1. Export Control Officer
Export Controls: Just the Basics – How to Keep Your Faculty & Researchers Out of Trouble!
Kay Ellis
Export Control Officer
Josh Estavillo
University Attorney

2. Export Basics: Terms & Regs
Overview
Strategic Technologies
Presenters:
Kay Ellis
Josh Estavillo
Identifying Red Flags
Travel Abroad
Help me Choose
Tips on Staying Compliant

3. Export Alphabet Soup Export regulations Basic Terms
Sensitive technologies

4. Why do Universities need to comply with the Export Regulations?
It’s the law
Security around the world changed after 9/11
Consequences of non-compliance can result
negative publicity, civil or criminal violations
Violations can range from $250,000 to $1 million per violation or
Imprisonment
The export regulations apply to Universities too!

5. Why does the government control exports?
The government controls certain technologies that it considers to be strategically important for:
National Security Reasons
Nuclear Non-Proliferation Reasons
Missile Technology Controls
Anti-Terrorism
Chemical & Biological Controls
Regional Stability
Crime Control Measures
Anti-boycott Reasons
Economic Sanctions

6. Universities in the Media
University of Tennessee Professor Found Guilty on 18 Counts of Export Violations
Why should Caltech care about complying with the export regulations? Reseachers who do not have a good understand of the limits of the Fundamental Research Exclusion or when the export regulations apply can result in violations for both the individual and the institution, and can result in negative publicity for campus. The consequences of non compliance can be severe.
At the University of Tennessee, Professor Roth was arrested by customs officials upon his return from China for violating the ITAR regulations. Export controlled information was found on his laptop. He was subsequently found guilty on 18 counts and was sentenced to 23 months in jail.
Satterfield, Jamie “Retired UT Prof guilty; case gained national attention.” (accessed on March 22, 2010).

7. Export 101 Terms you should know Export Foreign Person
Technical Assistance
Technical Data
Fundamental Research Exclusion
Limits
Jeopardizing FRE
Export Regulations
ITAR
EAR
OFAC
Sensitive Technologies
Civil Use
Military or Space Applications

8. Regulations likely to affect your export are . . .
U.S. Department of State
International Traffic in Arms Regulations (ITAR) - Controls Defense Articles & Defense Services (technical data and know-how) found in the U.S. Munitions List (USML).
For example: Category XV - spacecraft systems, science instruments on spacecraft & associated equipment and software
U.S. Department of Commerce
Export Administration Regulations (EAR) - Controls items on the Commerce Control List (CCL) having a commercial or dual-use (military/strategic and commercial) application
For example: high performance computers and encryption software
Treasury Department
Office of Foreign Assets Control (OFAC) - Trade Sanctions, Embargoes, Restrictions on Transfers to Certain End-Users, Terrorism, Anti-Narcotics

9. Export . . . When does it occur?
An export is the transfer of export controlled information, commodities or software either inside the U.S. (deemed export) or outside the U.S.
Exports can occur in many ways:
Mail
Agent or broker acting on your behalf – i.e., a Freight Forwarder
Face-to-Face
Website
Visual inspection that reveals technical data
Conference
Hand-carried items – laptop, memory devices

10. Foreign Person is defined as . . .
Any person not a U.S. citizen or legal permanent resident (green card holder)
Any person not granted political asylum
Any U.S. Person employed by or representing a foreign entity
Foreign Entity
Any partnership or group not incorporated or organized to do business in the U.S.
Any foreign government

11. Technical Assistance . . . “Know-how” . . . Defense Service . . Training
Technical Assistance (defense service) means the furnishing of assistance (including training) to Foreign Persons in the United States (deemed export) or abroad (technology transfer)
. . . about the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing, or use of an export controlled item -- whether EAR or ITAR controlled.

12. Technical Data . . . Technology Transfer
Technical Data or Technology is information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of an export controlled item.
The information can be in the form of
blueprints, drawings, models, photographs, plans, instructions and documentation; tech data
includes software related to an export controlled item.

13. Sensitive Technologies
COMMERCIAL APPLICATIONS
SPACE, ROCKETs & MILITARY APPLICATIONS

14. “The EAR” (Export Administration Regulations): Commercial & Military Use (Dual-Use)
Commerce Control List Categories
0 = Nuclear materials, facilities and equipment (and miscellaneous items) 1 = Materials, Chemicals, Microorganisms and Toxins 2 = Materials Processing 3 = Electronics 4 = Computers 5 = Telecommunications and Information Security 6 = Sensors and Lasers 7 = Navigation and Avionics 8 = Marine 9 = Propulsion Systems, Space Vehicles, and Related Equipment

15. “The ITAR” (Int’l Traffic In Arms Regulations): Military, Rockets or Space Applications
USML Categories (The ITAR)
I Firearms, Close Assault Weapons and Combat Shotguns
II Guns and 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 and Training
X Protective Personnel Equipment and Shelters
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
XX Submersible Vessels, Oceanographic and Assoc. Equipment
XXI Miscellaneous Articles (Software, components, etc.)

