Export Controls: Key Issues

Debra Murphy

Candyce Lindsay

Susan Metosky

What is an Export?•An export under the regulations is any shipment, transmission or transfer of controlled physical items, information or software, technical data to foreign persons in the US or abroad without an exportlicense or exemption.

•Transmission of information or technology including by phone, fax, email and conversation are considered an export to the home country of a foreign national.

Why Do We Have Export Controls?

Objective – to protect U.S. national security and foreign

policy interests by:– Preventing terrorism– Restricting exports of goods and technologies that

may contribute to military potential of foreign adversaries

– Protecting loss of goods and key technologies that could affect the U.S. economy

Export Control

Export Control Laws regulate distribution of

controlled information and technology to

foreign nationals and foreign countries for

reasons of foreign policy and national security of

the people and technology of the United States.

Note: Export controls laws apply to all activities – not just sponsored projects.

Export Control Laws?United States Export Controls are governed by three

principal sets of regulations •U.S. Department of Commerce

– Export Administration Regulations (EAR) – dual use (civilian or military) technology

• U.S. Department of State– International Traffic in Arms Regulations (ITAR) – military

• U.S. Department of Treasury– Office of Foreign Assets Control (OFAC) – sanctioned countries

controls

What is controlled by the regulations?

U.S. Department of Commerce - Export Administration Regulations (EAR) – dual use (civilian or military) technology

The Commerce Control List (CCL) in made up of 10 categories dual use items such as:

• Nuclear Materials, Facilities and Equipment and Misc.• Chemicals, Microorganisms and Toxins• Electronics• Computers• Telecommunications and Information Security• Lasers and Sensors• Propulsion Systems, Space Vehicles and Related Equipment

What is controlled by the regulations? U.S. Department of State – International Traffic in ArmsRegulations (ITAR) – military

The ITAR Munitions Control List contains 17 categories including items such as: • Firearms and Ammunition • Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines • Explosives, Propellants, Incendiary Agents, and Their Constituents • Vessels of War and Special Naval Equipment • Tanks and Military Vehicles • Aircraft, [Spacecraft] and Associated Equipment • Military Training Equipment • Protective Personnel Equipment

What is controlled by the regulations? U.S. Department of Treasury - Office of Foreign Assets Control

(OFAC) – sanctioned countries controls

OFAC administers and enforces economic and trade sanctions that have been imposed against specific countries for reasons of foreign policy, national security, or international agreements.  The controls target countries involved in terrorism, international narcotic traffickers and those engaged in activities related to the proliferation of weapons of mass destruction. The embargoed countries are frequently referred to as the T – 7s. Information on all countries currently subject to embargo and boycott programs are available at US Treasury Website.

Areas of Export Concern at ASU

• Bioanalytics - Assay • Bioanalytics - Devices • Biomaterials • Biosecurity • Drug Screening • Environmental Biotech/Clean Tech • Industrial Biotechnology • Medical Devices • Medical Imaging • Neutraceuticals • Therapeutics & Vaccines

Export Controls and ASU Researchers

Most research activities (over 90%) performed at ASU are fundamental in nature and are not controlled by the export regulations – so long as we remember that the controls are the law of the land and we must ensure that we can demonstrate due diligence in protecting what needs to be protected.

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Exclusions from Export Control Laws

• Fundamental Research Exclusion (ITAR, EAR)

• Public Domain Exclusion (ITAR, EAR)

• Education Exclusion (ITAR, EAR)

Fundamental Research

Fundamental research means basic and applied researchin science and engineering, the results of which are ordinarily 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.

Fundamental Research• Research conducted by faculty and students at ASU will

normally be considered fundamental research ~93%

• University based research is not considered “fundamental research” if the university or its researchers accept restrictions on the publication or dissemination of the results of the project

• Prepublication approval by a sponsor or other restrictions on publication invalidates the FRE.

• What does FRE allow? Exchanging research information with foreign nationals here and abroad. FRE only covers information and not physical items.

