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EXPORT CONTROL BASICS How Export Control Impacts on Research and Education. Sreekant Murthy, Ph.D. Chief Research Compliance Officer Rowan University. Overview – Topics to be Covered. The Basics: Exports, Deemed Exports, Definitions The Export Control Regulatory Framework --
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EXPORT CONTROL BASICSHow Export Control Impacts on Research and Education Sreekant Murthy, Ph.D. Chief Research Compliance Officer Rowan University
Overview – Topics to be Covered • The Basics: Exports, Deemed Exports, Definitions • The Export Control Regulatory Framework -- ITAR, EAR and OFAC • Exclusions • Penalties • Application to University Research and education. • Export Control for Researchers
What is Export Control? • Federal laws to protect items, technical data and information important to the U.S. • U.S. laws and their implementing regulations prohibit the unauthorized “export” of certain controlled ITEMS, INFORMATION OR SOFTWARE to foreign persons or entities in the U.S. and abroad. • These laws have been in place over 20 years. However, they have become more prominent since 9/11. • Export control laws apply to all activities – not just sponsored research projects
Export Control Regulations – What do they control? • EC regulations control the shipment or transfer, by any means of controlled items, software, technology, or services out of US. • EC regulations also restricts the release of certain information to foreign nationals here and abroad. This is called “deemed export”. • EC regulations my impose severe restrictions on the way the our faculty and students conduct research, which may impede international collaborations in certain research areas and especially research collaborations with restricted (embargoed) countries. • Noncompliance results in both monetary and criminal penalties against the individuals as well as the university. • Noncompliance may also results in reputational and financial harms to the university.
Importance of Export Control Compliance Due Diligence • Export Control Regulations have far-reaching implications on everyday University activities. • Many units (administrative, academic, research) of the University are affected. • Compliance with regulations requires a university-wide oversight program. • Non-compliance with regulations places the University and its personnel at risk of fines and/or imprisonment.
Government’s Concern • Open access/publication of scientific and technological results may provide unwitting assistance to nations or terrorist groups in developing weapons. • Protecting economic interests of U.S. companies. • Protecting U.S. national security and foreign policy interests by: • Denying our adversaries the means to advance their military potential • Implementing foreign policy objectives • Preventing terrorism • Inhibiting the proliferation of Weapons of Mass Destruction (nuclear, biological, chemical) • Fulfilling Multilateral Obligations (i.e. UN Sanctions, Trade Agreements)
What is Affected? • All items/technology in the U.S. except: • Publicly available technology & software. • Publications that are artistic or non-technical in nature. • Items/technology located outside of the U.S.: • Items of U.S. origin wherever located. • Foreign made items if it exceeds certain % U.S. content or direct product of U.S. technology
Regulatory Framework This is a complicated network of federal agencies and interrelated regulations that govern exports collectively referred to as “Export Controls”. • International Traffic in Arms Regulations (ITAR) are administered by Department of State • Controls Defense related items. • Export Administration Regulations (EAR) are administered by Department of Commerce. • Controls most other items. • Numerous other regulatory agencies control exports such as Department of Treasury (money), DOE (Nucs), DOJ (drugs), USDA (seeds), CDC-USDA (Biological agents). • Office of Foreign Assets Controls – OFAC. • The Department of the Treasury’s Office of Foreign Assets Controls (OFAC) administers economic sanctions programs with regard to a number of countries, using asset blocking and trade restrictions to accomplish US foreign policy and national security goals. OFAC periodically updates this list. (http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx.)
General Provisions • Prohibits certain exports, reexports and other conduct without a license, license exception or determination that no license is required. • A license is a pre-approval to export (ITAR & EAR). • Usually valid for 4 years • Applies to a specific item to a specific country. • In the end, few items covered by EAR need a license—however, they must go through process to make the determination and be able to defend decision. • A Technical Assistance Agreement (TAA) (ITAR) is an agreement for the performance of a defense service or the disclosure of technical data. Rowan University will most likely use this option to get foreign researchers approved. A TAA does not authorize unrestricted publication-only an approval for the listed foreign person to work on the specific project.
