ROSEMARY RUFFMARCH 7, 2012

Export Controls 101:A Refresher

WHAT ARE EXPORT CONTROLS?

US laws that regulate the transfer of items, technology, software, and services to foreign persons Export Administration Regulations (EAR, 15 CFR 730,

U.S. Department of Commerce) – The Commerce Control List, everyday items that may have both military and commercial uses

International Traffic in Arms Regulations (ITAR, 22 CFR 120-130, U.S. Department of State) – U.S. Munitions List, items that were designed specifically for military use whether or not they will be used for military purposes

EXCLUSIONS FROM CONTROLS

Education Information concerning general scientific, mathematical or

engineering principles commonly taught in colleges or universities. Applies only to information released during catalog-listed courses at UA (through lectures, course materials, or instruction in laboratories)

Fundamental Research Information arising during or resulting from basic and applied

research in science and engineering at an accredited U.S. institution of higher learning where the resulting information is ordinarily published and shared broadly in the scientific community

EXCLUSIONS FROM CONTROLS

Public Domain Information generally accessible to the public in any form,

including information: readily available at libraries open to the public or at university

libraries in patents and published patent applications available at any

patent office released at an open conference, meeting, seminar, trade show,

or other open gathering published in periodicals, books, print, electronic, or other media

available for general distribution (including websites that provide free uncontrolled access) or for distribution to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline, either free or at a price that does not exceed the cost of reproduction and distribution

ARE THERE CLUES?

Many contractual terms can affect our “fundamental research exemption” Restrictions on publications/information dissemination Ownership of intellectual property Restriction on employee participation Explicit incorporation of statutory controls Foreign sponsors International travel or collaboration

WHAT’S AN EXPORT?

Physical transfers of items outside the U.S.Electronic transfer (disks, RAM sticks, etc.)

of software or technical data outside the U.S.Release or disclosure of software or technical

data to any foreign person by e-mail, Internet, phone/fax, in-person (oral communication), or visual inspection

Application of controlled data outside the U.S.

WHAT’S A DEEMED EXPORT?

“Deemed Export” — A deemed export is when controlled technology is transferred and/or disclosed to a foreign person in the United States

WHAT IS A FOREIGN PERSON?

A U.S. Person is a person who is a U.S. citizen, a U.S. legal permanent resident (“green card” holder) or an asylee/refugee under Federal regulation.

A U.S. corporation, partnership, trust, society or other entity incorporated or organized to do business in the United States is also a U.S. Person.

Everyone else is a Foreign Person.

F-1, J-1, H-1B, O-1 visa holders are Foreign Persons!

CLUES TO CONTROL ISSUES

Award document contains restrictions on publications, e.g., require prior approval before publishing or presenting publicly

Award document contains restrictions on the project personnel, e.g., only U.S. citizens

There is a confidentiality agreement in placeProposal Routing Form (export control or

foreign sponsor)RSSP notifies you that the project is

controlled

ARE CONTROLS STRICT?

Absolutely!ITAR

Almost all ITAR activities require a license from the US Govt. prior to engaging in the controlled activity.

Even proposal information may be controlled.

EAR Items controlled by EAR are controlled by country of

origin of the foreign person(s)

WHAT ARE THOSE REGULATIONS AGAIN?

Export Administration Regulations (EAR, 15 CFR 730, U.S. Department of Commerce)

International Traffic in Arms Regulations (ITAR, 22 CFR 120-130, U.S. Department of State)

WHAT IS A MUNITIONS CATEGORY?

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, 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.Military Electronics XIV. Fire Control, Range Finder, Optical

and Guidance and Control Equipment

XV. Auxiliary Military Equipment XVI. Toxicological Agents and Equipment

and Radiological Equipment XVII.Spacecraft Systems and Associated

Equipment XVIII.Nuclear Weapons, Design and

Testing Related Items XIX. Classified Articles, Technical Data

and Defense Services Not Otherwise Enumerated

XX. Directed Energy Weapons XXI. [Reserved] XXII.Submersible Vessels, Oceanographic

and Associated Equipment XXIII.Miscellaneous Articles

WHAT IS AN ECCN?

