1. Fundamentals of Export Controls
David Giannantonio, J.D., M.S.
Assistant Director, Research Compliance Initiatives
Emory Office of Compliance
Emory University

2. What are Export Control Regulations?
5/6/2018
Office of Compliance
Emory University
What are Export Control Regulations?
A group of federal regulations designed to advance national security, foreign policy, and economic interests of the United States
What is regulated:
Monetary transactions,
Transfer of physical items, and
Transmission of technology and software
to foreign governments and persons

3. U.S. Department of State – Directorate of Defense Trade Controls
5/6/2018
Office of Compliance
Emory University
U.S. Department of State – Directorate of Defense Trade Controls
International Traffic in Arms Regulations (ITAR)
Items on United States Munitions List (“USML”)
Defense articles and technologies, e.g., missile, space, and laser technologies, chemical and biological agents and delivery systems, software
Controls based primarily on whether an article or service is deemed to be military in character
Includes technical services assistance, including design, engineering and use of defense articles that are controlled

4. U.S. Department of Commerce – Bureau of Industry and Security (“BIS”)
5/6/2018
Office of Compliance
Emory University
U.S. Department of Commerce – Bureau of Industry and Security (“BIS”)
Export Administration Regulations (“EAR”)
Items on the Commerce Control List (“CCL”)
Items that have both commercial and military or proliferation applications (i.e., “Dual Use” items)
Export Controls Classification Numbers (“ECCN”)
Responsible for issuance of licenses when required

5. Office of Foreign Assets Controls (OFAC)
5/6/2018
Office of Compliance
Emory University
Office of Foreign Assets Controls (OFAC)
OFAC regulations prohibit trade and financial transactions with
Embargoed foreign governments
Embargoed foreign organizations and companies, and
Foreign nationals who are on an OFAC “Specially Designated Nationals” list (“SDN” list)
Financial transactions with foreign governments, companies, and individuals should be screened against OFAC lists
Includes purchases of equipment, payment of honoraria, payments under sub-awards and contracts,
etc.

6. OFAC Country Sanctions Programs
5/6/2018
Office of Compliance
Emory University
OFAC Country Sanctions Programs
Balkans
Belarus
Burma
Cote d’Ivoire (Ivory Coast)
Congo
Cuba
Iran
Iraq
Lebanon
Liberia
Libya
North Korea
Somalia
Sudan
Syria
Yemen
Zimbabwe

7. Why do these regulations matter to us?
5/6/2018
Office of Compliance
Emory University
Why do these regulations matter to us?
Universities engage in a number of activities that can implicate export controls regulations, including:
Multi-national research collaborations
Payments to foreign nationals and entities
Hosting foreign nationals as visiting scholars and researchers
International shipment of research equipment and transmission of technological information
Foreign travel
Entering into contracts and subcontracts containing certain information dissemination restrictions

8. Office of Compliance Emory University
5/6/2018
Office of Compliance Emory University
Penalties
The Export Administration Regulations (EAR)
Criminal Sanctions:
Up to $1,000,000 and 20 years imprisonment per violation;
Civil Penalties:
Up to the greater of $250,000 per violation or twice the amount of the transaction that is the basis of the violation
Denial Orders:
Temporary Denial Orders are issued by the Assistant Secretary for Export Enforcement, denying any or (typically) all of the export privileges of a company or individual to prevent an imminent or on-going export control violation. These orders are issued ex parte for a renewable 180-day period and cut off not only the right to export from the United States, but also the right to receive or participate in exports from the United States

9. 5/6/2018
Office of Compliance
Emory University
What is an “Export”?
An export is a shipment or transmission of items outside of the United States
An export can also be a transmission of technology in the form of information or software outside the U.S.

10. Office of Compliance Emory University
5/6/2018
Office of Compliance Emory University
Deemed Exports
There is another type of export under this regulatory scheme that is very significant to higher education – this is known as the “Deemed Export”
A transfer or release of controlled information (i.e., technology or software in the form of source code) that is subject to the EAR or the ITAR, to a foreign national inside the United States
This is “deemed” to be an export to the home country of the foreign national

11. Technology and “Use Technology”
5/6/2018
Office of Compliance Emory University
Technology and “Use Technology”
Controlled technology is the technology necessary “for the ‘development’, ‘production’, or ‘use’ of controlled item
This can also include “Technical Data” such as models, formulae, engineering designs, or “Technical Assistance” such as training or instruction.
“Use” technology is defined in the EAR as the “[o]peration, installation (including on-site installation), maintenance (checking), repair, overhaul and refurbishing.”
BIS has stated that a “deemed export” occurs only when the foreign national receives technical information sufficient to engage in all six activities defined as “use technology” (i.e., not just information related to operation).

12. Exclusions from Exports and Deemed Exports of Technology and Software
5/6/2018
Office of Compliance Emory University
Exclusions from Exports and Deemed Exports of Technology and Software
Information is publicly available (734.7)
Generally accessible to the interested public
Found in periodicals, books, print, electronic and other media forms
Found in Libraries
Shared at open conferences
Educational Information (EAR 734.3(b)(3)(iii))
Released by instruction in catalog courses
Associated teaching laboratories of academic
institutions
Patent Information (EAR )
Public information available on patent application
Fundamental Research (EAR 734.8)
Very important exclusion for higher education

13. Fundamental Research Exclusion
5/6/2018
Office of Compliance Emory University
Fundamental Research Exclusion
Exclusion applies to technology or software that results from research in science, engineering, or mathematics, that are ordinarily published and shared broadly in the research community, and there is an intent to publish.
However:
The exclusion only applies to exports and deemed exports of technology and software
The exclusion is eviscerated by restrictions on publication (e.g., pre-approval requirement, unreasonable delay) and confidentiality obligations (either self or externally imposed )pertaining to the technology
May be in a research-related grant/contract explicitly, or implicitly by reference as a “flow down” provision, so beware.
Exclusions to the deemed export rule do not apply to encryption technology, or non-fundamental research information acquired to conduct work that results in fundamental research

14. …So, how do we analyze this?
5/6/2018
Office of Compliance Emory University
…So, how do we analyze this?
What you need to know up front:
What are we sending or transmitting?
To whom are sending or transmitting (or doing business with)?
In or out of the U.S.
What is the end use?
What contracts/funding agreements are in play?
Do they contain confidentiality or publication restriction terms?