Export Controls 101: A Refresher

1. Export Controls 101:A Refresher Rosemary Ruff March 7, 2012

2. WHAT ARE EXPORT CONTROLS? • US laws that regulate the transfer of items, technology, software, and services to foreign persons • Export Administration Regulations (EAR, 15 CFR 730, U.S. Department of Commerce) – The Commerce Control List, everyday items that may have both military and commercial uses • International Traffic in Arms Regulations (ITAR, 22 CFR 120-130, U.S. Department of State) – U.S. Munitions List, items that were designed specifically for military use whether or not they will be used for military purposes

3. EXCLUSIONS FROM CONTROLS • Education • Information concerning general scientific, mathematical or engineering principles commonly taught in colleges or universities. Applies only to information released during catalog-listed courses at UA (through lectures, course materials, or instruction in laboratories) • Fundamental Research • Information arising during or resulting from basic and applied research in science and engineering at an accredited U.S. institution of higher learning where the resulting information is ordinarily published and shared broadly in the scientific community

4. EXCLUSIONS FROM CONTROLS • Public Domain • Information generally accessible to the public in any form, including information: • readily available at libraries open to the public or at university libraries • in patents and published patent applications available at any patent office • released at an open conference, meeting, seminar, trade show, or other open gathering • published in periodicals, books, print, electronic, or other media available for general distribution (including websites that provide free uncontrolled access) or for distribution to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline, either free or at a price that does not exceed the cost of reproduction and distribution

5. ARE THERE CLUES? • Many contractual terms can affect our “fundamental research exemption” • Restrictions on publications/information dissemination • Ownership of intellectual property • Restriction on employee participation • Explicit incorporation of statutory controls • Foreign sponsors • International travel or collaboration

6. WHAT’S AN EXPORT? • Physical transfers of items outside the U.S. • Electronic transfer (disks, RAM sticks, etc.) of software or technical data outside the U.S. • Release or disclosure of software or technical data to any foreign person by e-mail, Internet, phone/fax, in-person (oral communication), or visual inspection • Application of controlled data outside the U.S.

7. WHAT’S A DEEMED EXPORT? “Deemed Export” — A deemed export is when controlled technology is transferred and/or disclosed to a foreign person in the United States

8. WHAT IS A FOREIGN PERSON? • A U.S. Person is a person who is a U.S. citizen, a U.S. legal permanent resident (“green card” holder) or an asylee/refugee under Federal regulation. • A U.S. corporation, partnership, trust, society or other entity incorporated or organized to do business in the United States is also a U.S. Person. • Everyone else is a Foreign Person. F-1, J-1, H-1B, O-1 visa holders are Foreign Persons!

9. CLUES TO CONTROL ISSUES • Award document contains restrictions on publications, e.g., require prior approval before publishing or presenting publicly • Award document contains restrictions on the project personnel, e.g., only U.S. citizens • There is a confidentiality agreement in place • Proposal Routing Form (export control or foreign sponsor) • RSSP notifies you that the project is controlled

10. ARE CONTROLS STRICT? Absolutely! • ITAR • Almost all ITAR activities require a license from the US Govt. prior to engaging in the controlled activity. • Even proposal information may be controlled. • EAR • Items controlled by EAR are controlled by country of origin of the foreign person(s)

11. WHAT ARE THOSE REGULATIONS AGAIN? • Export Administration Regulations (EAR, 15 CFR 730, U.S. Department of Commerce) • International Traffic in Arms Regulations (ITAR, 22 CFR 120-130, U.S. Department of State)

12. WHAT IS A MUNITIONS CATEGORY? • Firearms, Close Assault Weapons and Combat Shotguns • Guns and Armament • Ammunition/Ordnance • Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines • Explosives, Propellants, Incendiary Agents, and their Constituents • Vessels of War and Special Naval Equipment • Tanks and Military Vehicles • Aircraft and Associated Equipment • Military Training Equipment • Protective Personnel Equipment • Military Electronics • Fire Control, Range Finder, Optical and Guidance and Control Equipment • Military Electronics • Fire Control, Range Finder, Optical and Guidance and Control Equipment • Auxiliary Military Equipment • Toxicological Agents and Equipment and Radiological Equipment • Spacecraft Systems and Associated Equipment • Nuclear Weapons, Design and Testing Related Items • Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated • Directed Energy Weapons • [Reserved] • Submersible Vessels, Oceanographic and Associated Equipment • Miscellaneous Articles

