Title: What Non-Research Institutions Need to Know About Export Controls
1What Non-Research Institutions Need to Know About
Export Controls
- Carol T. Carr Carol T. Carr, University
Consulting Services - Nelson G. Dong Dorsey Whitney, LLP
- Justin H. Smith Washington and Lee University
2The Basics
3What are Export Controls?
- Generally speaking, export controls restrict
- 1) business/monetary transactions with certain
countries, entities, and individuals and - 2) dissemination of certain technology and
information. - Not limited to tangible items ? Deemed export
- Exclusions/Exceptions
- Licenses
4U.S. Export Control Regimes
- Embargoes
- Administered by OFAC
- Scope Business/monetary transactions
- EAR Export Administration Regulations
- Administered by BIS
- Scope Dual use items
- ITAR International Traffic in Arms Regulations
- Administered by DDTC
- Scope Defense-related items
5Examples of Triggers
6Activities That May Trigger Export Controls
- Dissemination of research/expertise
- To foreign nationals (within the U.S.)
- In a foreign country
- Subject to publication restrictions or
prepublication review - Subject to access/dissemination controls
- Examples
- Prepublication review of article by corporate
sponsor to see whether to protect research
results as trade secret. - Presenting at a prestigious international
scientific conference where notes and recordings
are not permitted. - Consulting a third world manufacturer of
sub-micron devices.
7Activities That May Trigger Export Controls
(cont.)
- Hiring of foreign nationals whose work will
involve access to technology or data subject to
EAR or ITAR - Examples
- Hiring foreign national whose work will involve
research with biological reagents. - Hiring foreign national whose work will involve
maintenance of supercomputer.
8Activities That May Trigger Export Controls
(cont.)
- Travel/shipping to/from any country
- Examples
- Shipping advanced telecommunications equipment to
China for field research. - Carrying algorithm to Balkan penninsual on a
laptop computer.
9Activities That May Trigger Export Controls
(cont.)
- Business/monetary transactions
- Examples
- Donation (or payment of tuition) by someone on
prohibited list. - Student organization humanitarian trip to Darfur.
10Exceptions and Exclusions
11Public Domain/Publicly Available
- Information which is published and generally
accessible to the public through (among other
things) fundamental research.
12Educational Exemption
- Generally, a license is not needed for
classroom/lab teaching to foreign nationals in US
Universities. - Students in degree programs, using controlled
equipment to conduct research need to be
registered for a research credit class.
13Fundamental Research Exclusion
- Basic and applied research in science and
engineering, where the resulting information is
ordinarily published and shared broadly within
the scientific community. - Distinguished from proprietary research and
industrial development, the results of which are
ordinarily restricted for proprietary reasons or
national security reasons.
14Employment Exemption
- A license is not required when sharing controlled
technical data with a foreign national who - Is not a national of an embargoed country
- Is a full-time bona fide university employee
- Has a permanent address in the U.S. while
employed at university and - Is advised IN WRITING not to share covered
technical data with any other foreign nationals
without government approval.
15TMP
- The export of items, technology, commercial
software, and encryption code is subject to
export control regulations (this includes
laptops, PDAs and digital storage devices). - The TMP exception can be used for tools of the
trade for a period of less than a year, but does
not apply to any EAR satellite or space-related
equipment, components, or software, or to any
technology associated with high-level encryption
products and cannot be used for travel to Iran,
Syria, Cuba, North Korea, or Sudan.
16BAG
- Can be used for travel outside the U.S. when you
are taking PERSONAL items or technology that
would normally require a license from the
Department of Commerce. - For example, if you plan to take your personal
laptop rather than a university laptop when
attending a conference or conducting research
abroad, and you are taking controlled technology,
software, or other information that would require
a license, the BAG license exception is
available.
17What do you do if you lose them?
- Exceptions can be lost if all of the conditions
for the exception are not met. Then you are
subject to the export laws and regulations in the
same way that commercial enterprises are. - Importance of a compliance program for your
institution, including a risk assessment to
identify where export control issues are arising
and due diligence in managing them. (More later)
18AN ILLUSTRATIVE CASE STUDY OF EXPORT CONTROLS IN
ACADEMIA
- Nelson G. Dong
- Head, National Security Law Group
- Dorsey Whitney LLP
- Seattle Office
NACUA Annual Meeting June 28, 2011 San Francisco,
CA
19U.S. EXPORT CONTROL REGIMES
- OFAC embargoes Office of Foreign Assets Control
in Department of the Treasury - International Traffic in Arms Regulations (ITAR)
Directorate of Defense Trade Controls in
Department of State - Export Administration Regulations (EAR) Bureau
of Industry Security in Department of Commerce
20THE CASE STUDY CONTEXT
- Modern University (MU) wants to update its
educational model for summer term studies - MU will combine teaching scientific research
methods in a study abroad summer term - MU will send faculty, students to a
Spanish-speaking environment - MU science, language faculty decide to jointly
teach 10-week program on environmental effects of
the Gulf oil spill and national government
responses in Mexico, Venezuela and Cuba
21MU PROGRAM PREPARATIONS
- MU faculty may send to their foreign colleagues
- Faculty and student-built ocean motion sensors
- Faculty and student-created software to refine
civilian-level satellite imagery into much higher
resolution images - Faculty and student-built remotely operated
underwater submersibles to study marine life and
undersea currents - Faculty and students will also take own PCs,
equipment and instruments to help equip naval
oceanographic research vessels from Mexico,
Venezuela and Cuba
22OFAC EMBARGO ISSUES
- No OFAC embargo issues for Mexico or Venezuela
- Cuban Transaction Regulations (CTR) in 31 CFR
Part 515 affect all dealings with or travel to
Cuba - Academic travel to Cuba historically difficult
but new general license published in January
2011 - Still CTR concerns about services being
rendered to Cuban government officials in MU
program - Still may be other physical export aspects of
MU program that bear close scrutiny under CTR - OFAC general license for publishing covers any
joint academic papers from program
23ITAR ISSUES
- ITAR fundamental research exemption applies
only in U.S. - If any defense articles or defense services
involved, then ITAR issues raised for Mexico,
Venezuela and Cuba - Mexico might get approval from DDTC
- But arms embargoes and policy of denial
against Venezuela, Cuba under 22 CFR Section
126.1 - MU faculty collaboration with naval oceanographic
vessels from Venezuela, Cuba could be classified
as defense services - Some MU technical preparations might also involve
shipment of defense articles to Venezuela, Cuba - Sensors, software, submersibles
24EAR ISSUES
- Although fundamental research exemption in 15
CFR Part 734.8 applies only to on-campus research
activities, not to any foreign programs - Many kinds of advanced lab or field research
instruments may be subject to EAR export controls - Sensors, software, submersibles
- Both physical export and deemed export issues
may be raised by research collaborations by MU
faculty collaborations with colleagues in Mexico,
Venezuela and Cuba - Overlap with OFAC embargo issues as to Cuba no
items controlled by EAR can be exported to Cuba - High levels of scrutiny even for Mexico,
Venezuela under Country Chart in 15 CFR Part 738
25LEGAL EXEMPTIONS AND THE MU CASE STUDY
- OFAC embargoes April 2011 general license for
Cuban academic travel information and
informational materials exemption and
publishing general license for publications - ITAR exclusion of fundamental research
limited to such activity in the U.S. (i.e., not
available for research conducted outside U.S.
