1. Michigan Technological University Presented by: Ramona Englund, FSO 906-487-2654 rlenglun@mtu.edu 1

2. Authority, Agencies & Jurisdictions Army Export Control Act (AECA) Department of State (ITAR) Directorate of Defense Trade Controls (DDTC) Department of Commerce (EAR) Bureau of Industry & Security (BIS) Authorizes the President to control the export/import of defense articles & services Licenses Defense Articles and Services Primary Licensing Agency for Dual-Use Exports Not Sure of the Licensing Jurisdiction? Request a Commodity Classification from BIS Department of the Treasury Office of Foreign Assets Control (OFAC) Administers Economic Sanctions (Embargoes) 2

3.  Under ITAR §120.17 – an export can occur in two ways:  ACTUAL shipment or transmission of items outside of the U.S.  DEEMED exports: Release or disclosure to a foreign national within or outside the U.S.  Exports are defense articles, defense services, and related technical data.  Military items are classified on the U. S. Munitions List (USML). This EXCLUDES the mere travel outside of the U.S. by a person with knowledge of controlled technical data. 3

4. What does the ITAR Regulate? The ITAR relates to controls regarding hardware, technical data and defense services relating to the items listed on the United States Munitions List (USML) – which is located in the ITAR – Part 121.  21 Major Categories – can be very general  Last Category – XXI - Miscellaneous – is a “Catch-All” These items are specifically designed and developed for a military application and can be manufactured, sold and exported to both military and civil end-users. The ITAR requires manufacturers of products that fall under the USML to register as manufacturers with the State Dept. and develop a Compliance Program. 4

5. Why do we have Export Controls?  National Security:  Terrorism & Weapons control  Protects U.S. defense technologies  Trade Protection:  Prevents proliferation of sensitive technologies  Supply shortages, crime control  Important Export Questions:  What is my item? (CCL or USML?)  Where is it going? (Embargoed Country?)  Who will receive it? (Foreign Person or Restricted end-user?)  How will the item be used? (Restricted end-use?) 5

6. Michigan Technological University has an obligation to: Advise all employees of the export and import laws and regulations by conducting training. Develop written procedures. Designate certain individuals as Empowered Officials to run this program. Obtain written authorizations to provide (export) data/hardware to foreign persons. Implement those authorizations in accordance with the approval and the various regulations. 6

7. 7 http://www.mtu.edu/research/administration/integrity-compliance/export-controls-foreign-nationals/export-control/

8. Exceptions for “Deemed” Exports  NO license required under ITAR or EAR for the deemed export of technology that:  Is already published or will be published;  Arises during or resulting from fundamental research;  Is educational; or  Is included in patent applications and communicated to foreign persons under certain conditions.  Information is published when generally accessible to the interested public in the “Public Domain”:  Published in any media (magazines, bookstores, newsstands, etc.);  Available in public or university libraries;  Published in patent or patent application;  Released at an “open” conference.  Look for approvals on the papers for Public Release  CAUTION! Do not treat everything on the internet as cleared for release in the Public Domain. 8

9.  Basic and applied research in science and engineering.  NOT proprietary research or industrial R & D.  NOT “Fundamental Research” if:  University or its researchers accept other restrictions.  Research is funded by the U.S. Government and specific controls protecting information resulting from the research are applicable. 9

10. “Educational Exception” No license is required for information released by instruction in catalog courses and associated teaching laboratories of academic institutions. If you teach it in an open-enrollment class with no registration restrictions, there is NO export license required. 10

11. High Risk Disciplines o Engineering o Space Sciences o Computer Science o Biomedical Research with Lasers o Research with encrypted software o Research with Controlled Chemicals, Biological Agents and Toxins 11

12. Foreign Person Any person who: - Is NOT a U.S. Citizen - Is NOT a Lawful Permanent Resident of the U.S. (e.g. “Green Card” Holder) - Is NOT a protected individual as defined by 8 U.S.C. 1324b(a)(3) (e.g. asylees) - Visa (L1, TN, H1B) = Foreign Person Includes foreign companies or other entities not incorporated to do business in the U.S., as well as international organizations and foreign governments. Need to Verify Every country of citizenship/residency/nationality = Dual and Multiple Nationalities Note – some countries revoke your citizenship when you take citizenship in a new country – however, DDTC still includes every country, from birth. 12

13. Transfer of U.S. technology by an intermediary person or institution, to a national of a third country. Can be “actual” or “deemed”. Example: The University transfers controlled technology to Country A, which employs an individual who is a national of Country B. BE AWARE: Include applicable restrictions in sub-licensing agreements involving articles / information subject to export controls. Must ensure the foreign party understands their obligations to notify you if they plan to resell, transfer, re-export technical data or hardware to another party. This requires approvals. 13 Re-export or Re-transfer:

14. Export Control Reform (ECR) August 2009, the President directed a broad-based review of the U.S. export control system with the goal of strengthening national security and the competitiveness of U.S. manufacturing and technology sectors. http://export.gov/ecr 14

