of state licensing authority even if you intend to export the same equipment in the future. False

Question You teach a graduate course on solid-state lasers which is listed in our course catalog. Many of the students are foreign persons. You need to obtain a license before this information is disclosed to foreign students? True False

Answer Release of information by instruction in catalog courses and course laboratories of academic institutions is not subject to EAR True False

Question You are traveling abroad to Germany as part of a Grant activity. Since it is not an embargoed country there are no restrictions on your travel. True False

Answer All faculty, staff and students traveling abroad must ensure and no encrypted software exists on your laptop, PDA or cell phone and that these items are used as tools of the trade only. True False

Export/Import Controls & Compliance Training for Faculty and Staff