Export Control Regulationsfor Researchers

Why Is Compliance Important?

Potential civil and criminal penalties, for the individual and the institution

Loss of export privileges Risk to reputation; bad

publicity Limiting participation of

foreign nationals in University research is not realistic and contrary to policy

Three U.S. Export Licensing Programs

Cuba

U.S. Department of State (Office of Defense Trade Controls) controls defense articles,

defense services, and related technical data, including most

space-related articles.U.S. Department of Commerce (Bureau of Industry and Security)

controls “dual-use” items – goods and technology with both

civilian and military/strategic uses.U.S. Department of the Treasury

oversees U.S. trade embargoes (Office of Foreign Assets Control) and enforces all three programs

at U.S. borders through U.S. Customs Service.

Law and Regulations

Commerce Department

State Department

Treasury Department

Export Administration

Act

Arms Export Control Act

Trading with the Enemy Act, Int’l

Emergency Economic

Powers Act, & Others

Export Administration

Regulations (“EAR”)

15 C.F.R. Parts 700-799

International Traffic in Arms

Regulations (“ITAR”)

22 C.F.R. Parts 120-130

Iraq Sanctions Regulations,

Terrorism Sanctions

Regulations, & Others

31 C.F.R. Parts 500-599

Commerce Control List

U.S. Munitions List

List of Specially Designated Nationals &

Blocked Persons

What Is an Export?ITAR 120.17, EAR 734.2(b)

An actual shipment or transmission of items subject to the EAR or ITAR (commodity, technical data, or software) out of the United States.

Releasing (including oral or visual disclosure) “technical data” or software “source code” to a “foreign person,” in the United States (“deemed export”).

Performing technical assistance, training, or other “defense services” for, or on behalf of, a “foreign person,” (including foreign corporations) whether in the United States (“deemed export”) or abroad

Re-exporting from foreign countries U.S.-origin goods or technical data, goods incorporating U.S. components, or goods manufactured from U.S. technology or re-exporting U.S.-origin “technical data” or software

Examples of Exports

SHIPPING OUT of US Physical shipments or hand

carried items Release of technical data or

software in a foreign country

RELEASING INFO in US Release of source code to a

foreign national in the US Release of technical data to a

foreign national in the US Inspections of U.S.

equipment and facilities by a foreign national

U.S. and Foreign PersonsITAR 120.15 & 16, EAR 772.1

“U.S. Person” means: a “Lawful Permanent Resident (8 USC 1101

(a)(20))– U.S. Citizen or national– Legal immigrant with a “green card”

a “Protected Individual” under the INA (8 USC 1324(b)(3))– designated an asylee or refugee– a temporary resident under amnesty

provisions– but does not include Protected Individuals

who:o fail to apply for citizenship within 6

months of becoming eligibleo have not been naturalized within 2

years after applying any entity incorporated to do business in

the United States

U.S. and Foreign PersonsITAR 120.15 & 16, EAR 772.1

“Foreign Person” means everyone else

includes foreign businesses not incorporated in the U.S.

EAR does not use the term “Foreign Person,” instead refers to “foreign national,” exempting Protected Individuals (See EAR 734.2(b)(ii))

U.S. Munitions List (USML)

I - Firearms II - Artillery Projectors III - Ammunition *IV - Launch Vehicles, etc... *V - Explosives, 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 X - Protective Personnel

Equipment XI - Military Electronics XII - Fire Control, Range Finder,

Optical and Guidance and Control Equipment

XIII - Auxiliary Military Equipment XIV - Toxicological Agents and

Equipment and Radiological Equipment

*XV - Spacecraft Systems and Associated Equipment

XVI - Nuclear Weapons Design and Related Equipment

XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated

XVIII - Reserved XIX - Reserved XX - Submersible Vessels,

Oceanographic and Associated Equipment

XXI - Miscellaneous Articles

Commerce Control List (CCL)

Category 0 - Nuclear Materials, Facilities and Equipment and Misc.