Challenges • EAR is not as simple as just looking at the nationality. • Very dependent upon the specific technology—some countries can receive some items. • Time factor in determining requirements and then applying for and receiving licenses-could be as long as 90-120 days—depending on outside agency review. • ITAR is simpler in that it considers all foreign nationals equally as “dangerous”, however, specific technology is still a major consideration.
Activities Triggering Export Control Issues • They include the following: • Military or Defense Articles and Services • High Performance Computing • Dual Use Technologies (technologies with both a military and commercial application) • Encryption Technology • Missiles & Missile Technology • Chemical/Biological Weapons • Nuclear Technology • Select Agents & Toxins (see Select Agent/Toxin list) • Space Technology & Satellites • Medical Lasers • Travelling • With high tech equipment, confidential, unpublished or proprietary information or data • Laptops, web-enabled mobile devices and other personal equipment • Shipping or takin items overseas • Sponsored classified research with restricted access to the research by foreign nationals
Points to Consider • Export control laws apply whether or not there is a specific reference in the award document. • Applies not only to the PI and assigned researchers-need to consider where information is accessible (labs/computers) & control of information from other foreign persons.
Additional Considerations • Technology Control Management Plans (TCP) • Outlines how the controlled technology will be handled/secured to prevent access by unapproved foreign persons. Will be required even if there are no foreign persons assigned to the project. • Addresses physical security of labs & other work areas as well as security of data on computer networks (Information Security).
Discussion Items • Publication restrictions and impact on Graduate students/PIs working on project. • Administrative process/burden • TAAs and Technology Control Plans are time consuming to prepare. • Requires additional interaction between PI and sponsor to determine what technology is controlled. • Approval process by Federal Gov’t can take 8-10 weeks. • Security of labs/work areas/computers & network
Recommended Actions • Develop Rowan’s policy for dealing with export provisions • Outline responsibility of Office Research (OR) Administrators and PIs/Departments. • Put more burden on PIs and the sponsor to assist with identification of technology. • Process will involve several offices such as: OR, PIs, Departments, Research Deans, Associate Deans and possibly General Counsel. • Post policies & training materials on web site. • Educate OR, Research Deans and Depts. on general guidelines of EAR/ITAR and Rowan University policy.
Common Acronyms • BIS – Bureau of Industry and Security • BIS Mission: Advance U.S. national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. Maintains denied persons list, boycott list, and technology evaluation (OTE) • ECCN – Export control Classification Number • Five digit alpha numeric number for export control classification used in CCL • CCL – Commerce Control List • List of items divided into ten broad categories and five product groups under each of the broad categories. • ITAR – International Traffic in Arms Regulation • EAR - Export Administration Regulations • OFAC – Office of Foreign Assets Control • TAA -Technical Assistance Agreement (ITAR) • TCP – Technology Control Plan • A technology control plan (TCP) stipulates how a company will control its technology. The plan establishes procedures to protect classified, proprietary, and export-controlled information; to control access by foreign visitors; and to control access by employees who are non-U.S. persons. • TTCP – Technology Transfer Control Plan • USML- United States Munition List
US Munition List • The United States Munitions List (USML) is a list of articles, services, and related technology designated as defense- and space-related by the United States federal government. This designation is pursuant to sections 38 and 47(7) of the Arms Export Control Act (22 U.S.C. 2778 and 2794(7)). These articles fall under the export and temporary import jurisdiction of the Department of State. • There are 20 categories of articles on the USML.