16. Long Reach of the ITAR ITAR includes
Includes commodities and technologies that have predominant military use or space application;
Items that started out as having civil application but were later adapted or modified for military application;
Dual-Use items that contain or use ITAR controlled articles/technology, i.e., “see through rule”

17. What’s not export controlled?
Information in the public domain.
Information excluded under the Fundamental Research Exclusion (FRE)
Basic marketing and general system descriptions

18. Fundamental Research Exclusion in the Regs & Nat’l Policy (NSDD-189)
Fundamental Research Exclusion (FRE) in the regs and Nat’l Policy directive: NSDD-189 creates a safehaven…
“Accredited Universities of higher learning conducting basic and applied research the results of which are intended to be published…and are not subject to access or publication restrictions.”

19. National Policy re Fundamental Research --NSDD-189
“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 the results of which ordinarily are restricted for proprietary or national security reasons.”

20. Limits to Fundamental Research Exclusion – Subject to Export Controls or Other Prohibitions
Fundamental Research does NOT cover --
Exports of Hardware, Software, Technology
Financial Dealings with Prohibited Parties or Entities
Export Controlled activities – “technical assistance”
Other Transactions Involving Embargoed or Sanctioned Parties/Countries

21. What is a Restricted or Prohibited Party?
Debarred Parties
Drug Traffickers
Specially Designated Nationals
U.S. Government [OFAC, BIS, State Dept.] lists of individuals & entities both in the U.S. and abroad that have committed export violations or other offenses.
Financial dealings or export transactions with Restricted or Prohibited parties is prohibited.
Violations are subject to severe penalties and fines.
Restricted Party Screenings (RPS) recommended depending on transaction

22. Payments to entities/persons on the denied lists could result in fines
Vendor Payments
Payments to entities/persons on the denied lists could result in fines
Includes payments to entities in the U.S. or abroad
Payment to foreign entity should raise a red flag! 22

23. Staying inside the “Safehaven”
IDENTIFYING RED FLAGS IN YOUR Proposals, Solicitations, AGREEMENTS

24. Outside FRE: Red Flags Certain restrictions will take you out of FRE:
Don’t accept publication or access restrictions in Non-disclosure agreements, contracts, agreements, etc.:
Review the Topic, Statement of Work
Is it a Military component for research?
Is it a Space-related component for research?
Foreign national participation
Sponsor is a foreign entity or government
Restrictions on foreign national participation
International Travel or work being done abroad

25. Red Flags in Non-Disclosure Agreements, RFPs, Proposals & Contracts
Got Publication or Foreign Person Access Restrictions in your agreement?
Export control language (not all result in restriction)
“Sponsor Approval” vs “Sponsor Review”
DFAR clauses and other “flow down” provisions from a “Prime” agreement
References to Classified information or Security Plans

26. Determining the need for a license (Export Controls Review)
Questions to Ask:
What is the nationality of researchers INCLUDING Professors and Research Assistants (grad students/post-docs)?
Will the researcher or grad student be receiving restricted information?
Is it EAR controlled?
Is it ITAR controlled? 26

27. Determining the need for a license (Export Controls Review)
Questions to Ask:
Is the project strictly defense-related?
If it’s ITAR, will the foreign national grad student need to discuss the data with the sponsor?
Destination: Is the research technology or goods going overseas to a foreign company, government or individual?
Does the PI want to take the technology/equipment/data with him or her? 27

28. Determining the need for a license
Steps to Take:
Determine if license is needed for the technology/end user/end use
Determine if license exemption or exception is available 28

29. Do I need to be concerned about export controls in this research?
Public domain, and
No equipment, encrypted software, listed-controlled chemicals, bio-agents or toxins, or other restricted technologies are involved, and
Information/software is already published, and
There is no contractual restriction on export, or
Fundamental Research
(note definitions and caveats associated with this exemption)
Equipment or encrypted software is involved, or
Technology is not in the public domain, and
Technology may be exposed to foreign nations (even on campus) or foreign travel is involved, and
The equipment, software or technology is on the Commerce Control List, or
Information or instruction is provided about software, technology, or equipment on the CCL, or
The foreign nationals are from or the travel is to an embargoed country
The contract has terms e.g. a publication restriction that effect the Fundamental Research Exemption
Equipment, software, chemical, bio-agent, or technology is on the US Munitions List (ITAR), or
Equipment, software, chemical, bio-agent or technology is designed or modified for military use, use in outer space, or there is reason to know it will be used for or in weapons of mass destruction, or
Chemicals, bio-agents or toxins on the Commerce Control List are involved, or
The contract contains a restriction on export or access by foreign nationals
Probably
(further review is required)
License May Be Required
YES
License Will Be Required NO 29

30. When to Consider Obtaining an Export License:
Exporting controlled h/w, s/w or technology?
 Yes
No Exemption or Exclusion applies?
“See through rule” applies? (ITAR)
Foreign Collaboration? Outside FRE?
Denied Party or Sanctioned Country involved?
STOP!
License May be Required!

