Title: EXPORT CONTROLS: A UNIVERSITY CHALLENGE
1EXPORT CONTROLS A UNIVERSITY CHALLENGE
- Kay Ellis
- Oklahoma State University
- (405) 744-9995
- mkellis_at_okstate.edu
- http//www.research.okstate.edu
2TOPICS TO BE COVERED
- Overview of the basic regulations
- The fundamental principles, including the need to
publish - Use of foreign nationals
- Issues related to dissemination/access
- Working with the EARs
- Licensing the technology
3WHY REGULATIONS WERE IMPOSED
- Prevent terrorism
- Restricts exports of goods and technology that
could contribute to the military potential of
adversaries - Restricts exports of goods and technology that
could hamper U.S. economic vitality - Prevent proliferation of weapons of mass
destruction
4THE ISSUES
- Culture of free exchange and sharing
- Culture of nationality blindness
- Institutions generally decentralized and
ill-adapted to controls and restrictions - Regulations hopelessly complicated, frequently
changed - Licensing takes time and interrupts research
- Departments of State/Commerce auditing
universities for export control policies
5OVERVIEW
- Export controls cover
- Any item in U.S. trade (goods, technology,
information) - U.S. items wherever located, even internationally
- Deemed exports
- Excludes
- Items in the public domain
- Artistic or non-technical publications (maps,
childrens books, sheet music, calendars, film)
6THE BASIC REGULATIONS
- International Traffic in Arms Regulations (ITAR)
22 CFR Ch.1 Part 120) - U.S. Munitions List (USML) enumerates the defense
articles and services which are controlled - Based primarily on whether an article or service
is deemed to be inherently military in character - Licensing handled by the Directorate of Defense
Trade Controls (DDTC)
7THE BASIC REGULATIONS
- Export Administration Regulations (EAR)
- 15 CFR Parts 730-774)
- -The Commerce Control List (CCL) contains
commodities, technology, and software subject to
the EAR identified by an Export Classification
Control Number (ECCN) - - Licensing handled by Bureau of Industry and
Security (BIS), formerly BXA - The inherent capabilities and design, not the end
use, determines whether the item falls under the
ITAR or the EAR -
8DIFFERENCES BETWEEN ITAR AND EAR
- ITAR
- covers military items (munitions and defense
articles) - Includes most space related technologies because
of application to missile technology - Includes technical data related to defense
articles and services (furnishing assistance
including design and use of defense articles) - Very strictnot much latitude, few exemptions
9DIFFERENCES BETWEEN ITAR AND EAR
- EAR
- Covers dual use items
- Regulates items designed for commercial purposes
but that can have military applications
(computers, pathogens, civilian aircraft, etc.) - Covers both the goods and the technology
- DOC easier to work withmore exemptions available
10DIFFERENCES BETWEEN ITAR AND EAR
- ITAR proscribed list/sanctions (the T-7s)
- Differ on ordinarily publishable (EAR) vs.
published (ITAR) - ITAR has stricter proprietary review concerns
11KEY ISSUES FOR UNIVERSITIES
- Public Domain
- Fundamental Research Exemption
- Deemed Exports
12PUBLIC DOMAIN
- Includes information that is published and
generally available to the public - Through sales at bookstands and stores
- Through subscriptions available without
restrictions - At libraries open or available to the public
- Through patents
- Through unlimited distribution at a conference,
meeting seminar, trade show, generally accessible
to the public in the U.S. - Includes technology and software that are
educational and released by instruction in
catalog courses and associated labs and
Universities
13NSDD-189
- 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.
14NSDD-189
- To the maximum extent possible, the products of
fundamental research should remain unrestricted.
Where national security requires control, the
mechanism for control of information generated
during federally-funded research in science,
technology and engineering at colleges,
universities and laboratories is classification.
15DEEMED EXPORTS
- Export controls cover transfers of good and
technology within the U.S. to a foreign national
who is not a U.S. citizen or permanent resident
(green card holders) - Applies to technology transfers under the EAR and
ITARs technical data and defense services - Unless the fundamental research exemption
applies, a universitys transfer of controlled
technology to a non-permanent resident foreign
national may be controlled and/or prohibited - Non-immigrant visa holders must satisfy export
controls (license may be required) - Examples - Visual inspection, E-mails, oral
exchanges of information
16ITAR AND THE FUNDAMENTAL RESEARCH EXEMPTION
- Fundamental research exemption recognized, but
limited, given jurisdiction over goods and
technologies designed to kill - Covers information which is published and which
is generally accessible or available to the
public through a number of mechanisms including - Unrestricted publications
17ITAR AND THE FUNDAMENTAL RESEARCH EXEMPTION
- At an accredited institution of higher learning
in the U.S. where the information is ordinarily
published and shared broadly in the scientific
community - Excludes information restricted for proprietary
reasons or by specific government access and
dissemination controls
18ITAR AND THE FUNDAMENTAL RESEARCH EXEMPTION
- Poses three significant issues
- Ordinarily publishable or published
- Proprietary information of sponsor
- Access or dissemination control
19EAR AND THE FUNDAMENTAL RESEARCH EXEMPTION
- Exemptions significantly broader than ITAR
- Prepublication review for inadvertent proprietary
material does not trigger license - Prepublication review by a corporate sponsor or
other restrictions on the publication of
scientific and technical information generally
invalidates the exemption - Access and dissemination controls normally do not
trigger license as long as university follows
national security controls imposed in the award - Some technologies (advanced encryption)
ineligible for fundamental research exemption and
require licenses
20APPLICATION TO RESEARCH
- Office of Foreign Assets Control (OFAC) May
limit transfer of technology/assistance to OFACs
list of embargoed countries - May need EAR or ITAR license before approved
- Recently ruled providing editing services to a
person/journal from embargoed country requires a
license - Includes university agreements as well as
arrangements between faculty members
21APPLICATION TO RESEARCH
- Export of research products
- Underwater research vehicle could require ITAR
license if designed for military applications
would require Commerce Department authorization
if designed for civilian purposes - Temporary transfer of research equipment abroad
- Carrying scientific equipment to certain
destinations for research may require
authorization (e.g., Iran Syria, China, etc.)