U.S. Munitions List (Part 121) Categories I- Firearms, Close Assault Weapons, & Combat Shotguns II- Guns & Armament III- Ammunition/Ordnance IV- Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines V- Explosives and Energetic Materials, 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
U.S. Munitions List (Part 121) X. Personnel Protective Equipment XI. Military Electronics XII. Fire Control, Range Finder, Optical and Guidance and Control Equipment 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 Not Otherwise Enumerated XVIII. Directed Energy Weapons XIX . Submersible Vessels, Oceanographic and Associated Equipment XX- Miscellaneous
EAR Categories (Dual Use) • Nuclear Materials, Facilities & Equipment & Miscellaneous Materials, Chemicals, Microorganisms and Toxins • Materials Processing • Electronics Design, Development and Production • Computers • Telecommunications & Information Security • Sensors and Lasers • Navigation and Avionics • Marine (ships & vessels) • Propulsion Systems, Space Vehicles and Related Equipment
Examples of EAR Controlled Technologies • Batteries and Fuel Cells • Cameras and Optics Equipment • Artificial Intelligence Software • Certain Computer Equipment • Items using Laser Technology • Certain Chemicals, Microorganisms and Toxins • The list depends on interplay of type of item, reason for export control and destination country • This list is large and a bit cumbersome to manage • There is an index that helps you navigate to the right place within the CCL by identifying the “ECCN” (export control classification number
Examples of ITAR Controlled Technologies and Items • Explosives • Rocket Systems • Military Training Equipment • Spacecraft and Satellite Equipment (even if not for military use) • Toxicological Agents and Equipment • Biological Agents • Radiological Equipment (including nuclear radiation detection and measurement devices) • Defense Services
EAR Embargoes U.S. Embargoes • Cuba – most stringent embargo • Iran – comprehensive trade and investments • Sudan – comprehensive • Syria – general order • U.N. Embargoes (arms embargoes) • Iraq • Rwanda • Russia
ITAR Prohibited Countries • Arms Embargoes: Cuba, Iran, North Korea, and Syria • Belarus, Burma, China, Eritrea, Sudan, Venezuela, and Vietnam • Denial Policy with Exceptions: Afghanistan, Cote d'Ivoire (Ivory Coast), Cyprus, Fiji, Haiti, Iraq, Lebanon, Liberia, Libya, Rwanda, Republic of the Congo, Somalia, Sri Lanka, Yemen and Zimbabwe.
Export Control Exclusions • Includes the following: • Fundamental Research (ITAR and EAR) • Educational Exemption (ITAR only) • Employment Exemption (ITAR Only) • Public Domain • A license is not required if one of the above exclusions applies.
Fundamental Research Exclusions and Reasons for loss of Fundamental Research Exclusions • Fundamental Exclusions include: • Basic and applied research • May include foreign nationals • There can be no restrictions on access by students or others • No restriction on publication • Research carried out openly • Results are intended to be shared broadly in the scientific community This Allows unrestricted access to research and free interchange of information, recognizes the open campus culture and environment and Supports compliance with U.S. export control regulations. Information in the Public Domain is not controlled. • Reasons for Loss of Exclusion • The university accepts any contract clause that: • Forbids the participation of foreign persons; • Gives the sponsor a right to approve publications resulting from the research; or Otherwise operates to restrict participation in research and/or access to and disclosure of research results. • There are side deals between the PI and the sponsor
Education Exclusion • The ITAR provides that information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities, is not included in the definition of technical data subject to the ITAR [§120.10(a)(5)]. • Excludes technology or materials. • EAR excludes education information released by instruction in catalog courses and associated teaching laboratories • The EAR education exclusion does not extend to the release of information in research labs not associated with catalog courses. • You do not need a license to share information as part of a course. • You can train foreign nationals on how to use most otherwise - controlled equipment that is part of a class or class laboratory.
Employment Exclusions • No license is required to share controlled technical information with a foreign person who: • is a full-time, bona fide university employee • has a permanent address in the US while employed provided that person is: • not a national of certain countries and • is advised in writing not to share controlled information with other foreign persons.
Export Control – How does it Affect Researchers? • Researchers may be affected by export controls if: • They teach courses – online courses • They perform research on campus or elsewhere. • They plan to travel outside the United States to attend conferences and make presentations. • They may be interacting with foreign national. • They may need to ship items, software or information internationally. • They need to be careful by not violating a sanction or embargo when they, or the institution make payments for purchased items, services, or reimburse expenses. • They are required to fully comply with institution’s EC policies and all U.S. export control laws and regulations.