31. Managing export controlled research
Assuming you can’t negotiate out the restrictive clauses - how do you manage the export controlled project?

32. Determining the need for a license
If no exceptions or exemptions, determine what kind of license is needed -
EAR
ITAR
OFAC 32

33. What next?! Get a license and/or Set up a Technology Control Plan
Next steps:
Get a license and/or
Set up a Technology Control Plan
Train the project personnel
Audit the Plan
Keep records

34. License or Technology Control Plan?
In some situations it is possible to put a TCP in place instead of applying for a license
A TCP is simply a plan that outlines the procedures to secure controlled technology (e.g., technical information, data, materials, software, or hardware) from use and observation by unlicensed non-U.S. citizens
If this is not possible, then a license or technical assistance agreement would be needed

35. When do you need a TCP?
In conjunction with a Technical Assistance Agreement (TAA) – Dept. of State
In conjunction with a Deemed Export license – Dept. of Commerce
In conjunction with an agreement that does not allow foreign nationals
In conjunction with an agreement that involves controlled technology – includes NDAs
Or in conjunction with any project that involves controlled technology!

36. How to keep your faculty out of trouble!
Travel Abroad
How to keep your faculty out of trouble!

37. How do the export regulations affect travel abroad for university employees?
Commerce and State have regulations that affect:
Physically taking items with you on a trip such as
Laptops, smart phones, PDAs
Encryption products on your laptop
Data/technology
Blueprints, drawings, schematics
Information/data presented at meetings or conferences
Equipment, data, presentations should be vetted for export control issues prior to travel

38. How do the export regulations affect travel abroad for university employees?
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:
Balkans, Belarus, Burma, Cote d’Ivoire, Cuba, Democratic Republic of the Congo, Iran, Iraq, Former Liberian Regime of Charles Taylor, Lebanon, Libya, North Korea, Sudan, Syria, and Zimbabwe
Doing business with certain people or entities
Commerce, State, and OFAC have “lists”

39. What does this mean? The bad news….
A license could be required depending on what you are taking and the country you are traveling to
A technical assistance agreement would be required if you were providing a “defense service” to a foreign person
There are consequences if you violate the regulations!

40. What does this mean? The good news…
Travel to most countries does not usually constitute an export control problem!
Taking a laptop with only Microsoft Office Suite, Internet Explorer, Adobe, etc. okay to most countries – no license required
In most cases, if you are taking or need to work with export controlled info or equipment abroad, a “License Exception” is available!

41. Department of Commerce Exception - (TMP) What does it cover?
Temporary “export” of items such as:
Laptops with controlled technology and/or data
Digital storage devices with controlled technology and/or data
Most software
Designs, drawings that are export controlled
Other “tools of the trade”

42. Department of Commerce Exception - (TMP) What is not covered?
The exception does not apply to:
Satellite or space-related equipment, components, or software
Exports related to nuclear activities except for a limited number of countries
Technology associated with high-level encryption
Iran, Syria, Libya, Cuba, North Korea, or Sudan
Another exception, “BAG” can be used for Syria, Cuba, N. Korea
Can’t take University property to these countries without a license
Anything regulated by the Department of State’s International Traffic in Arms Regulations (ITAR)

43. Recordkeeping Requirements
State and Commerce require documentation of exceptions and exemptions
Paperwork must be in place before you travel
Records must be kept for five years
PI/employee should keep a copy
Copy for Export Control Officer’s file
Copy for PI’s award file (if applicable)

44. Tips on Staying Compliant
Final Thoughts

45. Develop an Export Compliance Management Plan within your unit
Risk Assessment
Stop the Bleeding in Potentially High Risk Areas
Shipping
Procurement
Sponsored Research projects
Develop “best practices”
Technology Control Plans
Checklists to review for export issues
Recordkeeping
Required to keep records for five years

46. Tips on How to keep your Faculty Out of Trouble
Before adding a foreign national to a project, did you check to see if there are export control issues?
A license could be required and must be in place prior to work on the project
Acceptance of Export Controlled information – Know your responsibility:
Is the controlled research protected? TCP and/or license must be in place before work begins
Understand the conditions and restrictions of agreements
Did you just agree to export an instrument to China that requires a license? Did you allocate enough $$ for the duties and fees?

47. More Tips…. Travel Abroad faculty briefings advisable No Side-deals
Exports of export controlled hardware, technology or software require export compliance review (includes presentations) PRIOR to travel
No Side-deals
Make sure all agreed upon terms are included in the agreement
Export Recordkeeping Requirements –
keep for at least 5 years from date of export or expiration of the license whichever occurs last

48. Where to get more information
- UA Vice President for Research Export Controls Webpage
- Commerce - Bureau of Industry & Security - EAR
- State - Directorate of Defense Trade Controls - ITAR
- Office of Foreign Assets Controls
- Customs and Border Protection
For more information on the UA export compliance organization including contact information and to access our processes and tools, please visit the UA export webpage at
For more information about the regulations, please visit any of the websites listed on this slide.
Thank you for taking the time to complete this briefing. We hope it has been informative.