1. Virginia tech | Office of Export and Secure Research Compliance
4/13/2017
August 25, 2010
Export Compliance
Jennifer P. May, J.D.
Associate Director of Compliance
MU Office of Research

2. Learning Objectives The Agencies: Who Sets the Rules?
The Definitions: Who and What is Impacted?
The Rules: What is Controlled?
The Exclusions: Who and What is Not Impacted?
The Research: How do we Protect this Work?
The Enforcement: What Happens if we Break a Rule?
The Rest: What else should we consider?

3. We need to comply because…
Growing foreign national employee and student populations involved in technology-related research
Growing portfolio of defense-related research, both with government and industry sponsors
increasing contractual restrictions on research
Growing portfolio of international collaborations
Failure to comply with U.S. export and sanction laws can result in severe penalties

4. The Agencies
Who Sets the Rules?

5. U.S. Department of State Directorate of Defense Trade Controls
International Traffic in Arms Regulations (ITAR)
U.S. Munitions List
Defense Articles
Defense Items
Technical Data about defense items
Defense Services
Controls exports and temporary imports* for purposes of:
U.S. national strategic objectives
Defense trade policies
Arms embargoes
Terrorism sanctions
*The ATF controls permanent import of munitions

6. U.S. Department of Commerce Bureau of Industry and Security
Export Administration Regulations (EAR)
Commerce Control List
“Dual use” items and technologies
Commerce also houses:
Patent and Trademark Office
Patents, trademarks, copyrights
Bureau of the Census
Trade statistics

7. Foreign Assets Control Regulations (FACR) Financial transactions
U.S. Department of the Treasury Office of Foreign Assets Control
Foreign Assets Control Regulations (FACR)
Financial transactions
Exportation or importation of goods and services
Blocked property
For the purposes of:
U.S. foreign policy goals
U.S. national security goals
Economic and Trade Sanctions
Targeted foreign countries
Terrorists
International narcotics traffickers
WMD proliferation activities

8. U.S. Department of Energy Nuclear Regulatory Commission
Export and Import of Nuclear Equipment and Materials Regulations (EINEMR)
Nuclear equipment or material such as reactors
Assistance to Foreign Atomic Energy Activities Regulations (AFAEAR)
Activities or training, directly or indirectly, involving nuclear technology
Other nuclear-related commodities and technology are under the export licensing authority of the Department of Commerce

9. Disclosure of Information DFAR 252.204-7000 (Dec 1991)
The Contractor shall not release to anyone outside the Contractor’s organization any unclassified information, regardless of medium (e.g., film, tape, document) pertaining to any part of this contract or any program related to this contract, unless—
The Contracting Officer has given prior written approval; or
The information is otherwise in the public domain before the date of release
Requests for approval shall identify the specific information to be released, the medium to be used, and the purpose of the release. The Contractor shall submit its request to the Contracting Officer at least 45 days before the proposed date for release.

10. Export-Controlled Items DFAR 252.204-7008 (Apr 2010)
The Contractor shall comply with all applicable laws and regulations regarding export-controlled items, including, but not limited to, the requirement for contractors to register with the Department of State in accordance with the ITAR. The Contractor shall consult with the Department of State regarding any questions relating to compliance with the ITAR and shall consult with the Department of Commerce regarding any questions relating to compliance with the EAR.
The Contractor's responsibility to comply with all applicable laws and regulations regarding export-controlled items exists independent of, and is not established or limited by, the information provided by this clause. …
The Contractor shall include the substance of this clause, … in all subcontracts. items.

11. Export-Controlled Items DFAR 252.204-7008 (Apr 2010)
from the federal register notice…
“The clause puts all contractors, including universities performing contracts for fundamental research only, on notice that they are responsible for complying with all applicable export control laws and regulations.”