Category 1 - Materials, Chemicals, Microorganisms and Toxins

Category 2 - Materials Processing

Category 3 - Electronics Category 4 - Computers

Category 5 - Telecommunications and Information Security

Category 6 - Lasers and Sensors

Category 7 - Navigation and Avionics

Category 8 - Marine Category 9 - Propulsion

Systems, Space Vehicles and Related Equipment

Examples of Items Covered by Category 3 - Electronics

Category Example

Systems, Equip

& Components

Mass Spectrometers & Pulse Amplifiers

Test, Inspection, & Prod. Equip.

Equipment for the manufacturing of production semiconductor devices or material

Materials Hetero-epitaxial materials consisting of a “substrate” having stacked epitaxially grown multiple layers of: silicon, germanium, or compounds of gallium or indium

Software Computer-aided design software designed for semiconductor devices or integrated circuits having any of the following: design rules or circuit verification rules, simulation of the physically laid out circuits, or lithographic processing simulators for design

Technology Technical data for the development of production of any of the above items

Example: Shipment of Polygraph(Basic Steps)

Step 1 - Classification of item. Start by looking in the Commerce Control List under the category of electronics (Category 3) and product group which covers equipment (Product Group A). Then read through the list to find whether your item is included in the list. The ECCN for polygraphs is 3A981.

Step 2 – License requirements. These list the reason that the item is controlled. Polygraphs are controlled for “CC”, or crime control.

Example: Shipment of Polygraph(Basic Steps)

Step 3 – Destination Country. Check whether a license is required for the country.

Example: Shipment of Polygraph(Basic Steps)

Step 4 – Screening. Certain individuals and organizations are prohibited from receiving U.S. exports. Entity List – BIS list of organizations identified as

engaging in activities related to the proliferation of WMD.

Specially Designated Nationals and Blocked Persons List – OFAC list of individuals and organizations representing restricted countries or known to be involved in terrorism or narcotics trafficking.

Unverified List – BIS list of firms for which it was unable to complete an end-use check.

Examples of Items Covered by Category 1 Materials, Chem, Microorganisms, & Toxins

Category Example

Systems, Equip

& Components

Chemical Agents, including tear gas containing 1% or less of CS or CN, except containers net wt <20gm

Test, Inspection, & Prod. Equip.

Electrolytic cells for fluorine production with a production capacity >250 g of fluorine per hour

Materials Chemical precursors for toxic chemical agents (1C350) (Examples: benzilic acid; sodium bifluoride); human pathogens, zoonoses, and “toxins” (1C351) (Examples: Rickettsia rickettsii, Chlamydia psittaci); animal pathogens (1C352) (Example: goat pox virus); plant pathogens (1C354) (Example: Puccinia graminis)

Software “Software” for process control that is specifically configured to control or initiate “production” of chemicals controlled by 1C350

Technology Technical data for the development of production of any of the above items

Technical Data & TechnologyITAR 120.10, EAR 772.1

ITAR 120.10 defines “technical data” as

Information . . . required for the design, development production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles.

Invention covered by an invention secrecy order

Software directly related to defense articles

EAR 772.1 defines “technology” as Specific information necessary for the

“development,” “production,” or “use” of a product. The information takes the form of “technical data” or “technical assistance.”

Technical assistance may take forms such as instruction, skills training, working knowledge, and consulting services and may involve transfer of “technical data.”

“Technical data” may take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on other media or devices such as disk, tape, read-only memories.

Technical Data & Technology

ITAR 120.10, EAR 772.1

What is Not Controlled ?(The “Safe Harbor”)

Technical Data & Software (ITAR 120.10, EAR 772.1)

What is not defined as export controlled “technical data” or “software”?

