Export controls & Partners Healthcare Lisa Griffin, BWH Rachel Ackman, MGH September 29, 2015 Export controls & Partners Healthcare

Agenda What is an export? Regulations that restrict exports Identifying when restrictions apply Help from contracting language

What is an Export? Any shipment or transmission of items, information, or technology outside of the United States. This includes items that are shipped, carried over the border during travel, sent via electronic means, or shared in the course of spoken or written communication abroad. Sending money and other financial support outside of the US can also be an export Sharing information with foreign nationals in the United States is “deemed” to be exported to the foreign nationals country of origin.

Export Restrictions Export Administration Regulations (EAR) Enforced by the Department of Commerce Target items of US origin that could have a civilian and military use. International Traffic in Arms Regulations (ITAR) and US Munitions List Enforced by the State Department Targets items with a direct military application Trade Sanctions and Embargoes Enforced by the Department of Treasury, Office of Foreign Asset Controls Target financial transactions but can be broad enough to restrict any dealings with specific individuals or companied.

Export Administration Regulations Restricts exports and “deemed” exports of dual use items, information, or technology Specific items, information, and technology subject to these regulations are found on the commerce control list (CCL) and are classified as: 1 - Materials, Chemical, 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 - Aerospace and Propulsion 9 - Nuclear and Miscellaneous Inclusion on the CCL does not necessarily mean restrictions will apply, restrictions are also based on the export’s destination and the expected end user. For example, smart phones are listed on the CCL but you can bring them to most countries without restriction.

International Traffic in Arms Regulations Restrict the export of items and technology that have a direct military application: Munitions - Goods and technology designed to cause or increase human casualities or defend against biological or chemical attacks in a military setting Includes technical data related to defense services (furnishing assistance including design and use of defense articles) Designed to protect national security and take precedence over other export regulations Items and technology restricted under ITAR generally require a State Department license to export

Sanctions and Embargoes Export restrictions that further a US foreign policy objective Sanctions and Embargoes typically target finance and trade but can include travel and services. Broad sanctions can limit all dealings with a specific country, government, or specific foreign nationals. Countries currently subject to US Sanctions are listed below: Balkans, Belarus, Burma, Central African Republic, Cote d’Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Lebanon, Libya, North Korea, Somalia, Sudan, South Sudan, Syria, Ukraine/Russia, Yemen, Zimbabwe

Licensing When export restrictions do apply, it is possible to obtain a license to engage in the activity from the agency enforcing the export regulations. OFAC – US Treasury: obtaining an OFAC license is usually free but can take many months. The licenses typically last for 1 year and permit activities needed to carry out the licensed transaction. Commerce Department – Licensing for exports restricted under the EAR can be expensive. They typically apply to a specific commodity and changes may require a new license. The Commerce Department will provide a free classification under the CCL which can be used to determine if a license is necessary. State Department – Exporting an article under the ITAR requires registering as an exporter with the State Department and obtaining the appropriate license. These can be expensive and difficult to obtain. License applications should be submitted through the Research Compliance Office.

License Exceptions Fundamental Research Tools of the Trade Excludes information that will be or that can be shared publically by publication or presentation from certain licensing requirements. Does not apply to the export of items, only information. Contract clauses that limit the free publication of research results can defeat this exception. Tools of the Trade Allows US persons to export certain controlled items for use by that US person in the normal course of professional activity. Such use must be accepted for individuals in that profession. Requires additional record keeping that may be required at customs. Humanitarian Exceptions – several export control regulatory schemes include exceptions for humanitarian aid including food and medical supplies which are donated to areas in need.

We need your help Embargoed countries Contract language Red Flags Flag transactions and notify entity Research Compliance Office Contract language Ensure language requiring vendor compliance with export controls appears in contracts If you get pushback, notify entity Research Compliance Office Red Flags If you have any concerns about a transaction, notify entity Research Compliance Office

We need your help Pre Award Post Award Contract/subcontract Finance Embargoed countries Letter/Statement of Intent Re-export Post Award Financial terms Scope of Work Contract/subcontract Governing law, specific export control references Publication Finance Invoicing Payments

Determining if Export Restrictions Apply Who – who will be receiving the export, a person, an institution? Will they export it to someone else? What – what will be exported? Is it on the Commerce Control or Munitions Lists? Where – where is the final destination of the export? Will it be sent to an embargoed country? Is it in a restrictive country group under the EAR? Why – what is the reason for exporting the item or information? What will the recipient do with the export? When – is this a temporary export, such as a piece of equipment brought on a trip, or will the item stay in the foreign country permanently?

Addressing Exports Contractually Include standard language which clearly outlines responsibilities for compliance with export control regulations including obtaining necessary licenses. Where there is concern that export control regulations will be triggered due to the objective of the contract or the involvement of an embargoed country include a plan for compliance with the regulations. Be careful of language which limits the free dissemination of research results, as this may impact that availability of the Fundamental Research Exemption.

Standard Contract Language The Parties agree that the export of any items, including but not limited to goods, materials, equipment, information and data, from the United States may require approval from the U.S. Government in accordance with all applicable export control laws and regulations. The Business certifies that it will not export or re-export any items in the course of its activities, or engage in any transactions, under this Agreement without first determining whether the activity requires approval from the U.S. Government, including the U.S. Department of Commerce, the U.S. Department of State, the U.S. Department of Treasury, and any other authority responsible for such matters. Further, the Business shall not engage in any transactions with persons or entities listed as specially designated nationals and/or blocked persons by the U.S. Treasury Department's Office of Foreign Assets Control, unless the need for a license or approval has been determined and such license or approval has been obtained. If federal approval or license is required for any of the Business’s activities contemplated under this Agreement, the Business shall be solely responsible for determining the need for and obtaining such approval or license. The Business certifies that it is solely responsible for any and all import certificates, fees, taxes, and any other applicable requirements, when importing an item into the U.S. or any other country in the course of its activities under this Agreement.

Entity Research Compliance and Export Controls Contacts BWH: Lisa Griffin (617) 525-8833 | lgriffin11@partners.org MGH: Rachel R. Ackman (617) 643-9721 rackman@partners.org McLean: Jen Mahoney 617-855-2598 | jmahoney12@partners.org Spaulding: Alisia Minasian 617-952-5336 | aminasian@partners.org