13. WHAT IS AN ECCN? Export Control Classification Number Export Control Categories 0 = Nuclear materials, facilities and equipment (and miscellaneous items)1 = Materials, Chemicals, Microorganisms and Toxins2 = Materials Processing3 = Electronics4 = Computers5 = Telecommunications and Information Security6 = Sensors and Lasers7 = Navigation and Avionics8 = Marine9 = Propulsion Systems, Space Vehicles, and Related Equipment Five Product Groups A. Systems, Equipment and ComponentsB. Test, Inspection and Production EquipmentC. MaterialD. SoftwareE. Technology Category 1, Product Group C 1C351 Human and zoonotic pathogens and toxins

14. MUST CONTROLLED ITEMS HAVE A LICENSE? • Not necessarily – CCL (EAR) is country dependent Consult the Country Chart and the ECCN • USML (ITAR) is not country dependent • Most of what we do falls under exemptions —Fundamental Research, Public Domain, or Educational Information

15. ARE THERE OTHER CONTROLS? • Treasury Department – Office of Foreign Assets Control • Implements and oversees economic and trade sanctions against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction • Certain countries and activities are “sanctioned” http://www.treas.gov/offices/enforcement/ofac/programs/

16. PENALTIES FOR ITAR NON-COMPLIANCE • Criminal Sanctions: • Individual - A fine of up to $1,000,000 or up to ten years in prison, or both, for each violation. • Civil Sanctions: • Individual - A fine of up to $500,000 for each violation. The university may be subject to additional financial penalties. Do not depend upon sovereign immunity protections for personal liability.

17. PENALTIES FOR ITAR NON-COMPLIANCE • Criminal Sanctions: • Individual - A fine of up to $1,000,000 or up to ten years in prison, or both, for each violation. • Civil Sanctions: • Individual - A fine of up to $500,000 for each violation. The university may be subject to additional financial penalties. Do not depend upon sovereign immunity protections for personal liability.

18. UA RESPONSIBLE PARTIES • Investigators • Technicians/lab managers • Secretarial/Clerical • Students • Custodians/Facilities Workers OK – now that I have your attention… violation of export controls is a personal, criminal liability.

19. Tier 1 RESPONSIBILITIES • Investigators – • Assess all research activities, sponsored and unsponsored, to identify and classify controlled technology • Develop export control plan • Document training to all laboratory staff and students • Monitor access to all research facilities/ technology/information to ensure proper control • Ensure that controlled technology is not released without an export license • Notify RSCP of all potential export violations within 24 hours of discovery

20. TIER 2 RESPONSIBILITIES • RSSP – review proposals and awards to assist investigators with identification and management of controlled activities • RSCP – assist investigators with identification/ classification controlled items/activities, apply for licenses, seek advisory opinions, provide training opportunities • Office of General Counsel – review classification of controlled activities — may refer to external counsel* if unable to definitively classify an item * Investigator/Unit is responsible for all costs incurred for external opinion.

21. Tier 3 Responsibilities Administrators can assist investigators as needed to ensure that appropriate controls are in place. Some examples: • Identify immigration status of all project personnel upon project inception • Do not process payroll assignments without checking export control status of project • Maintain security of research facilities and technology, e.g., don’t “unlock the lab door” or provide copies of proposals, reports, etc. without approval • Ask Procurement to request that suppliers provide ECCNs • Assist with identification of foreign visitors and foreign travel

22. PENALTIES FOR EAR NON-COMPLIANCE • Criminal Sanctions: • "WILLFUL VIOLATIONS“ • University - A fine of up to the greater of $1,000,000 or five times the value of the exports for each violation; • Individual - A fine of up to $250,000 or imprisonment for up to ten years, or both, for each violation. • "KNOWING VIOLATIONS" • University - A fine of up to the greater of $50,000 or five times the value of the exports for each violation; • Individual - A fine of up to the greater of $50,000 or five times the value of the exports or imprisonment for up to five years, or both, for each violation.

23. Visual Compliance from eCustoms • Identify and catalog controlled items, especially laboratory equipment • Keep track of foreign travel by UA faculty, staff and students • Keep track of foreign visitors

24. EQUIPMENT PURCHASES • Who will initiate records? • Existing • New • Who will update location, disposal, etc.? • Can/should we integrate this with our current AIMS system to eliminate duplicate data entry and records?

25. FOREIGN TRAVEL AND VISITORS • Who will initiate records? • Who should be on the review chain? • Approval or review? • How will we handle visitors?