Export Control Basics

1
Export Control Basics

• James E. Peterson, Ph.D.
• Associate Vice Chancellor for Research
• Office of Sponsored Research

2
What are Export Controls?

• A comprehensive series of regulations enforced by
  the Federal Government that regulate the
  distribution of certain exports to foreign
  nationals and foreign countries because of
• the nature or type of technology has potential
  military applications
• the nature or type of technology raises some sort
  of trade/economic protection issue
• concerns about the country, organization,
  individual or end user of the technology

3
What are Export Controls?

• Export control laws apply to all activities not
  just sponsored research projects
• Control involves obtaining a license from the
  federal government prior to exporting

4
What is an export?

• Transfer to a foreign person in the U.S. or
  abroad of
• Controlled technology
• Information
• Equipment
• Software
• Services

5
What is a transfer?

• Transfer can be by
• Actual shipment outside the U.S.
• 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

6
What is a deemed export?

• Transmitting the technology, information, etc.
  to a foreign person within the United States
• Methods of disclosure include

• Tours of labs
• Training sessions
• Computer data

• FAX
• Telephone conversations
• E-mail communications
• Face-to-face discussions

7
Who is a foreign person?

• Any person who is not a lawful permanent resident
  of the U.S.
• Any foreign corporation or other entity or group
  that is not incorporated or organized to do
  business in the U.S.
• Any foreign government

8
Responsible U.S. Agencies

• STATE
• International traffic in Arms Regulations (ITAR)
• for inherently military technologies
• COMMERCE
• Export Administration Regulations (EAR)
• for Dual Use technologies
• TREASURY
• Office of Foreign assets Control (OFAC)
• prohibits transactions with countries subject to
  embargo, boycott or trade sanctions

9
ITAR

• U.S. Munitions List
• http//www.pmdtc.org/reference.htmITAR
• Defense articles, defense services and related
  technical data
• Divided into 21 categories
• GPS equipment
• Toxicological agents
• Country Control Chart
• http//www.pmdtc.org/country.htm

10
EAR

• Commodity Control List
• http//www.access.gpo.gov/bis/ear/ear_data.html
• Part 738
• Primarily commercial
• 11 different categories
• Computers
• Lasers
• Microorganisms/toxins
• Country List
• http//www.access.gpo.gov/bis/ear/ear_data.html
• Part 783 SPIR
• 15 pages country vs category reason for control

11
OFAC

• Embargoed Countries
• http//www.treas.gov/offices/eotffc/ofac/sanctions
  /index.html
• List can change but today includes
• Cuba, Iran, Iraq, Libya, Liberia, Sudan, North
  Korea, Syria
• Difficult to do anything with these countries

12
Penalties for ITAR

• Criminal
• Up to 1 million for a university or company
• Up to 1 million per violation for individuals
  and/or up to 10 years in prison
• Civil violations
• Up to 500,000 / violation for individuals, a
  university or company
• Seizure of articles
• Revocation of exporting privileges

13
Penalties for EAR

• Criminal
• Up to 1 million for a university or company
• Up to 250,000 / violation for individuals and/or
  up to 10 years in prison
• Civil
• Loss of export privileges
• Up to 12,000 / violation for individuals, a
  university or company

14
Penalties for OFAC

• Criminal
• Maximum fine of 100,000 for individuals and/or
  10 years imprisonment
• Maximum fine of 1 million for a university or
  company
• Civil
• Maximum fine of 55,000 / violation
• Violations of specific sanctions may add
  additional penalties

15
Implications of Export Control Laws

• No effect on most university research because we
  qualify for one of the exclusions
• Potential impact on
• Ability of foreign students or researchers to
  participate in research involving a controlled
  technology
• Ability to provide services (including training)
  to foreign persons
• Ability to send controlled equipment to foreign
  countries

16
Exclusions

• A license is not required to disseminate
  information if one of three exclusions applies
• Fundamental Research (ITAR, EAR)
• Employment (ITAR only)
• Education (ITAR, EAR)

17
Fundamental Research Exclusion

• No license is required to disclose to foreign
  persons information that is published and
  generally available or accessible to the public.
  Basic or applied research in science or
  engineering at universities where the resulting
  information is ordinarily published and shared
  broadly in the scientific community.

18
Fundamental Research Normally

• Unless the university accepts any clause that
• forbids the participation of foreign persons
• gives the sponsor a right to approve publications
• restricts participation in research and/or access
  to and disclosure of research results
• Unless there are side deals between PI and
  sponsor regarding publishing

19
Employment Exclusion

• No license is required to share controlled
  technical information with a foreign person who
• is a full-time regular university employee
• has permanent address in the U.S. while employed
  provided that the person is
• not a national of a country to which exports are
  prohibited
• advised in writing not to share controlled
  information with other foreign persons
• does not apply to graduate students

20
Education Exclusion

• No license is required to share with foreign
  persons information concerning general
  scientific, mathematical or engineering
  principles commonly taught in universities or
  information in the public domain.
• Foreign students using controlled equipment to
  conduct research should be registered for a
  research credit class.

21
Questions from the UNC-CH IPF
22
Is it Really a Can of Worms?
Reasons for the 4 Questions

• Educate PIs and staff on export control
  regulations
• Screen proposals to determine if there may be a
  problem
• Basis for compliance if proposal is funded

23
Things to Watch For

• Restrictions on publications
• Side Deals
• Providing services or new information materials
  to/from a boycotted country
• Collaborating with foreign colleagues in foreign
  countries
• Foreign Nationals in the U.S.
• Travel outside the U.S.
• Carrying equipment/samples outside the U.S.
• Shipping equipment/samples overseas
• Payments to certain countries
• Accepting export controlled information

24
Resources

• OSR web site on Export Control
• http//research.unc.edu/osr/policies/
  export_control.php