Export Controls - Overview

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Export Controls - Overview

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Basics What are Export Controls?

• Regulations that control distribution of certain
  exports to foreign nationals and foreign
  countries
• Have been around since the 1940s
• Extend beyond just research
• Need license before you can export

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Basics What is an Export?

• Transfer of Controlled
• Technology Software
• Information Source Code
• Equipment Services (ITAR)
• To
• A non-U.S. entity or individual, wherever located
  (Deemed export )
• Anyone outside the U.S., including U.S. citizens
• By Any Means
• Actual shipment outside the US
• Visual inspection in or outside the US
• FAX PHONE EMAIL FACE to FACE
• Tours of labs
• Training sessions
• Computer data

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BasicsWhat is a Deemed Export?

• The transfer, release or disclosure of Technical
  Data or Technology to a foreign national within
  the United States (includes university campuses).
  
• A transfer is the same as exporting it to the
  home country of foreign national.

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BasicsWho are U.S. Persons?

• U.S. citizens
• Aliens who are Lawful Permanent Residents
  (Green Card holders)
• Other Protected Individuals
• designated an asylee or refugee
• a temporary resident under amnesty provision
• Any entity incorporated to do business in the
  U.S.

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Basics Who are Foreign Persons?

• Everyone else
• Any foreign interest or any US Person effectively
  owned or controlled by a foreign interest
• Includes foreign businesses not incorporated in
  the U.S., persons representing other Foreign
  Persons, any foreign government
• Includes H1B Work Visa, F1 Study Visa, J1
  Training Visa, E1 Investors Visa, TN Work Visa,
  L1 Intra-Company Transfer Visa, K and V Fiancée
  Visas
• EAR does not use the term foreign person -
  instead it refers to foreign national- they
  mean the same thing

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Basics - Application

• Applies to following UMBC areas
• Research Purchasing
• MTA, CDA, LA Human Resources
• Shipping Visiting Faculty Foreign
  Nationals
• Foreign Travel International Education
• Foreign Students
• Export control laws apply to all activities
  not just sponsored research projects
• Your award does not have to cite the regulations
  for export controls to apply

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Why is this important?

• Protect National Security US foreign
  obligations
• Combat Terrorism
• Prevent spread of weapons of mass destruction
  (nuclear, chemical, biological, missiles, etc)

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Why - Liability and Violations

• Individual institutional penalties
• Large fines jail time (500K Civil 1M
  Criminal)
• Multiple violations/finding for same occurrence
• Not just you - Could result in UMBC wide
• All settlements public
• Draconian compliance and reporting
• Loss of export privileges (exporting is not a
  right)
• Adverse impact on federal awards

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Why - University Violations

• U of Tenn Roth Fine Jail time ITAR.
• UCLA - Supported a conference in Iran OFAC
• UC Santa Cruz civil enforcement action 5 yr
  look-back rule
• Texas Tech - Butler - Select Agent export to
  Tanzania 2 yrs in prison 37,400 fine
• Voluntary disclosure helps

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Why Maryland Issues - HSI

• Specs in English pg s in Arabic Company front
  for Iran.
• Chinese Gov using Weather research as cover
• Singapore Co. trying to get 747 flight simulator
  - Iran.
• RED FLAGS
• Foreign Freight forwarders
• Partner declines technical assistance/maintenance
  
• Anything through United Arab Emirates, Malaysia,
  South East Asia

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Most Common US Agencies
Department of State
Department of Commerce
Department of Treasury
International Traffic in Arms Regulations (ITAR)
Office of Foreign Assets Control (OFAC)
Export Admin Regulations (EAR)
Bureau of Industry and Security (BIS)
Directorate of Defense Trade Controls (DDTC)
Trade Protection
National Security
Trade Embargos
Regulates commercial goods Services with
potential military application (Dual Use)
Commerce Control List (CCL)
Export of articles, services related technical
data that are military in nature US Munitions
List (USML)
Sanctions against Foreign Countries
Gov Terrorists, Narcotics, War Criminals, Weapons
Proliferators
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TermsDept of Commerce/BIS