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Public DomainPublic Domain Exclusion (ITAR, EAR) allows for export or transfer information and research results that are generally available to the interested public through:

–Libraries, bookstores, or newsstands,–Trade shows, meetings, seminars in the U.S. open to the public, –Published in certain patent applications, or–Websites accessible to the public.

Note: the public domain exclusion applies to information and research results – notphysical equipment, substances, etc.

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Education Exclusion

The Education Exclusion (ITAR, EAR) allows for the transfer information to students, including students who are foreign nationals, concerning general scientific, mathematical or engineering principles commonly taught in school, colleges or universities

Key Issues• Foreign Travel

– to sanctioned countries ( Iran, North Korea, Syria, Sudan)– hand carrying export controlled items (GPS, prototypes, etc.)– controlled technical data (blueprints, engineering designs, etc.)

• Shipping Anything to any Foreign Country– always requires export certification by shipper to document export

determination (ITAR, EAR, NLR, ECCN, USML). ORIA recommends the use of FEDEX Online as that provides the necessary information to document shipping safeguards.

• Receiving Export Controlled Data from Sponsor– requires safeguarding (TCP)

More Key Issues• Deemed Exports – non-US persons in the United States– same as exporting to the individual’s country

• Restricted Party Screening– government lists of restricted entities and individuals– ASU cannot conduct any type of business with– screen all participants on export controlled research

Some Sponsors of Export Concern

• Industry Contracts, Foreign Sponsors and Other Agreements

• Department of Defense Agencies• Department of Homeland Security• Department of Energy• NASA• DARPA, DTRA, ONR, etc.

ASU Strategies

1st

•Fundamental Research Exclusion

2nd

•Negotiate Contract Language

3rd

•Exemptions/Exceptions

4th

•Apply for License

Consequences of Non-Compliance ITAR

Criminal and Civil Up to $1 million per violation and 10 years imprisonment Professor Roth (Univ. TN) just convicted of 18 violations. Sentenced to 4

years in prison July 2009. Appeal was denied in 2010. OFAC

Criminal and Civil: $11k TO $10M per violation and 10 to 30 years imprisonment Augsburg College, fined $36k for trips to Cuba - new easing of restrictions Michael Moore filming of “Sicko”

EAR Criminal and Civil: $10K to $1 million or 5 times value of export,

whichever is greater, per violation, 10 years imprisonment Prof. Thomas Butler, Texas Tech – 2 years in prison for unauthorized exports (plague

bacteria) ITT fined $100M for exporting night vision materials without a license

Export Controls and ASU Researchers

How do we protect ourselves?

We provide: • Outreach to research intensive units to ensure we are all

educated in our responsibilities• Review services using state of the art tools (Visual

Compliance) to determine when controls are necessary.• Continuing review and education to investigators working

under technology control plans.

Prevention• Contact the Office for Research Integrity and Assurance (ORIA) for

assistance well in advance of an award – research.integrity@asu.edu

• Do not take export controlled technical data on laptops when you travel abroad. Keep laptops under your effective control at all times.

• Do not have foreign nationals on projects that are export controlled without a license.

• Read the contract & award for export control language.

• Protect FRE by not accepting publication restrictions from a sponsor.

• Watch for dissemination or foreign access restrictions from sponsor.

What We Can Do For You• Export reviews for faculty - RFP, award T&C, NDA, MTA• Assist with export control specific contract negotiation

language• Classification of items• License determination• Apply for a license• Screen foreign nationals• Research applicable exemptions• Provide guidance on export issues• Help with forms

Relatively New Export Issue

US Citizenship and Immigration Service I-129 Export

Control Certification requirement for H-1B Visa Applicants• USCIS requirement for institutions to certify that the

applicable EAR and ITAR regulations have been reviewed

• Part 6 of the form will be certified by collaboration between ORIA and ISSO

• Mandatory effective Feb 20, 2011

Q and A

• Your turn – what questions do you have for us?