Export Controls: What Are They and Why Do They Matter?

1. Export Controls: What Are They and Why Do They Matter? Office of Research Services Donald T. Deyo, Esq. Director, Corporate Contracts Clifford K. Weber, Esq. Associate Director, Corporate Contracts Office of Research Services

2. Export Controls – Goals for Today • Broad understanding of export controls – what they are • Why export controls are important • What questions you need to ask or issues you need to think about in completing transmittal forms for new projects • Whom to ask for advice in ORS Office of Research Services

3. Export Controls – What? • Regulations promulgated by various federal agencies under federal law to restrict, limit, curtail, or prevent exports of certain items to certain countries or individuals • Export Administration Regulations (EAR) Department of Commerce, Bureau of Industry and Security (BIS) • International Traffic in Arms Regulations (ITAR) Department of State, Directorate of Defense Trade Control (DDTC) Office of Research Services

4. Export Controls –Other Departments and Agencies • U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets • Nuclear Regulatory Commission, Office of International Programs – administers regulations related to nuclear materials Office of Research Services

5. Export Controls – Other Agencies and Departments • DEA – controlled substances and chemicals • EPA - waste • FDA – drugs and medical devices • Energy – nuclear and fossil fuels • Interior - wildlife • Defense – defense technologies Office of Research Services

6. Export Controls – History • Ancient – blockades- surrounding the enemy; prevent acquisition of aid, materials, support, and necessities to sustain the enemy • American – Revolution; 1775 • Modern – WWI and WWII • Today - Prevent acquisition of WMD; curtail and prevent export of technologies potentially useful to military adversaries and terrorists Office of Research Services

7. Export Controls – Why Do They Matter • War? Military Technology? Manufacturer? • Significant developments in technology occur everyday in Universities • Technologies increasingly may have dual uses – example - chemicals and pesticides • Where is access to technology easier and more open– through corporations, through military, or through universities? Office of Research Services

8. Export Controls – Why Do They Matter (2) • Black market • WMD Programs – university trained scientists and engineers • Post 9/11 World Office of Research Services

9. Export Controls – Why Do They Matter (3) • Regulatory Environment • Federal funding • Health Care and Medical Centers • Clinical research • Bayh-Dole • Grant management • Cutting edge research and technologies of concern • Globalization of research • Balance of open, free society with technology access and proliferation Office of Research Services

10. Export Controls – Why Do They Matter (4) • Advanced technologies which are increasingly developed at Universities subject of export controls • Export Controls applicable to research fields (not traditionally associated with the “military”) • life sciences (biological agents and toxins) • Materials science and engineering • Computer science (encryption technology) • Increased “globalization” of University Research • University Research dependency on Federal funding with increased compliance requirements Office of Research Services

11. Export Controls – What Matters • Technologies • People • Countries • Publication – freedom to publish • Our own campus and laboratories • *** Law Changes and Evolves – example 20 years ago versus now Office of Research Services

12. Export Controls – U.S. Department of Commerce • Enforced by the Department of Commerce through its Export Administration Regulations (EAR). List of controlled technologies is found in 15 CFR 774, Supplement I, and referred to as the Commodity Control List (CCL). Technologies with both commercial and military applications (chemicals, satellites, software, etc.) Office of Research Services

13. Export Controls – U.S. State Department • ITAR: Enforced by the Department of State under the International Traffic in Arms Regulations (ITAR). For a list of controlled technologies see 22 CFR 121.1. The controlled technologies are defense articles and related data and listed as the Munitions Control List (MCL). Examples would be explosives, rocket systems, etc. Office of Research Services

14. Export Controls – Treasury Department • U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets • List of countries changes – examples – Burma, Cuba, Iran, Iraq, North Korea, Sudan, Zimbabwe Office of Research Services

15. Export Controls - Related Laws - USA Patriot Act of 2001 - Public Health Security and Bioterrorism Preparedness and Response Act of 2002 • Restrictions on possession, use and access to biological agents, toxins and delivery systems • Persons defined as “restricted” cannot work with covered materials. Information on these matters and how researchers at Penn need to comply is available from Penn’s Office of Environmental Health & Radiation Safety (EHRS) Office of Research Services

16. Export Controls – So What? How do these laws impact research at Penn? Export Control Laws are laws which prohibit the unlicensed “export” of certain controlled technologies for reasons related to national security, treaty compliance, and trade agreement. If Penn research involves these controlled technologies, Penn may be required to get U.S. government approvals before allowing: • Foreign researchers and students in the U.S. (including at Penn!) or anyone outside the U.S. who participates in such research • The sharing of research results with persons who are not U.S. citizens or permanent residents • “Export” is defined very broadly as any oral, written, electronic or visual disclosure, shipment, transfer or transmission of a commodity, technology or software/codes. Note: Server access could be an export! Office of Research Services

17. Export Control Laws and Research at Penn • Export Controls present a challenge to the Penn research community • Export Controls are the law of the land • Failure to comply carries heavy fines and possible imprisonment • Compliance is not easy because export controls are complicated and confusing Office of Research Services

18. Export Control Laws and Research at Penn General Rule: Penn, its faculty, and employees may not export to some entities certain materials and information without a license from the U.S. Government, unless an exception applies Fortunately, the majority of research at Penn will be covered under an exception to the ECL requirements. What are the exceptions? Office of Research Services

19. Export Control Laws and Research at Penn EXCEPTIONS TO Export Controls: PUBLIC DOMAIN: publicly available information that: • is already published or will be published • results from “fundamental research” • is educational in nature (instructional courses and labs) • included in certain patent applications FUNDAMENTAL RESEARCH: exception that will cover most research at Penn. • Basic or applied research in science or engineering • at an accredited institution of higher learning in the U.S. • resulting information is ordinarily published and shared broadly in the scientific community Office of Research Services

20. Export Control Laws and Research at Penn BUT, University research will not qualify as fundamental research if the university accepts any restrictions on publication of the information resulting from the research, other than: 1. limited prepublication reviews by research sponsors to prevent inadvertent divulging of proprietary information provided to the researcher by the sponsor 2. limited review to ensure publication will not compromise patent rights of the sponsor Office of Research Services

21. Export Control Laws and Research at Penn • Contracts and Grants Impacted by Export Controls • Important Federal funding opportunities (Homeland Security, Cybersecurity) directly linked to Export Controls • Terms and conditions restricting access by foreign nationals or removing research from fundamental research exemption • Contract requirements form Corporate Sponsors on Export Controls • Tech Transfer Issues: disclosure/licensing of technologies to foreign nationals and material transfer agreements Office of Research Services

22. Export Control Laws and Research at Penn • Summary: • Review of what are the issues • ORS Web site • Call us • Don Deyo – (215) 573-9970 • Cliff Weber – (215) 898-9984 Office of Research Services