Export Compliance Basics An Export Compliance Overview • Developed by Laurel Dean • Export Compliance Officer
Export Compliance Overview Nuts & bolts of export rules
Export Compliance Overview- Basics • Overview of Export Controls • The U.S. Government actively regulates, and in some cases, restricts the export of certain information, items or technologies deemed to be critical to the interests of national security, economy and/or foreign policy.
Export Compliance Overview- Agencies • The term “Export Controls” refers collectively to those U.S. laws and regulations that govern the transfer of controlled information or technologies to foreign nationals and/or foreign countries. • There are 3 primary federal agencies that oversee and enforce export controls:
Export Compliance Overview- Basics • General Rules • It is unlawful to export to a denied or restricted party (prohibited end user) without an appropriate export authorization. • Individuals and entities (both domestic and foreign) may be listed on one of the lists maintained by the Department of State, Department of Commerce, and/or the Department of the Treasury. All interactions with these individuals are prohibited without a license. • It is unlawful to perform, direct, or facilitate an export for a prohibited end use. • Applies to weapons of mass destruction, chemical & bio weapons, nuclear technology. • ALL work related to a prohibited end use (including Fundamental Research) requires extensive due diligence and usually requires a license. • It is unlawful to export to a foreign person or entity without an appropriate export authorization. • All exports require either an authorization (internal determination that the export is allowed without a license), or an export license.
Export Compliance Overview- Definitions • Sanctioned & Prohibited Countries & Entities • Comprehensive sanctions (applies to all individuals/entities/transactions related to that country): • Iran • Syria • Cuba • North Korea • Targeted sanctions (applies only to the indicated individuals/ entities/ transactions). These are numerous, but a few examples include: • Russian oil & gas interests • Lebanese individuals who support specific causes • Government officials in Cote d’Ivoire • Prohibited Parties • Debarred Persons (ITAR), Denied Parties List (EAR), Entity List (EAR), Specially Designated Nationals (OFAC), others
Export Compliance Overview- Definitions • Foreign Nationals/Entities • Foreign Nationals are persons who: • Are not U.S. Citizens • Are not permanent resident aliens of the U.S. (i.e., they do not have a Green Card) • Are not in the U.S. as a refugee or with asylum status • Foreign Entities are: • Those businesses, organizations, and governments that are not incorporated or organized to do business in the U.S.
Export Compliance Overview- Definitions • What constitutes an export? • TAKE HOME MESSAGE: • Export controls apply to more than military items. • They impact university work in a variety of ways!
Export Compliance Overview- Definitions • A Few Ways We Might Export (Accidentally) • UNC person/department engages with a sanctioned or prohibited party • FN receives controlled information from an outside party • FN receives/ uses controlled source code • FN participates in controlled research (the research is controlled because of a contractual publication restriction that wasn’t caught) • FN takes a controlled item/material/equipment/ biologic out of the country • UNC person ships a controlled item/material/equipment/biologic to a UNC FN who is doing research abroad • UNC person ships a controlled item/material/equipment/biologic to a foreign sponsor or collaborator • UNC person develops items/materials/equipment/source code on a fundamental research project, and releases it to foreign parties
Export Compliance • In addition to activities involving military items or weapons, it is critical to note that many normal, everyday University activities are subject to Export Controls including: • Traveling overseas on University business (e.g., conferences, conducting field work, international symposia) • Traveling with some types of equipment including laptops, web-enabled cellphones, or other items • Research collaborations with foreign nationals (here in the U.S. or aboard) • Delegations visiting prohibited entities • Visits or tours of research facilities by foreign nationals • Usage of equipment & materials to conduct research • Research involving controlled biologics • Any type of contractual and/or financial relationship with an embargoed or sanctioned person/country • Providing financial assistance to anyone that is considered a blocked or sanctioned party, or a specially designated national • Receiving money or items from a prohibited individual TAKE HOME MESSAGE: Export controls apply to more than military items. They impact university work in a variety of ways!
Export Compliance Overview- Exclusions • Technology Exclusions from Export Control • Research is exempt from export controls when any one of the following three exclusions apply: • Although research may be exempt from Export Controls under these exclusions, the University must demonstrate that the appropriate export control reviews were performed.
Export Compliance Overview-Exclusions • Technology Exclusions from Export Control • The Public Information Exclusioncovers any information that is already published or out in the public domain. Information in the public domain is not subject to Export Controls. Examples include: • Information in the public domain is not subject to Export Controls and no license is required to share information with foreign nationals in the U.S. or abroad.
Export Compliance Overview- Exclusions • Technology Exclusions from Export Control • The Educational Information Exclusioncovers information commonly taught in universities via instruction in catalog courses and/or through the associated teaching laboratories. • Information that qualifies as Educational Information is not subject to Export Controls and no export license is required to share information with foreign nationals in the U.S. or abroad.