12. The Definitions
Who and What is Impacted?

13. Key Definitions: Export
Sending or taking a tangible item outside of the U.S.
Sending from one foreign country to another (aka ‘re-export) items or technology of U.S. origin (including some foreign- made items that incorporate U.S.-origin components or technology)
Disclosing (including oral or visual disclosure) technical data, technology, or source code to a non-U.S. Person, in the U.S. or abroad
Providing technical assistance, training, or defense services to a non-U.S. Person, whether in the United States or abroad
22 CFR § and 15 CFR § 734.2

14. Key Definitions: U.S. Person
Persons who are permitted to access export controlled items without restrictions:
U.S. Citizens
Aliens who are “Lawful Permanent Residents”
Green Card holders*
Other “Protected Individuals”*
designated an asylee or refugee
a temporary resident under amnesty provisions
Any entity incorporated to do business in the U.S.
8 USC§1101(a)(20) and 8 USC§1324b(a)(3)

15. Key Definitions: Foreign Person
“Foreign Person” means everyone not a U.S. Person
Any foreign interest and any US Person effectively owned or controlled by a foreign interest
Includes foreign businesses not incorporated in the U.S. and persons representing other Foreign Persons
Includes: H-1B Work Visa, F1 Study Visa, J1 Training Visa, E1 Investors Visa, TN Work Visa, L1 Intra-Company Transfer Visa, K and V Fiancée Visas
EAR does not use the term foreign person, but rather foreign national – definition is the same as above

16. The Rules
What is Controlled?

17. Regulations International Traffic in Arms Regulations (ITAR)
Export Administration Regulations (EAR)
Office of Foreign Assets Control (OFAC) Sanctions Programs
EAR and ITAR sanctions

18. ITAR: U.S. Munitions List
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 – Directed Energy Weapons
XIX – Reserved
XX – Submersible Vessels, Oceanographic and Associated Equipment
XXI – Miscellaneous Articles
22 CFR §121

19. ITAR: Exports Determination
Export of U.S. Munitions List Items and Technologies restricted to all destinations.
Very few, narrow exemptions or exceptions

20. ITAR: Defense Article/Technical Data
Any item or technical data designated on the U.S. Munitions List
Technical Data
Information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance OR modification of defense articles
Does NOT Include:
information in the public domain, or
information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities, or
basic marketing information on function or purpose or general system descriptions of defense articles
22 CFR§120.6 and

21. ITAR: Defense Services
(1) “The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles;” or (2) “The furnishing to foreign persons of any technical data controlled under this subchapter (see § ), whether in the United States or abroad.” (3) “Military training of foreign units and forces, regular and irregular, including formal or informal instruction of foreign persons in the United States or abroad or by correspondence courses, technical, educational, or information publications and media of all kinds, training aid, orientation, training exercise, and military advice.”
22 CFR§120.9

22. EAR: Commerce Control List
Categories
0- Nuclear Materials, Facilities & Equipment & Miscellaneous
1- Materials, Chemicals, Micro-organisms and Toxins
2- Materials Processing
3- Electronics Design, Development and Production
4- Computers
5- Telecommunications & Information Security
6- Sensors and Lasers
7- Navigation and Avionics
8- Marine (ships & vessels)
9- Propulsion Systems, Space Vehicles and Related Equipment

23. EAR: Exports Determination
Export Control Classification Number (ECCN)
Technical performance characteristics
Type of control
End user
including nationality
End use

24. Export can occur in the United States or abroad.
EAR: “Deemed” Export
Any release of technology or source code subject to the EAR to a foreign national within the U.S or abroad.
Such release shall be “deemed” to be an export to the country or countries of origin of the foreign national.
Export can occur in the United States or abroad.
15 CFR§734.2(b)

25. EAR: Technology
Specific information (or source code) necessary for the “development”, “production”, or “use” of a product listed on the Commerce Control List
EAR
Use: Operation, installation (including on-site installation), maintenance (checking), repair, overhaul and refurbishing of controlled items
ITAR
Use: Design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles
15 CFR§772

26. EAR: Technical Assistance and Data
may take forms such as instruction, skills training, working knowledge, consulting services.
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.
15 CFR§772