Why do researchers need to know about Export Control? • Researchers are at the “front line” of export control issues because: • They have control over the scope of the research project • They are the ones who make the decision regarding equipment or technology which will be implemented and to whom it may need to be transferred • Because researchers have ultimate control of the research project, their input is critical to help contract administrators evaluate technical aspects of export control issues
Questions to Consider for Researchers • What is the technology? • Must know the specifics-will require help of PI and/or sponsor. • Who is going to be working on project? • What nationality and status? • Certain countries are embargoed by both agencies: Cuba, Libya, Sudan, Iran, Iraq • Where is the work going to be accomplished? • On/off Rowan property? • If in Rowan University offices/labs-who has access? Rowan has developed a checklist for researchers to verify whether research is EC-regulated
What should Faculty Know About EC? • International Travel • Shipping • Attending Conferences • Presenting in Conferences • Travel Restrictions • Deemed Export • Embargoed Countries list • Applicable Research • Self Checklist • Faculty Assistance
International Travel Restrictions - What Researchers Can Take? • When they leave the country, everything you take is an export, including devices, software, and data. • They cannot take ITAR-controlled articles, technical data, or software (which the ITAR considers to be technical data) without a license from the State Department. Tangible items developed through fundamental research which was excluded from export controls are still subject to the ITAR. • To be clear: if they have ITAR-controlled technical data, such as a document or drawing, on your laptop, you cannot take it out of the US, even if you have no intent to transfer the items to a non-US person. • In most cases, US and non-US persons can take EAR-controlled items and software, including your laptop and PDA, using EAR license exception TMP (Temporary exports) or BAG (Baggage) can use the exceptions to take EAR items and software.
International Travel Restrictions -What Researchers Can Take (Continued)? • US persons can use the exceptions to take EAR-controlled technology, but this does not authorize its transfer to someone not otherwise authorized to receive it. • To be clear: these exceptions don’t authorize a non-US person to take EAR-controlled technology out of the US, even if it has been transferred to them as an acceptable deemed export • Continue to Using TMP (Temporary Imports, Exports and Re-exports) or BAG (Baggage) exceptions. • Remember that destination countries have their own import and export controls (see Travel.State. Gov), which may affect how researchers can use items while there and what you can take out of the destination country.
Attending Conferences • The EAR considers information released at an “open” conference, meeting, seminar, trade show, or other open gathering to be published, and so excluded from EAR control. ◦ • “Open” means that all technically qualified members of the public are eligible to attend and attendees are permitted to take notes or otherwise make a personal record (not necessarily a recording) of the proceedings and presentations. • An “open” conference can charge a registration fee reasonably related to cost, and can limit actual attendance, as long as attendees either are the first who have applied or are selected on the basis of relevant scientific or technical competence, experience, or responsibility.
Attending and Presenting at Conferences • The ITAR considers information released through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the United States to be in the public domain, and so excluded from ITAR control. • Researchers can consider information you receive at an open conference to be publicly available information, excluded from export controls. • Researchers can deliver or present the results of your fundamental research or other information in the EAR and ITAR scope at open conferences. • Outside the US, researchers can deliver or present the following information in the ITAR scope: • General systems description ( such as top-level drawings, top-level narrative descriptions or summaries of performance requirements, key subsystems, top-level block diagrams, top-level description of operational modes, top-level equipment layout drawings, and top-level predictions of power usage or consumption), since this is not considered ITAR technical data (ITAR §120.10(a)(5)). • Public domain information, such as published research results or material previously released in a university course, at conferences or meetings outside the US.
International TravelRestrictions on Where you can go • Check the U S Department of the Treasury, Office of Foreign Assets Control web site for a list of Embargoed Countries. • Check the University Travel Policy. • If you decide to travel to an embargoed country, you must sign Rowan’s travel form before departure, acknowledging the risk and personal responsibility for the decision to travel. • There may be other restrictions that may need to be followed. Please check with Office of Research to obtain further information on International Travel.
International TravelRestrictions on What you can do When you Get there • While US sanctions programs and restrictions on transactions with specific parties always apply, the likelihood of being affected by them increases when you’re outside the US. • Cuba, Iran, North Korea, (North Sudan) and Syria are subject to strict controls. If you will be working with nationals of these countries, you should be familiar with both. • Working with China entities and nationals can be complicated by US policy toward China, which includes both enthusiastic support for commercial transactions and strong aversion to support of the Chinese military. Some apparently benign China institutions are considered by the US government to be closely related to the military, resulting in restrictions on transactions with them. • OFAC’s Specially Designated Nationals and Blocked Persons List and the Commerce Department’s Entity List are the most relevant, but the government maintains a total of 35 lists with various restrictions. You can check most of these using the National Export Initiative’s consolidated list, or consult Rowan’s Export Control Officer.