Export Control Classification Number

Export Control Categories

0 = Nuclear materials, facilities and equipment (and miscellaneous items)1 = Materials, Chemicals, Microorganisms and Toxins2 = Materials Processing3 = Electronics4 = Computers5 = Telecommunications and Information Security6 = Sensors and Lasers7 = Navigation and Avionics8 = Marine9 = Propulsion Systems, Space Vehicles, and Related Equipment

Five Product GroupsA. Systems, Equipment and ComponentsB. Test, Inspection and Production EquipmentC. MaterialD. SoftwareE. Technology

Category 1, Product Group C1C351 Human and zoonotic pathogens andtoxins

MUST CONTROLLED ITEMS HAVE A LICENSE?

Not necessarily – CCL (EAR) is country dependent Consult the Country Chart and the ECCN

USML (ITAR) is not country dependentMost of what we do falls under exemptions —

Fundamental Research, Public Domain, or Educational Information

ARE THERE OTHER CONTROLS?

Treasury Department – Office of Foreign Assets Control Implements and oversees economic and trade sanctions

against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction

Certain countries and activities are “sanctioned” http://www.treas.gov/offices/enforcement/ofac/programs/

PENALTIES FOR ITAR NON-COMPLIANCE

Criminal Sanctions: Individual - A fine of up to $1,000,000 or up to ten

years in prison, or both, for each violation.

Civil Sanctions: Individual - A fine of up to $500,000 for each violation.

The university may be subject to additional financial penalties. Do not depend upon sovereign immunity protections for personal liability.

PENALTIES FOR ITAR NON-COMPLIANCE

Criminal Sanctions: Individual - A fine of up to $1,000,000 or up to ten

years in prison, or both, for each violation.

Civil Sanctions: Individual - A fine of up to $500,000 for each violation.

The university may be subject to additional financial penalties. Do not depend upon sovereign immunity protections for personal liability.

UA RESPONSIBLE PARTIES

InvestigatorsTechnicians/lab managers Secretarial/ClericalStudentsCustodians/Facilities WorkersOK – now that I have your attention… violation

of export controls is a personal, criminal liability.

Tier 1 RESPONSIBILITIES

Investigators – Assess all research activities, sponsored and unsponsored,

to identify and classify controlled technology Develop export control plan Document training to all laboratory staff and students Monitor access to all research facilities/

technology/information to ensure proper control Ensure that controlled technology is not released without

an export license Notify RSCP of all potential export violations within 24

hours of discovery

TIER 2 RESPONSIBILITIES

RSSP – review proposals and awards to assist investigators with identification and management of controlled activities

RSCP – assist investigators with identification/ classification controlled items/activities, apply for licenses, seek advisory opinions, provide training opportunities

Office of General Counsel – review classification of controlled activities — may refer to external counsel* if unable to definitively classify an item

* Investigator/Unit is responsible for all costs incurred for external opinion.

Tier 3 Responsibilities

Administrators can assist investigators as needed to ensure that appropriate controls are in place. Some examples:

Identify immigration status of all project personnel upon project inception

Do not process payroll assignments without checking export control status of project

Maintain security of research facilities and technology, e.g., don’t “unlock the lab door” or provide copies of proposals, reports, etc. without approval

Ask Procurement to request that suppliers provide ECCNs Assist with identification of foreign visitors and foreign

travel

PENALTIES FOR EAR NON-COMPLIANCE

Criminal Sanctions: "WILLFUL VIOLATIONS“

University - A fine of up to the greater of $1,000,000 or five times the value of the exports for each violation;

Individual - A fine of up to $250,000 or imprisonment for up to ten years, or both, for each violation.

"KNOWING VIOLATIONS" University - A fine of up to the greater of $50,000 or five

times the value of the exports for each violation; Individual - A fine of up to the greater of $50,000 or five

times the value of the exports or imprisonment for up to five years, or both, for each violation.

Visual Compliance from eCustoms

Identify and catalog controlled items, especially laboratory equipment

Keep track of foreign travel by UA faculty, staff and students

Keep track of foreign visitors

EQUIPMENT PURCHASES

Who will initiate records? Existing New

Who will update location, disposal, etc.?Can/should we integrate this with our current

AIMS system to eliminate duplicate data entry and records?

FOREIGN TRAVEL AND VISITORS

Who will initiate records?Who should be on the review chain?Approval or review?How will we handle visitors?