EXPORT COMPLIANCE BASICS

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EXPORT COMPLIANCE BASICS

• Elaine Major
• Director of Institutional Compliance
• Ext. 3452
• Mr. Paul DiVecchio
• DiVecchio Associates

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Overview

• Purpose of export controls
• Export regulations apply to all activities not
  just sponsored research
• Review definitions and regulations
• Identify high-risk disciplines
• Types of exclusions
• Clarify when regulations may apply
• Describe How to Comply when the Laws Apply

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Purpose of Export Controls

• US laws that regulate the distribution of
  strategic technology, services and information
  to foreign nationals and foreign countries for
  foreign policy and national security reasons
• Prevent terrorism
• Restrict access of certain goods and technology
  to military adversaries
• Initially focused on business but now academic
  environment, too

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What is an Export?

• Transmission of item out of the U.S. by
• Shipment
• Electronic or digital transmission
• Visual inspection in or outside the U.S.
• Written or oral disclosure
• Actual use or application on behalf or for
  benefit of foreign person or entity
• (Item commodity, software, or technology)

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Deemed Export

• Providing, transferring or disclosing controlled
  technology/information to a foreign national in
  U.S. by
• FAX, phone, email, face-to-face, tours of labs,
  trainings, or computer data
• Visa Sponsor Letters- consider purpose of visit
• Visa status is important
• Permanent resident (w green card) same rights as
  US citizen
• Non-immigrant visa holders must meet export
  control regulations (license may be required)

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High-Risk Disciplines

• Engineering
• Space Sciences
• Computer Science
• Biomedical Research with Lasers
• Research with Encrypted Software
• Research with Controlled Chemicals, Biological
  Agents, and Toxins

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Export Compliance Decisions
1. USE COMMON SENSE!!
Everybody Has it??
2. Document Decisions
Demonstrate your D2 Due Diligence
3. Abide by the Exporters Cardinal Rule
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ACCOUNTABILITY

• Knowledge includes not only actual knowledge of
  an event, but also an awareness of high
  probability of its occurrence.
• 
  Not this!
  
• So use all available information.Seek more
  information if you have suspicions.The US
  government would like to revise its regulations
  to say that you have knowledge of an event if a
  reasonable exporter would consider the event
  more likely than not.
• THIS WAS WITHDRAWN BY BIS REALLY?

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EVERYONE'S ACCOUNTABLE
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• What could happen?
• Substantial Fines
• 50k TO 250k IEEPA
• Negative Publicity
• Denial of Export Privileges
• Disruption of Business
• Jail Time

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TECHNOLOGY TRANSFERS TO FOREIGN NATIONALS

• Foreign nationals all EXCEPT
• U.S. Citizens
• U.S. Permanent Residents
• Persons granted refugee status or asylum in the
  U.S.
• If the tech data is controlled to the persons
  home country AND no License Exception is
  available, obtain a license

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Agencies Jurisdictions
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Defense Article

• Article or service specifically designed,
  developed, configured, adapted or modified for a
  military application
• Does not have predominant civil applications
• Does not have form/fit/function equivalence with
  article for civil applications
• Intended end use not relevant

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Other Considerations

• Defense article
• DOD Contract that specifies controlled
  technology
• Trade sanctions- focus on end-user
• Party is on a List
• Meets Fundamental Research Exclusion (FRE)
• Material is in Public Domain

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ITAR Exemptions EAR Exceptions

• ITAR Exemptions
• Public Domain
• Technical Data
• General Exemptions
• EAR Exceptions
• Public Domain
• Fundamental Research
• Government-Funded Research

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Fundamental Research Exclusion

• No license needed to disclose technical
  information to foreign nationals- if the results
  are ordinarily published and shared broadly
  within the scientific community
• Includes results from basic and applied research,
  transfer of information in classes or
  laboratories, at conferences, or in publications
• Exempt from licensing even if
• Prepublication review solely to insure no
  inadvertent release of proprietary information
• Under U.S. government grant with controlled
  technology with access and dissemination controls
  and university follows national security controls
  outlined in proposal

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Exclusion Destroyed IF...