Publicly available technical data and software

Published for sale, in libraries open to the public, or through patents available at any patent office

General scientific, mathematical, or engineering principles commonly taught in colleges and universities

Available through unlimited distribution at a conference, meeting, seminar, trade show, or exhibition (provided no previous government or industry restrictions on distribution applied)

Arises during or results from fundamental research, where no restrictions on publication or access accepted

Non-technical contract or business documents

National Security Decision Directive

NSDD-189

In September 1985, the Reagan Administration issued NSDD-189 in which it established the following policies: To the maximum extent possible, the products

of fundamental research should remain unrestricted.

Where the national security requires control, the mechanism for control of information generated during Federally-funded fundamental research in science, technology, and engineering at colleges, universities, and laboratories is classification.

No restriction may be placed upon the conduct or reporting of Federally-funded fundamental research that has not received national security classification, except as provided in applicable U.S. statutes.

President Bush’s National Security Advisor, Condoleezza Rice, reaffirmed NSDD-189 in November 2001.

National Security Decision Directive

NSDD-189

NSDD-189 defined “fundamental research” as

Basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community.

It is distinguished from research which results in information which is restricted for proprietary reasons or pursuant to specific U.S. Government access and dissemination controls.

National Security Decision Directive

NSDD-189

NSDD-189’s definition of “fundamental research” is reflected throughout the ITAR and EAR in terms of what research is subject to export controls.

Avoiding restrictions on access and dissemination of research findings in contracts with the U.S. Government and industry is a key strategy for minimizing export control issues in university and research laboratory settings.

What is Not Fundamental Research?

Given this definition of fundamental research, university research will not qualify as fundamental research if The university or research institution accepts any

restrictions on the publication of the information resulting from the research, other than limited prepublication reviews by research sponsors to prevent inadvertent divulging of proprietary information provided to the research by the sponsor or to ensure that publication will not compromise patent rights of the sponsor; or

The research is Federally-funded and specific access and dissemination controls regarding the resulting information have been accepted by the university or researcher.

Key EAR Exceptions

EAR 734.3(b) – “What is not subject to the EAR?” Publicly available technology and software,

except software controlled for EI (encryption) under ECCN 5D002 that– Are already published or will be published

– EAR 734.7– Arise during, or result from, fundamental

research – EAR 734.8– Are educational – EAR 734.9– Are included in certain patent applications

– EAR 734.10 See Supplement No. 1 to Part 734 for extensive

explanatory questions and answer regarding what is not subject to the EAR in the context of university and research laboratory activities.

Key EAR Exceptions

EAR 734.11 – “What is government research covered by contract controls? If research is funded by the U.S.

Government, and specific national security controls are agreed on to protect information resulting from the research, EAR 734.3(b)(3) will not apply.

Key EAR Exceptions

Examples of “specific national security controls” include: Requirements for prepublication review by the

Government, with right to withhold permission for publication

Restrictions on prepublication dissemination of information to non-U.S. citizens or other categories of persons

Restrictions on participation of non-U.S. citizens or other categories of persons in the research.

BUT: A general reference to one or more export control laws or regulations or a general reminder that the Government retains the right to classify is not a “specific national security control.” (EAR 734.11)

Key ITAR Exemptions (used in Space Science Research)

ITAR 125.4(b)(10) – Exempts from licensing requirements disclosures of unclassified technical data in the U.S. by U.S. institutions of higher learning to foreign persons who are their bona fide and full time regular employees. Employee’s permanent abode throughout the

period of employment must be in the U.S. Employee must not be a national of a

country to which exports are prohibited pursuant to ITAR 126.1 (e.g., Belarus, Cuba, Iran, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Somalia, and Sudan—list as of 7/2003)

The institution informs the individual in writing that the technical data may not be transferred to other foreign persons without the prior written approval of the Office of Defense Trade Controls

Key Exception: Publicly Available Software

Software (and technical data) is published when it is available for general distribution either for free or at a price that does not exceed the cost of reproduction and distribution.

Such reproduction and distribution costs may include variable and fixed allocations of overhead and normal profit for the reproduction and distribution functions either in your company or in a third party distribution system. Such costs may not include recovery for development, design, or acquisition because the provider of the software does not receive a fee for the inherent value of the software.