• Export Administration Regulations (EAR)
• (15 CFR 734-774)
• The Commerce Control List (CCL) covers
  commodities, technology software identified by
  an Export Control Classification Number (ECCN).
• Goods and Services having a dual use
  (commercial with military application)

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Terms EAR Commerce Control List Categories

• Category 0 - Nuclear Materials, Facilities
  Equipment (and Miscellaneous Items)
• Category 1 - Materials, Chemicals,
  Microorganisms, and Toxins
• Category 2 - Materials Processing
• Category 3 Electronics
• Category 4 Computers
• Category 5 (Part 1) Telecommunications
• Category 5 (Part 2) - Information Security
• Category 6 - Sensors and Lasers
• Category 7 - Navigation and Avionics
• Category 8 Marine
• Category 9 - Propulsion Systems, Space Vehicles
  and Related Equipment

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TermsDept of State

• International Traffic in Arms Regulations (ITAR)
• 22 CFR Parts 120-130
• US Munitions List (USML) covers military
  articles, services and related technical data
• Prior Authorization required for
• Sending or taking out of U.S. in any manner
• Disclosing (including oral or visual disclosure)
• Transferring to foreign person, whether in U.S.
  or abroad. 
• Performing a defense service on behalf of, or for
  the benefit of, a foreign person, whether in the
  U.S. or abroad.
• Certain information may be controlled even if in
  public domain Defense Services.

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Terms ITAR Munitions List

• I Firearms, Close Assault Weapons and Combat
  Shotguns
• II Guns and Armament
• III Ammunition/Ordnance
• IV Launch Vehicles, Guided Ballistic
  Missiles, Rockets, Torpedoes, Bombs and
  Mines
• V Explosives Energetic Materials,
  Propellants, Incendiary Agents
• VI Vehicles of War Special Naval Equipment
• VII Tanks and Military Vehicles
• VIII Aircraft and Associated Equipment
• IX Military Training Equipment and Training
• X- Protective Personnel Equipment and
  Shelters

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Terms ITAR Munitions List

• XI Military Electronics
• XII Fire Control, Range Finder, Optical and
  Guidance Control Equip.
• XIII Auxiliary Military Equipment
• XIV Toxicological Agents, Including Chemical
  Agents, Biological Agents, and Associated
  Equipment
• XV SPACECRAFT SYSTEMS AND ASSOCIATED EQUIPMENT
• XVI Nuclear Weapons, Design and Testing Related
  Items
• XVII Classified Articles, Technical Data and
  Defense Services
• XVIII - Direct Energy Weapons

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TermsDept of Treasury

• The Office of Foreign Assets Control (OFAC)
• 31 CFR 500-599
• Based on US foreign policy and national security
  goals. They cover economic and trade sanctions
  against targeted foreign countries, terrorists,
  international narcotics traffickers, and those
  engaged in activities related to the
  proliferation of weapons of mass destruction.

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Terms OFAC Application

• OFAC license required for services to or from
• Countries, entities, or individuals
• Covers Sanctions and Embargos
• May apply when ITAR EAR do not
• Multiple lists must be checked (applies to
  entities and individuals even if their country is
  not listed)
• Covers some practices (ie proliferation of WMD or
  diamond trading)
• Restrictions vary by country
• Some exemptions apply for academic collaboration

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Terms OFAC Application

• Prohibits
• Travel to embargoed countries
• (Balkans, Burma, Cote dIvoire, Cuba, DRC, Iran,
  Iraq, Liberia, Lebanon, Libya, North Korea,
  Somalia, Sudan, Syria, and Zimbabwe)
• Sanctions against Countries, Entities,
  Individuals
• Research, field-work, or instruction
• Surveys or interviews
• Trade Importing merchandise
• Furnishing anything of value (ie materials,
  payments, services, honoraria, training)
• Collaborating, presenting or training

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Terms EAR ITAR End User Controls/Prohibitions

• Separate from USML CCL, ITAR EAR prohibit
  exports to, or export collaborations with,
  certain designated entities or countries
  identified as export violators both in and
  outside the U.S.
• So, CCL and USML may say no license is required
  in general, but you need to also check their
  lists to determine if more stringent restrictions
  apply to the entity or country
• Dont be fooled by their Academic names
  (Beihang University, SW Institute of Env Testing,
  Chinese Academy of Engineering Physics).

