Export Control Regulations

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Export Control Regulations

• Overview for Research Administration Personnel

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Why Is Compliance Important?

• Possibility of Substantial Fines and Imprisonment
  for Violators
• Civil Criminal Penalties, for the Individual
  and the Institution
• Loss of Export Privileges
• Limiting participation of foreign nationals in
  University research is not realistic and contrary
  to policy
• Bad Publicity

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Export Controls in a Nutshell
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Three U.S. Export Licensing Programs
U.S. Department of State (Office of Defense Trade
Controls) controls defense articles, defense
services, and related technical data, including
most space-related articles.
U.S. Department of Commerce (Bureau of Industry
and Security) controls dual-use items goods
and technology with both civilian and
military/strategic uses.
U.S. Department of the Treasury oversees U.S.
trade embargoes (Office of Foreign Assets
Control) and enforces all three programs at U.S.
borders through U.S. Customs Service.
Cuba
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Law and Regulations
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What Is an Export?ITAR 120.17, EAR 734.2(b)

• An actual shipment or transmission of items
  subject to the EAR or ITAR out of the United
  States
• Disclosing (including oral or visual disclosure)
  technical data or technology (including
  software source code) to a foreign person,
  whether in the United States (deemed export) or
  abroad
• Performing technical assistance, training, or
  other defense services for, or on behalf of, a
  foreign person, (including foreign
  corporations) whether in the United States
  (deemed export) or abroad
• Reexporting from foreign countries U.S.-origin
  goods or technical data, goods incorporating U.S.
  components, or goods manufactured from U.S.
  technology or reexporting U.S.-origin technical
  data or software

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EXAMPLES OF EXPORTS

• Physical Shipments or Hand Carry
• Release of technical data or software in a
  foreign country
• Release of Source Code to a foreign national in
  the US
• Release of Technical Data to a foreign national
  in the US
• Inspections of U.S. Equipment and Facilities by a
  Foreign National
• Demonstrations, Meetings, and Training

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U.S. and Foreign PersonsITAR 120.15 16, EAR
772.1

• U.S. Person means
• a Lawful Permanent Resident (8 USC 1101 (a)(20))
• U.S. Citizen or national
• Legal immigrant with a green card
• a Protected Individual under the INA (8 USC
  1324(b)(3))
• designated an asylee or refugee
• a temporary resident under amnesty provisions
• but does not include Protected Individuals who
• fail to apply for citizenship within 6 months of
  becoming eligible
• have not been naturalized within 2 years after
  applying
• any entity incorporated to do business in the
  United States
• Foreign Person means everyone else
• includes foreign businesses not incorporated in
  the U.S.
• EAR does not use the term Foreign Person,
  instead refers to foreign national, exempting
  Protected Individuals (See EAR 734.2(b)(ii))

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U.S. Munitions List (USML)

• I - Firearms
• II - Artillery Projectors
• III - Ammunition
• IV - Launch Vehicles, etc...
• V - Explosives, Propellants, Incendiary Agents
  and Their Constituents
• VI - Vessels of War and Special Naval Equipment
• VII - Tanks and Military Vehicles
• VIII - Aircraft and Associated Equipment
• IX - Military Training Equipment
• X - Protective Personnel Equipment
• XI - Military Electronics
• XII - Fire Control, Range Finder, Optical and
  Guidance and Control Equipment

• XIII - Auxiliary Military Equipment
• XIV - Toxicological Agents and Equipment and
  Radiological Equipment
• XV - Spacecraft Systems and Associated Equipment
• XVI - Nuclear Weapons Design and Related
  Equipment
• XVII - Classified Articles, Technical Data and
  Defense Services Not Otherwise Enumerated
• XVIII - Reserved
• XIX - Reserved
• XX - Submersible Vessels, Oceanographic and
  Associated Equipment
• XXI - Miscellaneous Articles

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Commerce Control List (CCL)

• Category 0 - Nuclear Materials, Facilities and
  Equipment and Misc.
• Category 1 - Materials, Chemicals, Microorganisms
  and Toxins
• Category 2 - Materials Processing
• Category 3 - Electronics
• Category 4 - Computers

• Category 5 - Telecommunications and Information
  Security
• Category 6 - Lasers and Sensors
• Category 7 - Navigation and Avionics
• Category 8 - Marine
• Category 9 - Propulsion Systems, Space Vehicles
  and Related Equipment

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Examples of Items Covered by Category 3 -
Electronics