• Contract clause is accepted that
• Forbids the participation of foreign persons
• Gives the sponsor the right to approve
  publications resulting from the research
• Restricts participation in research and/or access
  to and disclosure of research results
• Some technologies ineligible for FRE (ex.
  advanced encryption)
• Side Deals between a PI and Sponsor also destroys
  exclusion and may violate UML policies on
  openness in research

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Red Flags

• Restrictions-funding or publication
• Foreign sponsor
• Export of materials is expected
• Controlled Technology is noted in the contract
• Nondisclosure agreements re disclosure of U.S.
  proprietary information to foreign nationals
• Materials transfer agreements when materials or
  technology disclosed outside U.S. or to foreign
  parties
• Teaching that uses or implements licensed
  technology to a foreign entity
• Export-controlled information is furnished for
  use
• Countries under boycotts
• Anything involving India or China

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Where to Begin...

• Internal processing form
• Contact Compliance Officer for more information
  and to help determine
• Whether export regulations apply
• Jurisdiction (EAR, ITAR, OFAC)
• ECCN or to request classification
• Lists checked
• License application completed, if necessary
• Technology Control Plan developed, if applicable

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Commerce Control List Categories

• 0 Nuclear materials
• 1 Materials, Chemicals, Microorganisms, and
  Toxins
• 2 Materials Processing
• 3 Electronics
• 4 Computers
• 5 Telecommunications and Information Security
• 6 Lasers and Sensors
• 7 Navigation and Avionics
• 8 Marine
• 9 Propulsion Systems, Space Vehicles and
  Related Equipment

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Groups Within Each Category

• A Equipment, Assemblies and Components
• B Test, Inspection and Production Equipment
• C Materials
• D Software
• E Technology

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After the ECCN.....

• Check for license requirements and license
  exceptions
• Check Country Chart, Reasons for Control, and
  Country Group
• Check all lists
• Denied Persons
• Unverified
• Entity
• Specially Designated Nationals (SDNL)
• Debarred List
• Non-proliferation Sanctions
• General Order 3 to Part 736
• Determine whether you need a license

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Export Licenses

• Required prior to providing foreign nationals
  access to controlled technologies or materials.
  Since 9/11/01, export controls are increasingly
• Used as anti-terrorism tools
• Focused on universities and enforcement
• Focused on life sciences and biological materials

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License May be Required

• If exclusions do not apply
• Materials are defense, military, weapons, space
  or other dual-use technology
• Attending conference with limited registration
• Dealing with a sanctioned country and involves
  anything of value

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License Is Required

• Controlled technology, research equipment,
  biological samples, or computer with research
  data or encrypted or proprietary software
• Reason to believe recipient is violating laws
• Sharing controlled proprietary information with a
  foreign national in U.S. or abroad
• On List (check for other exceptions)

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Research Governed by Export Laws

• Laboratory space must be designated to isolate
  special procedures
• Logs used to manage access
• Access limited to only authorized personnel
• Computers secured and/or monitored
• Control student access
• Understand export control laws
• Develop Technology Control Plan

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What to Look For...

• Any restrictions on publication, disclosure,
  dissemination, or participation by the sponsor
• Mention of export control by the sponsor
• Export of an item is expected

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To Achieve Success.....

• UNIVERSITY TOP LEVEL COMMITMENT
• Classify products/technology
• Monitor Technology Transfer
• Export Compliance Policies (formal)
• Training/education for UML Personnel
• Integrate compliance process to all related
  systems within UML
• Automate the Compliance Program

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Summary

• If you are not sure or know you need a license
• Call Elaine at x3452 or
• Go to www.uml.edu/ora/institutionalcompliance