International Shipping • International shipping is also subject to numerous export and import controls and regulations. Fines, confiscation, or incarceration can all result from failing to comply. • Most things, and some software & information, are export-controlled to some degree. • Some items are hazardous, and need to be packaged and labeled appropriately. Contact Rowan’s EHS for further information. • The shipment (Export and Import) can be delayed or incur unexpected costs if the paperwork is wrong or incomplete. • All imported shipments are cleared by U.S. Customs, with varying levels of scrutiny. Some items that are hazardous may be restricted.
Key Issues for University Research • Deemed Exports • The obligation to obtain an export license from BIS before releasing controlled technology to a foreign person is informally referred to as a deemed export. Release of controlled technology to foreign persons in the U.S. are "deemed" to be an export to the person’s country or countries of nationality and is found in 734.2(b) of the EAR. • Scope of Fundamental Research Exclusion • Foreign National restrictions in contracts • Government-sponsored research covered by national security contract controls • ITAR – “defense articles” and “defense services,” especially in space research and, increasingly, in life sciences and nanotechnology research • The application of OFAC sanctions to university-sponsored or related activities
Examples of common universitydeemed export risk areas • Equipment & material purchase, usage & disposal • Research agreements • International agreements • Material transfer agreements • Nondisclosure agreements • Software and other intellectual property licenses • International travel • Select biological agents • Contractual services agreements • Affiliates programs
Examples of Applicable Research • Electrical engineering, integrated circuits, encrypted software, advanced telecommunications • Applied physics – ex. lasers and other equipment • Nanotechnology and new materials – ex. composites and ceramics • Life Sciences and Chemicals (including academic medical centers and health sciences centers) • Optics and imaging • Detection of toxic chemical aerosols • Plasma and biomedical research with lasers • Research with controlled chemicals, biological • agents, and toxins • Biological samples • Crop dusting, aerosol dissemination • Tangible products of fundamental research (prototypes, materials, some software) are not excluded. These items may require authorization for export from the US. Note: The intellectual product of fundamental research (publishable results) is excluded from export controls.
What university areas are affectedby Export Control Regulations? • Engineering • Medicine • Nursing • Pharmacology • Sciences, et al. • Education and Training • Computing and Information Technology • Technology/Material Transfer • Grants and Contracts • General Counsel • International Study Programs • Purchasing • Shipping and Receiving • Environmental Health and Safety • International Collaborations
Questions to Ask Yourself • Does the research involve any of the EAR categories? • Does the research involve any item on the ITAR Munitions List? • Does the research involve technology or devices designed for use in military, security and intelligence applications? • Does the research involve anything else wit a substantial or dual-use military application?
Export Control Review Process • Assistance is available for: • Preliminary Evaluation • Review proposals in the scientific areas of the greatest risk for export control issues • Red Flags • Encryption Software • Technology/Equipment on Commerce Control List (EAR) OR the Munitions List (ITAR) • Sanctioned Countries • Foreign Nationals/Travel • Proprietary Information
Assistance for Export Controlled Technology • If your technology is export controlled, assistance is available to Determine: • The correct classification and reason(s) for control • If a license is required to the intended destination and/or recipient • Checking for an available license exception or exclusion • Checking the lists of restricted/debarred individuals and institutions denied export privileges; and • Applying for a license, if necessary • Contact Information Office of Research and Sponsored Programs James Hall 200 Mullica Hill Road Glassboro, NJ 08028
Rowan’s Commitment for Export Control • Creating processes charged with monitoring export compliance; • Appointing an export compliance official to oversee the export compliance program; • Implementing a process for screening third-parties (Visual Compliance); • Addressing record keeping requirements; • Establishing a procedure for employees to report suspected violations; and • Providing a means for investigating potential violations and when necessary, reporting them to appropriate government agencies.
Consequences of Non-Compliance • Failure to comply with U.S. export control laws can result in severe penalties to individuals as well as the university: • Civil penalties up to $500,000 each violation • Criminal penalties up to $1,000,000 each violation • Imprisonment up to 10 years.