What is Publicly Available Software?

If the source code of a software program is publicly available, then the machine readable code compiled from the source code is software that is publicly available.

Note that encryption software controlled under ECCN 5D002 for “EI” (Encryption Items) reasons on the Commerce Control List and mass market encryption software with symmetric key length exceeding 64-bits controlled under ECCN 5D992 remain subject to the EAR.

Key Exception: EncryptionSoftwareTechnology & Software Unrestricted

Encryption source code controlled under ECCN5D002 that would be considered publicly available, and corresponding object code resulting from compiling such source code, may be exported under Exception TSU (but not knowingly to Cuba, Iran, Iraq, Libya, N.Korea, Sudan or Syria)

Provide written notification to Commerce (BIS) of the Internet location of the source code or a copy of the source code by the time of export (see 740.13)

Posting of source code or object code on the Internet (e.g. FTP or World Wide Web site) where it may be downloaded by anyone would not establish ‘knowledge’ of a prohibited export or reexport.

What can you take with you overseas?

Exception TMP: “Tools of Trade”

Usual and reasonable kinds and quantities of tools of trade (commodities and software) for use by the exporter or employees of the exporter in a lawful enterprise

The tools of trade must remain under the effective control of the exporter or the exporter’s employee (retain physical possession of the item, locked in hotel safe, or guarded)

Encryption commodities and software may be pre-loaded on a laptop, handheld device or other computer or equipment

All tools of trade may accompany the individual departing from the US or may be shipped unaccompanied within one month before the individual’s departure from the US, or at any time after departure

License Exception TMPTemporary: “Tools of Trade”

All commodities and software, if not consumed or destroyed in the normal course of authorized temporary use abroad, be returned as soon as practicable but no later than one year after the date of export

No tools of the trade may be taken to Cuba or Sudan

Reference 15 CFR Part 740.9(a)(2)(i) for TMP “Tools of Trade” License Exception

Take Home Messages

Do’s and Don’ts: General

Do NOT Ship Any Item Outside the U.S. without first checking the ITAR and EAR Lists to determine if the item is controlled (This includes Outgoing MTA’s, Software Licenses, and any Agreement Deliverables)

Secure License Approval (through campus contact or UCOP for ITAR) or verify license exception PRIOR to Shipment for all controlled items

Do NOT Accept Publication or Access Controls in research agreements (regardless of whether federal, state, or private)

Do NOT create special training or access programs limited to select foreign companies or foreign nationals without first securing a government-approved Technical Assistance Agreement

Do’s and Don’ts: Contract Clauses

Screen all proposed research contracts from government and industry for access and dissemination restrictions that might jeopardize the project’s qualification as “fundamental research.”

Do NOT Accept clauses, such as: DOD Clause 252.204-7000, Disclosure of Information FAR Clause 52.227-17, Rights in Data, Special Works Airforce Clause 5352.227-9000, Export Controlled

Data Restrictions Army Clause 52-04-4401, Foreign Nationals

Performing Under Contract (Feb 2002) Questionnaire for Public Trust Positions (SF89P) or

National Agency Check/Name Check Request DD2345, Militarily Critical Technical Data Agreement Watch out for flow down language!

Do’s and Don’ts: Confidentiality Clauses

Review any Confidentiality/Non-Disclosure Agreements to insure that UC is not assuming the burden of restricting dissemination based on citizenship status or securing license

Allow Commercial Contractor to Transfer Export Controlled Data (as long as it isn’t proprietary), or Proprietary Data that isn’t Export Controlled (See EAR 734.8(b)(4) and EAR Supplement 1, Section D, Question 2)

In limited cases, can agree that the individual to receive export controlled proprietary data will not disclose it to anyone (including other UC personnel) in most cases, proprietary data from a commercial entity that is also export controlled cannot be accepted or used in University research.