27. OFAC: What is a Sanctioned Transaction?
Importation or exportation of goods or services of value to a sanctioned country, entity, or specially designated national.
Engaging in a financial transaction with a sanctioned country, entity, or specially designated national.
Travel to sanctioned countries
Sanctioned transactions generally do not apply to activities with foreign nationals from sanctioned countries lawfully admitted to the US

28. OFAC: Sanctioned Countries
List Based Sanctions
Balkans
Belarus
Burma
Cote D’Ivoire
Democratic Republic of Congo
Iraq
Lebanon
Liberia: Former Liberian Regime of Charles Taylor
Somalia
Zimbabwe
Anti-Terrorism
Diamond Trading
Counter Narcotics Trafficking
Non-Proliferation
Comprehensive Sanctions
Cuba
Iran
Sudan
North Korea
Syria

29. Other Restricted Parties Lists
In addition to export and sanctioned countries, there are also restricted entities and individuals:
Department of Commerce Denied Persons [BIS]
Department of Commerce Entity List [BIS]
Department of Commerce "Unverified" List [BIS]
U.S. Treasury Department Specially Designated Nationals and Blocked Persons, including Cuba and Merchant Vessels, Iran, Iraq and Merchant Vessels, Sudan Blocked Vessels [OFAC]
Department of State Designated Terrorist Organizations
Department of State Terrorist Exclusion List (TEL)

30. Other Countries of Concern
STATE (ITAR 126.1)
Policy of Denial: Belarus, Burma, China, Cuba, Eritrea, Iran, Lebanon, Liberia, North Korea, Sierra Leon, Sudan, Syria, Venezuela
Case-by-case Review: Afghanistan, Democratic Republic of the Congo, Haiti, Iraq, Libya, Vietnam, Somalia, and Sri Lanka

31. The Exclusions
Who and What is NOT Impacted?

32. Higher Learning Exclusions
Virginia tech | Office of Export and Secure Research Compliance
February 15, 2011
Higher Learning Exclusions
Many university activities and research projects are NOT subject to export controls/ foreign national restrictions due to regulatory exclusions:
Public Domain Information
Educational information
Bona fide Employee
Fundamental research

33. Public Domain or Publically Available Information
Materials available in newspapers and libraries, presented at publicly available conferences, trade shows
Websites accessible to the public for free and without the host’s knowledge or control of who visits
22 CFR § and 15 CFR §734.7

34. Educational Information
General science, math, and engineering commonly taught at schools and universities (ITAR)
Information conveyed in courses listed in course catalogues and in their associated teaching labs of any academic institution (EAR)
22 CFR § and 15 CFR §734.9

35. “Bona fide Employees” (ITAR only)
No license is required to share covered technical data with a foreign national who
Is not a national of certain countries;
Is a full-time, bona fide MU employee;
Has a permanent address in the US while employed; and
Is advised in writing not to share covered technical data with any foreign nationals.
NOTE: this does not apply to post-doctoral appointees or graduate/undergraduate students!
22 CFR §125.4(b)(10)

36. Fundamental Research
Basic or applied research at an accredited institution of higher learning in the U.S.
No publication restrictions
If federally funded, no access or dissemination restrictions on results
As long as the above conditions are met, the results of your research are not subject to ITAR/EAR restrictions even if the subject area of the research appears on the USML or CCL.
15 CFR §§734.2, 8 & 11 , CFR 22 CFR § a.8, and a.1

37. I’m confused… Not all “exports” are controlled
Information in the Public Domain is “uncontrolled” and is eligible for unrestricted dissemination
Information subject to Export Control is restricted for dissemination
May require a license, or
May be eligible for a license exception or exemption

38. The Research
How do we Protect this Work?

39. Conducting Restricted Research
Student Participation
Technology Control Plan
Physical and Information Security
Personnel Screening and Training
Project Close-Out

40. Student Participation in Restricted Research MU Graduate School Policy
Virginia tech | Office of Export and Secure Research Compliance
February 15, 2011
Student Participation in Restricted Research MU Graduate School Policy
Research Must Be Open to Public Disclosure
Students are prohibited from using research (data, results, methods or other content) in their theses or dissertations that could restrict subsequent publication or public disclosure of these documents. Examples of restricted information include classified or proprietary materials.
It is important to note that these restrictions do not apply to nonthesis or nondissertation research that is approved by the student's adviser and allowed by University of Missouri policies. Questions regarding the applicability of this policy to thesis or dissertation content should be referred to the Graduate School.