• Category Example
• Systems, Equip, Mass Spectrometers
  Oscilloscopes
• Components
• Test, Inspection, Equipment for the
  manufacturing of production Prod Equip
  semiconductor devices or material
• Materials Hetero-epitaxial materials consisting
  of a substrate having stacked epitaxially
  grown multiple layers of silicon,
  germanium,or compounds of gallium or
  indium
• Software Computer-aided design software designed
  for semiconductor devices or integrated circuits
  having any of the following design rules or
  circuit verification rules, simulation of the
  physically laid out circuits, or lithographic
  processing simulators for design
• Technology Technical data for the development of
  production of any of the above items

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Technical Data TechnologyITAR 120.10, EAR 772.1

• ITAR 120.10 defines technical data as
• Information . . . required for the design,
  development production, manufacture, assembly,
  operation, repair, testing, maintenance, or
  modification of defense articles.
• Invention covered by an invention secrecy order
• Software directly related to defense articles

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Technical Data TechnologyITAR 120.10, EAR 772.1

• EAR 772.1 defines technology as
• Specific information necessary for the
  development, production, or use of a
  product. The information takes the form of
  technical data or technical assistance.
• Technical assistance may take forms such as
  instruction, skills training, working knowledge,
  and consulting services and may involve transfer
  of technical data.
• Technical data may take forms such as
  blueprints, plans, diagrams, models, formulae,
  tables, engineering designs and specifications,
  manuals and instructions written or recorded on
  other media or devices such as disk, tape,
  read-only memories.

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Technical Data TechnologyITAR 120.10, EAR 772.1

• What is not technical data or technology
• Publicly available technical data and software
• Published for sale, in libraries open to the
  public, or through patents available at any
  patent office
• General scientific, mathematical, or engineering
  principles commonly taught in colleges and
  universities
• Through unlimited distribution at a conference,
  meeting, seminar, trade show, or exhibition
  (provided no previous government or industry
  restrictions on distribution applied)
• Arise during or result from fundamental research,
  where no restrictions on publication or access
  accepted
• Non-technical contract or business documents

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National Security Decision DirectiveNSDD-189

• In September 1985, the Reagan Administration
  issued NSDD-189 in which it established the
  following policies
• To the maximum extent possible, the products of
  fundamental research should remain unrestricted.
• Where the national security requires control, the
  mechanism for control of information generated
  during Federally-funded fundamental research in
  science, technology, and engineering at colleges,
  universities, and laboratories is classification.
• No restriction may be placed upon the conduct or
  reporting of Federally-funded fundamental
  research that has not received national security
  classification, except as provided in applicable
  U.S. statutes.
• President Bushs National Security Advisor,
  Condoleezza Rice, reaffirmed NSDD-189 in November
  2001.

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National Security Decision DirectiveNSDD-189

• NSDD-189 defined fundamental research as
• Basic and applied research in science and
  engineering, the results of which ordinarily are
  published and shared broadly within the
  scientific community.
• It is distinguished from research which results
  in information which is restricted for
  proprietary reasons or pursuant to specific U.S.
  Government access and dissemination controls.

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National Security Decision DirectiveNSDD-189

• NSDD-189s definition of fundamental research
  is reflected throughout the ITAR and EAR in
  terms of what research is subject to export
  controls.
• Avoiding restrictions on access and dissemination
  of research findings in contracts with the U.S.
  Government and industry is a key strategy for
  minimizing export control issues in university
  and research laboratory settings.

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Key EAR Exceptions

• EAR 734.3(b) What is not subject to the EAR?
• Publicly available technology and software,
  except software controlled for EI (encryption)
  under ECCN 5D002 that
• Are already published or will be published EAR
  734.7
• Arise during, or result from, fundamental
  research EAR 734.8
• Are educational EAR 734.9
• Are included in certain patent applications EAR
  734.10
• See Supplement No. 1 to Part 734 for extensive
  explanatory questions and answer regarding what
  is not subject to the EAR in the context of
  university and research laboratory activities.

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Key EAR Exceptions

• EAR 734.11 What is government research covered
  by contract controls?
• If research is funded by the U.S. Government, and
  specific national security controls are agreed on
  to protect information resulting from the
  research, EAR 734.3(b)(3) will not apply.