Can agree that UC will comply with Export Regulations; can not agree that data generated by UC in the course of the research is export controlled

Do’s and Don’ts: Citizenship Info

Do NOT provide citizenship, nationality, or VISA status information for project staff to others or include such information in proposals. It is a violation of the INS regulations, of the Federal Privacy Act, and of the California Information Practices Act to do so. It is also contrary to University policy to discriminate on this basis or to select research project staff on any basis other than merit. See C&G Memo for guidance: http://www.ucop.edu/raohome/cgmemos/04-02.html

Do NOT agree to background checks or other arrangements where the external sponsor screens, clears, or otherwise approves project staff. University policy allows for background screening conducted by the University when appropriate to the position.

Do’s and Don’ts: Software

Whenever possible, make University created software, databases, and other technical data “publicly available” Publication in periodicals, books, print, electronic, or

other media available to a community of persons interested in the subject matter either free or at a price that does not exceed the cost of reproduction and distribution (See EAR Supplement 1, Questions A(1) - A(6)

If the source code of a software program is publicly available, then the machine readable code compiled from the source code is software that is publicly available and, therefore, not subject to the EAR

The cost of reproduction and distribution may include variable and fixed allocations of overhead and normal profit for the reproduction and distribution functions but may not include recovery for development, design, or acquisition, such that the provider does not receive a fee for the inherent value of the software.

Do’s and Don’ts: Software License

Do not agree to software license restrictions on access to or use of the software by

nationals of certain countries, particularly those from Country Group D

restrictions on dissemination of the ‘direct product’ of the software

ask the software provider to identify the ECNN number that controls the software, and research the applicability of control, given the possibility that the software provider is being overly cautious and the software is not, in fact, controlled

Do’s & Don’ts: EncryptionSoftware

Technology & Software Unrestricted

Encryption source code controlled under ECCN5D002 that would be considered publicly available, and corresponding object code resulting from compiling such source code, may be exported under Exception TSU (but not knowingly to Cuba, Iran, Iraq, Libya, N.Korea, Sudan or Syria)

Provide written notification to Commerce (BIS) of the Internet location of the source code or a copy of the source code by the time of export (see 740.13)

Posting of source code or object code on the Internet (e.g. FTP or World Wide Web site) where it may be downloaded by anyone would not establish ‘knowledge’ of a prohibited export or reexport.

Do’s and Don’ts: Embargoes

Do NOT travel to the Balkans, Burma, Cuba, Iran, Iraq, Liberia, Libya, North Korea, Sudan,or Syria, for research or educational activities without first contacting the campus VC-Research to secure a license from the Office of Foreign Assets Control. These are embargoed countries. A general license for Cuba may cover you; all other countries require a specific license.

Review scope of work and collaborators to identify any projects that may require travel to embargoed countries. UC has secured OFAC licenses for research in embargoed countries. It simply takes a bit of time.

UC Policy References

C&G Memo 04-02: Provision of Information on Citizenship, Visa Status, Nationality or Country of Origin: Federal and State Law and Regulation http://www.ucop.edu/raohome/cgmemos/00-05.html

C&G Memo 00-05: Unacceptable Controls Based on U.S. Citizenship Status http://www.ucop.edu/raohome/cgmemos/00-05.html

C&G Memo 90-03: Acceptance of Funds Restricted to U.S. Citizens http://www.ucop.edu/raohome/cgmemos/90-03.html

UCOP Website on Export Regulations http://www.ucop.edu/research/policies/exportcontrols.htm

Is the Item “Export Controlled?”

EAR List at: http://www.access.gpo.gov/bis/ear/ear_data.html

ITAR List at: http://www.pmdtc.org/docs/ITAR/22cfr121_Part_121.pdf

For EAR Items: 1)Check the “reason for control”; 2)Check country chart; 3)Determine if license required in the column for the country where item to be shipped

For EAR Item, if no “check” in control column for country, then ship under NLR (no license required); If item being shipped is not on Commodity Control List, then ship EAR99 (exempt)

For ITAR Item, if on list, contact UCOP; license will be required because there is no EAR equivalent “country chart”

Questions?