15. U.S. Department of State, DDTC – ITAR: ww.pmddtc.state.govww.pmddtc.state.gov Nonproliferation sanctions list & debarred parties list U.S. Department of Commerce, Bureau of Industry and Security (BIS) – EAR: www.bis.doc.govwww.bis.doc.gov Denied persons list, entity list, unverified list & consolidated screening list Commerce Control List (CCL) U.S. Department of Treasury – OFAC: http://www.treas.gov/offices/enforcement/ofac/ Specially designated Nationals list 15

16. Red Flags Abnormal or suspicious circumstances Restrictions-funding or publication Export of materials is expected ‘Controlled Technology’ is noted in the contract Product’s capabilities do not fit with the buyer’s line of business Buyer is evasive when questioned about whether the parts are for domestic use or re-export. Company is less than 5 years old The buyer or their address is similar to one of the parties found on the US government’s list of denied persons A freight-forwarding firm is listed as the product’s final destination 16

17. Some MTU Examples US Citizens Only NSF Restriction Not Fundamental Research Repetition of Contract Terms Prior Approval for Foreign Nationals 17

18. All Sponsored projects received by MTU with national security restrictions on publication of results and/or participation by foreign nationals will be administered through Jay Meldrum at KRC. Export of items handled by Joanne Polzien in the University Compliance Office. 18

19. Fellowes are expected to be supported on any GK-12 award for a minimum of one year and a maximum of two years. Fellowes must be citizens or permanent residents of the U.S. Foreign students who hold student visas are not eligible. MTU will not accept projects unless both the Principal Investigator (PI) and unit manager(s) concur with this decision and agree to comply, and enforce compliance with all contract terms and conditions. 19

20.  MTU will not accept research funding supporting development of graduate student theses/dissertations when publication is prohibited or requires prior sponsor approval.  MTU will accept research funding when advance sponsor notification or limited-time (generally < 60 days) sponsor review prior to publication is required for review of intellectual property.  MTU may consider accepting national security publication restrictions when these are immaterial to the conduct of the project or the theses/dissertation of a student working on the project (i.e. testing or service projects).  MTU may consider accepting restrictions on participation by foreign nationals when these are immaterial to the conduct of the project; this determination will rely heavily on the recommendations of the PI and unit administrator(s). 20

21. Commerce Control List (CCL)  0 – Nuclear Materials  1 – Materials, chemicals, microorganisms & toxins  2 – Materials processing  3 – Electronics  4 – Computers  5 – Telecommunications & information security  6 – Lasers & sensors  7 – Navigation & avionics  8 – Marine  9 – Propulsion systems, space vehicles & related equipment There are 5 groups within each category: A. Equipment, assemblies & components B. Test, inspection & production equipment C. Materials D. Software E. Technology 21

22. Export of Items IF: The article or information is listed on the CCL or USML; or The University will train a foreign person in connection with the article/data/services; or Actual or deemed export occurs; AND: If NO exception is available under the applicable regulations; THEN: A license MUST be obtained before any actual or deemed export occurs; or NO EXPORT, and Foreign Nationals must be excluded. 22

23. Export Compliance 23

24. Export Licenses Required prior to providing foreign nationals access to controlled technologies or materials. Since 9/11/01, export controls are increasingly: Used as anti-terrorism tools Focused on universities and enforcement Focused on life sciences and biological materials 24

25. Technology Control Plan (TCP) Defines in general terms that we acknowledge restrictions and export control laws related to research activities Applies to: Classified Research ITAR Projects Controlled Unclassified Projects Company Confidential Information Non-disclosure Agreements Trade Secrets 25

26. Technology Control Plan (TCP) Employee signs to acknowledge they were briefed on the contract restrictions and laws. Employee signs again, indicating they will comply with the contract restrictions and the law. 26

27. Mitigates enforcement Do it “immediately” after violation is discovered! Complete review and report within 60 days Implement plan to prevent occurrences Corrective Actions Commitment to establish new procedures, conduct additional audits and provide/obtain additional training Submit full disclosure to DDTC Share details of violations during training sessions Voluntary Disclosure Program 27

28. Penalties for Non-Compliance Civil Interim Suspension – up to 60 days Administrative Debarment from Business with U.S. Government – usually for 3 years Company Fines – up to $500,000 per Violation Loss of export and import privileges Loss of right to do business with the U.S. Government Prime Contracts Subcontracts Criminal For Willful Violations Fines - up to $1,000,000 per Violation Up to 20 years imprisonment 28

29. Contact: Jay Meldrum 906-487-3178 jmeldrum@mtu.edu Joanne Polzien 906-487-2902 jpolzien@mtu.edu Ramona Englund 906-487-2654 rlenglun@mtu.edu 29

30. A Successful Compliance Program Consists of an Ongoing Training Program and Creates a Culture of Awareness 30