territory) - EAR exclusion of fundamental research limited
to such activity in the U.S. (i.e., not
available for research conducted outside U.S.
territory)
26Policy and Procedures
27Policy and Procedures
- Institutional Policy
- Risk Assessment and Export Management
- Website with policies and procedures
28Policy Considerations
- Minimum Requirements
- Statement of Compliance with Federal laws and
regulations regarding exports - Preservation of Fundamental Research Exclusion
- Commitment to education and training of
university personnel
29Export Management Oversight
- Risk Assessment
- Institution Overview
- Identify Responsible Parties
- Establish Standards of Due Diligence
- Audits
30Export Control Website
- Getting the Message out to your Audience
- Faculty
- University Administrative Personnel
- Federal Agencies
- Potential Sponsors
31Make it fit your institution
- Identify through your risk assessment your
special concerns - Engage administrators, researchers and senior
administration - Keep it user friendly and timely
32If theres a violation
- Investigate internally and get all the facts.
- Voluntary Disclosure is in your institutions
best interest. - Consider engaging outside export counsel.
33Practical Tips
34A Few Practical Tips
- Enlist the assistance of your Business Office /
Bursar and International Education Office - Ensure Business Office / Bursar and Development
Office know to screen transactions against OFAC
list of Specially Designated Nationals (SDNs) - Coordinate with Human Resources to ensure that
export controls analysis is conducted before
certification is made on USCIS Form I-129
35A Few (More) Practical Tips
- Add export control review to your contracts
administration policy/process - Review sources of research funding
- Watch out for any contract that specifically
mentions export controls - Assume nothing
- Utilize FAQs
- Know what you dont know, and whom to call for
help
36OBAMA ADMINISTRATION EXPORT CONTROL REFORMS
- Nelson G. Dong
- Head, National Security Law Group
- Dorsey Whitney LLP
- Seattle Office
NACUA Annual Meeting June 28, 2011 San Francisco,
CA
37OVERVIEW OF REFORM PROPOSALS
- Obama Administration determined in April 2010
fundamental reforms of U.S. export control system
were needed to move toward - Single control list
- Single primary enforcement coordination agency
- Single information technology (IT) system
- Single licensing agency
- Reform efforts originally led by Secretaries
Gates (Defense), Locke (Commerce) and Clinton
(State)
38EXECUTIVE LEGISLATIVE CHANGES
- Administration is attempting specific reforms
that can be initiated immediately and implemented
without legislation - Administration is already consulting with key
Congressional committees to pave way for needed
legislation to complete entire its reform package - Current concerns
- Two of three key Administration leaders in reform
effort stepping down (Gates and Locke) - Spotty, inconsistent Congressional support for
such reforms - 2012 election cycle and partisan political
agendas
39PHASE I
- Control List Refine, understand, and harmonize
definitions to end jurisdiction confusion between
ITAR, EAR lists establish new independent
control criteria to be used to screen items for
control into new tiered control list structure - Licensing Implement regulatory-based
improvements to streamline licensing processes
and standardize policy and processes to increase
efficiencies - Enforcement Synchronize and de-conflict
enforcement by creation of an Enforcement Fusion
Center among agencies - Information Technology Determine
government-wide needs and begin process to reduce
confusion by creating single U.S. Government
(USG) point of entry for exporters
40PHASE II
- Control List Restructure separate USML, CCL
into identical tiered structures apply
criteria remove U.S. unilateral controls as
appropriate and submit proposals multilaterally
to add or remove controls - Licensing Complete transition to mirrored
control list system and harmonize licensing to
allow authorized exports within each control tier
so as to reduce license requirements without
detriment to national security - Enforcement Expand outreach and compliance
through primary Enforcement Fusion Center and
various agencies - Information Technology Transition toward single
electronic licensing system
41PHASE III
- Control List Merge current separate USML, CCL
into a single list and implement systematic
process to keep current as merged single list - Licensing Implement single licensing agency
- Enforcement Consolidate certain enforcement
activities into single Primary Enforcement
Coordination Agency - Information Technology Implement single,
government-wide IT system for licensing and
enforcement
42