41. Technology Control Plan
Institutional Commitment
Commodity Jurisdiction and Classification
Physical Security Plan
Information Security Plan
Personnel Screening Procedures
Project Completion Requirements
Annual Self-assessment Certification

42. Physical and Information Security
Minimum “one lock” principle for securing controlled items
Restricted work area – prevent visual and oral disclosure, key control, custodian services escorts
Storage and Marking
Computer, Data Storage and Transmission
Encryption or Password Protection, recommend at least 12 characters including #s & special characters

43. Personnel Screening and Training
All personnel with access to controlled items:
are screened for nationality and restricted party lists
are required to attend export training
Includes graduate students, undergraduate students, technicians, and IT managers
Screening must include:
subcontractors
consultants
international suppliers

44. Project Closeout
Closeout procedures for destruction or returning of items to sponsor
Post-award monitoring of award activity (adding personnel, change in SOW, etc.)

45. The Enforcement
What Happens if we Break a Rule?

46. Penalties for Violations
ITAR (Defense-related)
Criminal Fines: up to $1M and 20 years in prison
Civil Fines: up to $500K and Forfeitures
Debarment/Loss of Federal Funding
EAR/FACR (Dual-Use / Sanctions)
Denial of export privileges
Debarment
Civil Fines: up to $250K or 5X value of exports
Penalties can apply to you (as an individual) and to the university!

47. Enforcement Actions ITAR EAR Classified
Professor sentenced to 4 yrs in prison
University currently under criminal investigation
1 CY08 university directed disclosure
10 CY09 university voluntary disclosures
EAR
University nearing settlement over EAR99 violations with Chinese entity
Classified
University currently under investigation for classified material spillage

48. J. Reece Roth Emeritus Professor of Electrical and Computer Engineering University of Tennessee
Sentenced to 4 years in prison for “illegally exporting military technical information relating to plasma technology designed to be deployed on the wings of drones operating as a weapons or surveillance systems.”
Evidence included exports of technical data to foreign national graduate students in his lab.
Monday, October 3, 2011 – U.S. Supreme Court denied certiorari.

49. The Rest
What else should we consider?

50. Shipping
Any item valued at $2500 or greater may require an Electronic Export Information submission to the Bureau of Census
Many items require export licenses or other government approvals to ship outside of the US
Consult your Office of Research prior to shipping or taking UMSL property outside of the United States

51. Travel Commerce and State have regulations that affect:
Physically taking items with you on a trip such as
Laptops
Encryption products on your laptop
Data/technology
Blueprints, drawings, schematics
Supplying certain technologies/data at a “closed” conference or meeting
Note-taking not allowed
Not open to all technically qualified members of the public

52. Travel
The Office of Foreign Assets Control (OFAC) has regulations that affect:
Money transactions and the exchange of goods and services in certain countries – providing “value”
Travel to sanctioned countries
Doing business with certain people or entities
Commerce, State, and OFAC have “lists”

53. Travel
A license could be required depending on what you are taking and the country you are traveling to
A license or technical assistance agreement would be required if you were providing a “defense service” to a foreign person
A defense service means the furnishing of assistance (including training) to a foreign person relative to a defense article. It also includes furnishing any technical data relative to a defense article.
There are consequences if you violate the regulations!

54. Travel
In most cases, if you need to work abroad, a license exception or exemption is available!
EAR: “TMP” or “BAG”
An exception/exemption is not needed if you are taking a “clean” laptop to countries other than Cuba, Syria, Iran, North Korea, or Sudan
Items, software should be evaluated before travel
Consider reviewing State Department advisories prior to travel for information on your destination.

55. Questions?