22APPLICATION TO RESEARCH
- Software development
- Software that is provided to the public for free
may not require licenses, but proprietary
software of controlled technology could require
licensing - Encryption technology could require licenses or
could be prohibited for transfers to certain
foreign nationals/countries
23APPLICATION TO RESEARCH
- Government grants may limit access by foreign
nationals - for any foreign nationals working on the project
- determining whether a restriction is a specific
access and dissemination control under the ITAR
(which would invalidate the fundamental research
exemption) particularly problematic - Restrictions on certain foreign nationals
Agencies may preclude or limit access by foreign
nationals to research based on the export control
laws - May require prior approval
- Under ITAR, no license available if a foreign
national is from an embargoed country
24APPLICATION TO RESEARCH
- Corporate grants may limit access by foreign
nationals - Proprietary restrictions or restrictions on
publication by corporate grant may invalidate
fundamental research - Includes MTAs, Non-disclosure agreements
- Try to remove restrictive clauses from
agreements!!!! - Conferences
- Potential restrictions on participants
- Inability to co-sponsor with certain countries or
groups (e.g., restrictions on co-sponsoring
conference with Iranian government) - Transfer of defense services
- Potential license requirements for work with
foreign nationals
25DETERMINING THE NEED FOR A LICENSE
- QUESTIONS TO ASK
- 1. What is the nationality of researchers
INCLUDING both Professors and Research Assistants
(grad students/post-docs)? - 2. Will the results be publicly available?
- 3. Will there be restrictions?
- a) on publications
- b) on access
- c) on dissemination
- d) on proprietary information
26DETERMINING THE NEED FOR A LICENSE
- QUESTIONS TO ASK
- 5. Will I be receiving any restricted
information? - 6. Destination Is the research going
overseas to a foreign company, government or
individual? - 7. What do the end-users intend to do with the
research results?
27DETERMINING THE NEED FOR A LICENSE
- STEPS TO TAKE
- Classify the technology or goods involved (ITAR,
EAR, OFAC, other?) - Determine if license is needed for the
technology/end user/end use - Determine if license exemption is available
(public domain, fundamental research, EAR
exemption from CCL, etc.) -
28DETERMINING THE NEED FOR A LICENSE
- Determine whether embargoes, prohibited parties,
or destinations are involved - If no exemptions, determine what kind of license
is needed - Technical Assistance Agreement
- DSP-5
- Deemed Export License (EAR)
- License
29DETERMINING THE NEED FOR A LICENSE
- Apply promptly, licensing can take months!!
- OURS website export control links
http//www.research.okstate.edu - ITAR (State) requirements available at
- http//www.pmdtc.org
- EAR (Commerce) requirements available at
http//www.bis.doc.gov - OFAC (Treasury) requirements available
http//www.treas.gov/offices/eotffc/ofac/
30THE EAR PROCESS IF EAR APPLIES, WHAT NEXT?