Export Compliance Overview-Exclusions • Technology Exclusions from Export Control • The Fundamental Research Exclusionapplies to any basic or applied research in science or engineering where the resulting information is ordinarily published and broadly shared in the scientific community. • Research performed as Fundamental Research is not subject to Export Controls and no export license is required to share information with foreign nationals in the U.S. or abroad. It is important to note that the fundamental research exclusion only covers the “results” of research. It does not cover actual materials, items, equipment, and/or biologics involved in or resulting from the research. Export Controls and licensing requirements may still apply to these items.
Export Compliance Overview-Exclusions • Fundamental Research Exclusion • For research to qualify as Fundamental Research, all of the following must be true: • There can be NO restrictions on publication • There can be NO access or dissemination restrictions • The research must be based at an accredited U.S. institution • Many of these restrictions are not easy to spot, and may even be incorporated by reference. Thorough and experienced contract review and negotiation is critical!
Export Compliance Overview • The Cost of Non-Compliance Following the events of 9/11 there has been a heightened level of awareness and scrutiny of all export activities with a growing emphasis on enforcement. Federal agencies are increasingly focused on universities and their compliance with export regulations. Non-compliance with export regulations can lead to substantial and severe criminal and monetary penalties imposed on both individual researchers and institutions. Export compliance regulations carry individual liability! The severity of the fine/penalty depends on many factors including which regulations were violated, the extent of the violation and more importantly the intent of the violation.
Export Compliance Overview • The Cost of Non-Compliance Department of State – Violations against the International Traffic in Arms Regulations (ITAR): • CIVIL FINES • Fines of $500,000 per violation • Suspension/debarment from Government contracts • Loss of export privileges • CRIMINAL PENALTIES • Up to $1,000,000 per violation • Up to 10 years in prison
Export Compliance Overview • The Cost of Non-Compliance Department of Commerce – Violations against the Export Administration Regulations (EAR): • CIVIL FINES • Fines of $10,000 to $120,000 per violation • Suspension/debarment from Government contracts • Loss of export privileges • CRIMINAL PENALTIES • $50,000 to $1,000,000 per violation • Up to 10 years in prison
Export Compliance Overview • The Cost of Non-Compliance Department of Treasury – Violations against U.S. sanctions or embargoes administered by the Office of Foreign Assets Control (OFAC): • CIVIL FINES • Fines of $500,000 per violation • Suspension/debarment from Government contracts • Loss of export privileges • CRIMINAL PENALTIES • Up to $1,000,000 per violation • Up to 10 years in prison
Export Compliance Overview • The Cost of Non-Compliance • Non-compliance can also lead to: • Significant harm to the integrity and reputation of the University • This can also affect our ability to get & retain sponsors, collaborators, and faculty • Loss of export privileges • Loss of federal funding • Loss of industry funding • Additional and/or more restrictive Ts&Cs in federal awards, which also must flow down to sponsors • Impact on ability to retain/ obtain foreign national visas • Increased scrutiny from other agencies • False Claims Act suits • Requirements to implement specific compliance program
Hiring Foreign Nationals Your export compliance responsibilities as a supervisor or department chair
Foreign Nationals • PI/ Supervisor Responsibilities: • Educate yourself and your lab staff around export compliance regulations • Educate the foreign national: what are the rules, and why do they apply? • Answer questions in the I-129 Export Questionnaire accurately and to the best of your knowledge • Ensure that the foreign national does not engage in export-controlled work without an export authorization or license • Ensure that the foreign national does not have access to export-controlled items, materials, equipment, biologics, technology, or software if a license would be required • Comply with the requirements of any Technology Control Plan, Biologics Control Plan, or Facility Plan for your laboratory • Communicate any questions or concerns to the Export Compliance Officer (email@example.com)
Hiring Foreign Nationals • Department Chair Responsibilities: • Educate yourself and your faculty around export compliance regulations • Thoroughly review all I-129 Export Questionnaires for your department • Work with the Export Compliance Officer to determine labs/ equipment/ biologics/ software in your department that are highly controlled under export regulations • Work with the Export Compliance Officer to implement controls around highly controlled labs/ equipment/ biologics/ software; Ensure that department faculty are aware of these controls • Make faculty aware of new foreign national faculty and post-docs coming into the department; discuss ways to integrate these individuals while still complying with export regulations • Communicate any questions or concerns to the Export Compliance Officer (firstname.lastname@example.org)
Contact Information Laurel C. Dean, JD email@example.com T. 919-962-4102 C. 540-529-1436 firstname.lastname@example.org https://research.unc.edu/export-control/