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TermsTheir Lists

• Denied Persons List (BIS)
• Unverified List (BIS)
• Entity List (BIS)
• Specially Designated Nationals List (OFAC)
• Debarred List (DDTC)
• Nonproliferation Sanctions (DDTC)

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Types of Exclusions and Exemptions

• Exclusion Outside the regulations not subject
  to the regulations
• Exemption - License not required for item or
  activity as defined within the regulations
• Public Domain Exclusion (ITAR,EAR,OFAC)
• Fundamental Research Exclusion (ITAR, EAR)
• Education Exclusion (ITAR, EAR)
• License Exception TMP (Temporary Exports)
• Full-Time Employee Exemption (ITAR)
• Must be used correctly failure may result in an
  export control violation

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Areas of Concern

• Equipment or Biologic Use
• No License required if FN use of controlled
  item is routine. Must not include information
  beyond what is publically available. However, TCP
  is required.
• A license may be required if FN is "using" the
  controlled item in such a way as to access
  technical information beyond what is publicly
  available. Applies even if Fundamental Research.

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Areas of Concern

• TRAVEL
• Travel to embargoed countries
• (Balkans, Burma, Cote dIvoire, Cuba, Dem. Rep of
  Congo, Iran, Iraq, Liberia, Lebanon, Libya, North
  Korea, Somalia, Sudan, Syria, and Zimbabwe)
• Taking equipment (laptops, etc.), out of the
  country may require a license for equipment or
  controlled technology loaded on equipment
• Available license exceptions (must stay under
  effective control)
• TMP temporary exports - Good for 1 yr
• BAG personal baggage

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Areas of Concern

• Shipping equipment to a foreign country
• License required to ship if controlled by ITAR to
  any foreign country (few exemptions).
• License may be required to ship equipment
  controlled under EAR out of the US depending on
  what the equipment is, where it is being sent,
  who will be using, and for what purpose (many
  exceptions)
• Process to classify equipment and obtain a
  license under EAR may take several months
• Presumption under OFAC any all shipments of
  equipment and provision of services to countries
  under sanction or persons in those countries are
  ILLEGAL.
• Do not use foreign freight forwarders w/o EC
  review
• Collaborating with foreign colleagues in foreign
  countries
• Teaching foreign persons how to use items in
  research (Defense Service)
• Controlled software use in classes

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Areas of Concern

• Sponsor publication approval or foreign national
  restrictions
• Contracts with DoD, NASA, DHS, Intel Agencies
• Proprietary technology research with industry or
  government
• Accepting another partys proprietary information
• International sponsors, subcontractors

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Areas of Concern

• Non-sponsored research at university
• Collaborating with a country subject to US
  sanctions
• Projects in your garage
• Attending closed mtgs conferences DD2345
• Faculty start-up companies (no FRE)
• Providing services (not research)
• Protecting students
• Consulting work
• MTAs and NDAs

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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UMBCs EC Management System

• Sponsored Programs
• Export Control Flow Chart and Questionnaire
  created
• Questions added to Routing sheet
• Practical EC training to OSP planned
• UMBC Community
• Created EC information web site (found at
  http//www.umbc.edu/research/ORPC/_
• Established EC Official Legal - Dean Dave
• Work with Functional Departments (shipping,
  travel, etc)
• Executed EC Policy
• Outreach and training program
• Presented to Faculty (CBEE, IS, CSEE, JCET, ME,
  Physics)
• Add EC component to DRATT
• Presented to Admin groups (BRG, RAG, etc)