- STEP 1 PI must classify the type of technology
or science being developed on the Commerce
Control List by determining the ECCN Export
Control Classification Number - http//w3.access.gpo.gov/bis/ear/ear_data.html
31COMMERCE CONTROL LIST
- Contains lists of items subject to licensing
authority of BIS - Each entry is called Export Control
Classification Number (ECCN) - (Five alpha-numeric characters)
- Items listed in terms of technical parameters
32ECCN BREAKDOWNEXAMPLE 3D101
- 3 Category
- D Product Group
- 1 Reason for Control
- 0 Relates to Reasons for Control
- 1 Used for Numerical Ordering
33TEN CATEGORIES IN THE CCL (0 - 4)
- 0. Nuclear Materials, Facilities Equipment
Miscellaneous - 1. Materials, Chemicals, Microorganisms
Toxins - 2. Materials Processing
- 3. Electronics Design, Development and
Production - 4. Computers
34TEN CATEGORIES IN THE CCL (5 9)
- 5. Telecommunications Information Security
- 6. Sensors and Lasers
- 7. Navigation and Avionics
- 8. Marine (ships vessels)
- 9. Propulsion Systems, Space Vehicles and
Related Equipment
35PRODUCT GROUPS
- A Equipment, Assemblies Components
- B Production, Test Inspection Equipment
- C Materials (raw)
- D Software
- E Technology
36FINDING THE ECCN
- Review general characteristics (technical
parameters) of items (research) to arrive at
Category and Product Group - Match characteristics of item with ECCN and
subparagraph - HINT Check the CCL alphabetical index
37GENERAL PROHIBITIONS, PART 736
- STEP 2 Check General Prohibitions
- Prohibit certain exports, re-exports, and other
conduct, without a license, license exception or
determination that no license is required - General Prohibitions 1-10 apply to items having a
specific ECCN - General Prohibitions 4-10 apply to items that are
EAR99 (not found on the CCL)
38GENERAL PROHIBITIONS 1-3
- Apply only if your item is classified under an
ECCN - Export and re-export of controlled items to
listed countries - Re-export and export from abroad of foreign-made
items incorporating more than a de minimis amount
of controlled U.S. Content - Re-export and export from abroad of the foreign
produced direct product of U.S. technology and
software
39GENERAL PROHIBITIONS 4-10
- Apply if your item is classified under a
specific ECCN or is EAR 99 (items not found on
the CCL- usually no license required) - Engaging in actions prohibited by a denial order
(check denied persons list) - Export or re-export to prohibited end-uses or end
users (e.g., chemical and biological warfare) - Export or re-export to embargoed or special
destinations - Support of proliferation activities
40GENERAL PROHIBITIONS, Continued
- Intransit shipments and items to be unladen from
vessels or aircraft - Violation of any order, terms, and conditions
- Proceeding with transactions with knowledge that
a violation has occurred or is about to occur - If Prohibitions dont apply, look for Exceptions
41LICENSE OR EXCEPTION UNDER EAR?
- STEP 3 Try to find the exception!
- Using the CCL check reasons for control Look at
the Reason for Control section directly under
the category heading and License Requirements.--
E.g. Reason for control NS, MT, AT - Match specific controls to Country Chart column
- Look for an X in Commerce Country Chart
42LICENSE OR EXCEPTION UNDER EAR, Continued
- If an X is present, look under the License
Exceptions category below the Control(s)
section - If no license exception available, license must
be obtained (4-6 weeks to process)
43REASON FOR CONTROL
- AT Anti-Terrorism
- CB Chemical Biological weapons
- CC Crime Control
- CWChemical Weapons Convention
- EI Encryption Item
- FCFirearms Control
- MTMissile Technology
- NPNuclear Proliferation
- NSNational Security
- RSRegional Stability
- SISignificant Item
- SSShort Supply
- UNUnited Nations
- XPComputers
44COMMON LICENSE EXCEPTIONS
- LVS Limited Value Shipments
- Pertains to Country Group B
- Identified by LVS (value) on the CCL (e.g.
LVS 5000) - GBS Country Group B
- Identified by GBS Yes on the CCL
- CIV Civil End-Users
- Pertains to Country Group D-1
- Identified by CIV Yes on the CCL
- National Security controlled items only
45COMMON LICENSE EXEPTIONS
- TSR Restricted Technology and Software
- Pertains to Country Group B
- Identified by TSR Yes on the CCL
- National Security Controlled Items only
- Written Assurance Letter can be written stating
software will not be released to nationals of
certain country groups (e.g. D1 and E2)
46SANCTIONS FOR NONCOMPLIANCE
- ITAR
- Criminal Up to 1 million per violation and 10
years imprisonment - Civil seizure and forfeiture of article,
revocation of exporting privilege, up to 500,000
fine per violation
47SANCTIONS FOR NONCOMPLIANCE
- EAR
- Criminal 50K to 1 million or 5 times value of
export, whichever is greater, per violation, 10
years imprisonment - Civil revocation f exporting privilege, fines
10K-120K per violation - OFAC
- Criminal up to 1 million per violation and 10
years imprisonment - Civil 12 K to 55 K per violation
48UNIVERSITY/PI RESPONSIBILITIES
- Work with the staff in your college
- Review your research for potential EAR/ITAR
issues dont wait until the contract arrives! - Classify research - find ECCN (EAR) and/or check
Munitions List (ITAR) - If you are planning to hire a foreign national,
check the regulations to see if a license may be
required - At the contract stage, check for restrictive
clauses that would eliminate the Fundamental
Research exemption
49UNIVERSITY/PI RESPONSIBILITIES
- Document exemptions
- Records must be kept 5 years (license valid 2
years) - Apply for a license BEFORE project
begins--process can take 2-6 months or longer! - Honest errors are acceptable but gross negligence
is punishable - Violations are civil and criminal---Fines and
jail time!!!
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