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Key EAR Exceptions

• Examples of specific national security controls
  include
• Requirements for prepublication review by the
  Government, with right to withhold permission for
  publication
• Restrictions on prepublication dissemination of
  information to non-U.S. citizens or other
  categories of persons
• Restrictions on participation of non-U.S.
  citizens or other categories of persons in the
  research.
• BUT A general reference to one or more export
  control laws or regulations or a general reminder
  that the Government retains the right to classify
  is not a specific national security control.
  (EAR 734.11)

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Key ITAR Exemptions

• ITAR 125.4(b)(10) Exempts from licensing
  requirements disclosures of unclassified
  technical data in the U.S. by U.S. institutions
  of higher learning to foreign persons who are
  their bona fide and full time regular employees.
• Employees permanent abode throughout the period
  of employment must be in the U.S.
• Employee must not be a national of a country to
  which exports are prohibited pursuant to ITAR
  126.1 (e.g., Belarus, Cuba, Iran, Libya, North
  Korea, Syria, Vietnam, Burma, China, Haiti,
  Liberia, Somalia, and Sudanlist as of 7/2003)
• The institution informs the individual in writing
  that the technical data may not be transferred to
  other foreign persons without the prior written
  approval of the Office of Defense Trade Controls

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Take Home Messages
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Dos and Donts

• Do NOT Ship Any Item Outside the U.S. without
  first checking the ITAR and EAR Lists to
  determine if the item is controlled (This
  includes Outgoing MTAs, Software Licenses, and
  any Agreement Deliverables)
• Secure License Approval (through UCOP) or verify
  license exception PRIOR to Shipment for all
  controlled items
• Do NOT Accept Publication or Access Controls in
  research agreements (regardless of whether
  federal, state, or private)
• Do NOT create special training or access programs
  limited to select foreign companies or foreign
  nationals without first securing a
  government-approved Technical Assistance
  Agreement

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Dos and Donts

• Screen all proposed research contracts from
  government and industry for access and
  dissemination restrictions that might jeopardize
  the projects qualification as fundamental
  research.
• Do NOT Accept clauses, such as
• DOD Clause 252.204-7000, Disclosure of
  Information
• FAR Clause 52.227-17, Rights in Data, Special
  Works
• Airforce Clause 5352.227-9000, Export Controlled
  Data Restrictions
• Army Clause 52-04-4401, Foreign Nationals
  Performing Under Contract (Feb 2002)
• Questionnaire for Public Trust Positions (SF89P)
  or National Agency Check/Name Check Request
• DD2345, Militarily Critical Technical Data
  Agreement
• Watch out for flow down language!

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Dos and Donts

• Review any Confidentiality/Non-Disclosure
  Agreements to insure that UC is not assuming the
  burden of restricting dissemination based on
  citizenship status or securing license
• Require Commercial Contractor to Secure Any
  Required Export License Prior to Transfer of
  Proprietary Data to UC (See EAR 734.8(b)(4) and
  EAR Supplement 1, Section D, Question 2)
• Can agree that the individual to whom proprietary
  data transferred will not disclose it to anyone
  (including other UC personnel)
• Can agree that UC will comply with Export
  Regulations can not agree that data generated by
  UC in the course of the research is export
  controlled

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Dos and Donts

• Whenever possible, make University created
  software, databases, and other technical data
  publicly available
• Publication in periodicals, books, print,
  electronic, or other media available to a
  community of persons interested in the subject
  matter either free or at a price that does not
  exceed the cost of reproduction and distribution
  (See EAR Supplement 1, Questions A(1) - A(6)
• If the source code of a software program is
  publicly available, then the machine readable
  code compiled from the source code is software
  that is publicly available and, therefore, not
  subject to the EAR
• The cost of reproduction and distribution may
  include variable and fixed allocations of
  overhead and normal profit for the reproduction
  and distribution functions but may not include
  recovery for development, design, or acquisition,
  such that the provider does not receive a fee for
  the inherent value of the software.

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Recommendations

• Allow sufficient time for governmental
  authorities to process your application some
  ITAR applications take literally months to
  process again, Plan ahead!
• Consider screening faculty, students, and vendors
  against denied party lists of State, Commerce,
  and Treasury
• Additional Resources
• Auburn University Technology Control Plan at
  http//web6.duc.auburn.edu/research/vpr/security/t
  cp.pdf
• Berkeley Law Export Control Manual at
  http//www.lbl.gov/ehs/security/01export/manual.ht
  ml
• See University of Maryland procedures at
  http//www.umresearch.umd.edu/ORAA/export_control/

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Is the Item Export Controlled?

• EAR List at http//www.access.gpo.gov/bis/ear/ea
  r_data.html
• ITAR List at http//www.pmdtc.org/docs/ITAR/22cfr
  121_Part_121.pdf
• For EAR Items 1)Check the reason for control
  2)Check country chart 3)Determine if license
  required in the column for the country where item
  to be shipped
• For EAR Item, if no check in control column for
  country, then ship under NLR (no license
  required) If item being shipped is not on
  Commodity Control List, then ship EAR99 (exempt)
• For ITAR Item, if on list, contact UCOP license
  will be required because there is no EAR
  equivalent country chart

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Questions?