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Compliance with Export Controls: The Role of OSP and SPA

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Compliance with Export Controls: The Role of OSP and SPA

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    3. U.S. Export Controls Cover any item in U.S. trade (goods, technology, information) Extend to U.S. origin items wherever located, including U.S. (Jurisdiction follows the item or technology world wide) Controls have broad coverage and limited exclusions License may be required to export

    4. Today’s national security concerns Missile technology Nuclear nonproliferation Chemical and biological weapons Anti-terrorism, crime control, regional stability, short supply, UN sanctions Embargoes and trade sanctions

    5. Agencies that govern export controls There are three principal agencies U.S. Department of State U.S. Department of Commerce U.S. Department of the Treasury

    6. http://www.pmddtc.state.gov/ U.S. Department of State Directorate of Defense Trade Controls (DDTC) International Traffic in Arms Regulations (ITAR) US Munitions List Inherently military technologies

    7. http://www.bis.doc.gov/index.htm U.S. Department of Commerce Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) Commerce Control List (CL) “Dual-Use” technologies (primary civil use)

    8. http://www.ustreas.gov/offices/enforcement/ofac/ U.S. Department of Treasury Office of Foreign Asset Control (OFAC) Prohibits transactions and/or interactions with countries, entities and individuals subject to trade sanctions

    9. Providing services under OFAC In general, OFAC programs prohibit the provision of services to countries subject to US sanctions without a license Services may include: Conducting surveys and interviews in sanctioned countries Providing marketing & business services to persons in sanctioned countries Creating new information materials at the behest of persons in a sanctioned country Financial transactions Engaging the services of persons in a sanctioned country to develop new information materials NOTE: Restrictions vary by country

    10. http://www.fas.org/irp/offdocs/nsdd/nsdd-189.htm FUNDAMENTAL RESEARCH Fundamental Research means basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.” The Fundamental Research Exclusion applies only to the dissemination of research data and information, not to the transmission of material goods.

    11. FUNDAMENTAL RESEARCH EXCLUSION IS DESTROYED IF 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. NOTE: “Side deals” between a PI and Sponsor destroy the fundamental research exclusion and may also violate university policies on openness in research

    12. http://www.bis.doc.gov/deemedexports/deemedexportsfaqs.html#1 U.S. export controls cover transfers of technology to a foreign national within the U.S. (the transfer outside the U.S. is deemed to apply when a foreign national receives the information in the U.S.) Applies to technology transfers under the EAR and the provision of ITAR technical data and defense services Includes source code (not encrypted source code) Unless the fundamental research exclusion applies, a university’s transfer of controlled technology to a non-permanent resident foreign national who is not a full-time university employee in the U.S. may be controlled and/or prohibited Deemed Exports

    13. http://www.bis.doc.gov/deemedexports/deemedexportsfaqs.html#1 Technology is transferred for export when: It is available to foreign nationals for visual inspection (such as reading technical specifications, plans, blueprints, etc.) When technology is exchanged orally When technology is made available by practice or application under the guidance of persons with knowledge of the technology Deemed Exports

    14. Importance of OSP and SPA Serve as the liaison between researchers and sponsored programs office to identify export control issues. Stand at the “front lines” for protecting the fundamental research exclusion

    15. Proposal Submission Proposal submission gives the contract administrator a basic understanding of the research project at the earliest stage. Proposal submission cover sheet can efficiently filter out the majority of research proposals which poses no export control concerns, and assist with identifying those that may.

    16. Proposal Submission Questions Will any portion of the project be performed at a site other than Institution’s campus or facilities or another US academic/hospital research facility? Will any portion of the project be conducted outside the United States? Under this project, will the results and/or deliverable be sent to a foreign country or foreign citizen prior to publication? Has any collaborator or the sponsor indicated that export-controlled items are necessary for the work to be performed or that they cannot be shared with non-US citizens?

    17. Proposal Review While reviewing the statement of work and proposal submission, the contract administrator should consider whether they contain any of language or terms that: References U.S. export regulations Restricts non-U.S. entity participation based on country of origin Prohibits access by non-U.S. citizens to project information Prohibits the hiring of non-U.S. persons References the need to train specific personnel for a special purpose; i.e., a defense service

    18. Proposal Review (cont) Addresses the use of proprietary information Addresses security concerns Grants the sponsor pre-approval right on publications Grants the sponsor a right to prepublication review for matters other than the inclusion of patent and/or proprietary sponsor information Allows the sponsor to claim resulting research information as proprietary or trade secret.

    19. Troublesome terms and conditions Terms that can destroy the Fundamental Research Exclusion Publications restrictions Restrictions that single out foreign faculty, students or staff preventing their access to research and educational requirements Sponsor wants the right to approve any foreign personnel that would work on the program. Sponsor requires certification that no foreign nationals are working on the agreement Sponsor may limit access of its facilities to only U.S. citizens or only allow U.S. citizens to perform under the agreement

    20. Loss of “exporting” privileges (usually for 30-90 days) could cripple a university’s normal activities Puts federal funding at risk -- for the university and for the individual Violation of specific sanctions laws may add additional penalties Public relations and media attention -- Most settlements with the Commerce, State or Treasury Departments generally become public. Court cases are always public! Penalties for Noncompliance

    21. State Department (ITAR) Criminal violations: up to $1,000,000 per violation, up to 10 years imprisonment Civil penalties: seizure and forfeiture of the articles and any vessel, aircraft or vehicle involved in attempted violation, revocation of exporting privileges, fines of up to $500,000 per violation Commerce Department (EAR) Criminal violations: $50,000-$1,000,000 or five times the value of the export, whichever is greater per violation (range depends on the applicable law), up to 10 years imprisonment Civil penalties: loss of export privileges, fines $10,000-$120,000 per violation Treasury Department (OFAC) Criminal violations: up to $1,000,000 per violation, up to 10 years imprisonment Civil penalties: $12,000 to $55,000 fines (depending on applicable law) per violation. UCLA recently fined for an OFAC violation involving an activity with Iran. Penalties for Noncompliance

    22. Harvard Export Control Policy and Procedures Harvard University Export Control Policy http://www.provost.harvard.edu/policies_guidelines/Export%20Control_Compliance_Policy%20Statement_6-19-07.pdf Harvard University Export Control Policy and Procedures http://www.provost.harvard.edu/policies_guidelines/Compliance_Manual_June_2007.pdf

    23. Where is the information? Bureau of Industry and Security (BIS) Department of Commerce http://www.bis.doc.gov/ Directorate of Defense Trade Controls (DDTC) Department of State http://pmddtc.state.gov/ Office of Foreign Assets Control (OFAC) Department of Treasury http://www.treas.gov/offices/enforcement/ofac/ Export Administration Regulations http://www.access.gpo.gov/bis/ear/ear_data.html International Traffic in Arms Regulations http://pmddtc.state.gov/itar_index.htm

    24. CONTACT INFORMATION Eileen Nielsen enielsen@hsph.harvard.edu 617-432-7350

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