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Export Controls

• Basics
• Why?
• Terms
• Exclusions and Exemptions
• Areas of Concern
• UMBC Management of EC
• Case Studies

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Export Controls Case Study

• I am a researcher at UMBC. I am only conducting
  research on campus with students and other
  faculty and dont plan to ship anything outside
  the United States. Do export controls affect me?
• Yes. An "export" also includes furnishing
  technical data to foreign persons or releasing
  technology or software to foreign nationals
  within the US and abroad. These types of exports
  are called "deemed exports" because the
  regulations deem them to be the equivalent of
  sending the same items (commodities, software,
  technology, technical data, defense articles,
  services) to the foreign nationals home country.
  Deemed exports can occur even when providing
  technical data in the form of graphs,
  specifications, or other technical information to
  a foreign student working in your lab. Whether it
  is a deemed export depends on whether the items
  provided is subject to and listed on the CCL or
  is considered technical data under ITAR.

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Export Controls - Case Study

• I will be traveling to China to do research work
  with my collaborator, who is a faculty member at
  a university in Beijing. I will be providing her
  with my research results from my studies at UMBC
  but also undergoing further research at her lab.
  Do I need to be concerned about export controls?
• Yes. Your research results produced at UMBC are
  considered fundamental research results and fall
  under the fundamental research exclusion.
  However, information resulting from your research
  efforts in China does not fall within this
  exclusion from the export control regulations.
  Any transfer of controlled information to a
  foreign national, whether here or abroad, is
  considered an export and may require a license.
  Please check the CCL and USML to see whether your
  research in China will involve controlled
  technology, information or software. If so,
  please contact the Office of Research Protections
  and Compliance to determine what your next step
  is in order to undergo the collaboration.

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Export Controls Case Study

• I, along with another colleague, have received a
  request to provide peer review guidance to
  Professor K at the University of Tehran, whom
  both of us know well from international
  conferences. His work is strictly civilian and
  would not appear to have any connection to Irans
  government or military establishment. While I am
  a U.S. citizen, my colleague is a British citizen
  living in the U.S., though originally from Iran.
  He visits Iran occasionally on personal matters,
  and mentions that Professor K is interested in
  strengthening his ties to UC for professional and
  personal reasons. Can we provide the peer review?
  
• Potentially, not without an OFAC license. As a
  U.S. citizen subject to the OFAC rules, providing
  a peer review may constitute a service to Iran
  and is therefore prohibited without an OFAC
  license. The fact that you are not receiving
  compensation for the assistance or the Iranian
  professors work is purely civilian does not
  matter for purposes of the Iranian embargo
  regulation. While it is possible OFAC might grant
  such a license, this cannot be assumed. As to
  your British colleague, the fact he is living in
  the U.S. likely renders him subject to the same
  restriction.

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Export Controls Case Study

• I teach a grad course in the design and
  manufacture of very high-speed integrated
  circuitry. Many of the students are foreigners.
  Do I need a license to teach this course? What if
  the students were from countries that require a
  license? What if I talked about yet unpublished
  results?

No. The release of information by
instruction in catalog courses and associated
teaching laboratories of academic institutions is
not subject to EAR. Even if one of the students
was from a restricted country, or you talked
about unpublished results from your research lab.
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Export Controls Case Study

• I have expertise in design and creation of
  submicron devices. I have been asked to be a
  consultant for a third-world company that
  wishes to manufacture such devices. Do I need a
  license?

Quite possibly. Applications abroad of
personal knowledge or technical experience
acquired in the US constitutes an export of that
knowledge and experience and is subject to EAR.
If any part of the knowledge or experience your
export or re-export deals with technology that is
listed under the CCL you may need a license.
Note As a consultant you are outside the
university.
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Questions?

• www.umbc.edu/research/ORPC
• Export Control Management
• Contact
• Dean Drake
• DDrake_at_UMBC.EDU
• 410-455-5642

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