11/20/2007 Grants Development Office 1

Export/Import Controls & Compliance

Training for Faculty and Staff

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Areas of Discussion

Why is Export Control information important?Export Control Facts Governing Agencies Definitions Applicability of Export ControlsExclusionsCal Poly Policy

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Export control regulations are intended to:

• Prevent defense articles, services, or dual use commodities from harming the United States or its allies.

• Prevent controlled articles from being transmitted in any way outside the U.S. or within the U.S. to foreign person (s), or knowingly cause or permit any other person to do so unless: •The export or service is lawfully made and is covered by the

appropriate license, agreement, permit, exception, or exemption

•Appropriate documentation has been prepared, maintained, and/or submitted to the cognizant government agencies, as applicable, to permit the export, import, or service

•U.S. Government record-keeping requirements are satisfied

Why is Export Control information important?

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Export Control (Cont.)

The U.S. Government restricts the release of the following information to foreign nationals in the U.S. and abroad through export regulation and embargoes: • critical technologies, • technical data/software code, • equipment, • chemicals/biological materials, and • other materials, information and services

Penalties for violating export control regulations include fines, loss of export privileges, personal liability to staff, and potentially irreparable damage to Cal Poly’s reputation

Potential fines include up to $1M for the University, $1M for individuals, and up to 10 years in prison

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Trends

Increased focus on exports that can be used as terrorism tools

Increased focus on universities and on enforcementFBI College and University Security Effort “CAUSE”Program and Academic Alliancehttp://www.fbi.gov/page2/april06/academicalliance040506.htm

Increased focus on life sciences and biological materials.

Export Violations can be viewed at the BIS FOIA Web sitehttp://efoia.bis.doc.gov/ExportControlViolations/TOCExportViolations.htm

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•To comply with all export laws and regulations in the US, and each foreign country in which we operate, except where the law of a foreign country may be inconsistent with U.S. law

•Develop and disseminate training and compliance materials regarding Export Control to employees

•Ensure that all Export/Import records are maintained in accordance with U.S. government regulations

•Ensure all faculty, staff, and students understand their roles and responsibilities with regard to Export Control, including authorized agents, Export/Import Compliance License requirements (ECLPS), and shipping requirements

Cal Poly’s Requirements:

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Exports include the following:

•Shipment of a controlled item or good

•Transmission (including fax, digital or hand-carried) of controlled information related to a controlled item

•Release or disclosure (including verbal or visual) of any controlled technology, software or technical data either in the U.S. or abroad

•Use or application of controlled technology on behalf of, or for the benefit of, any foreign person or entity, either in U.S. or abroad

Export Control Facts

Specific definitions, regulations and exemptions depend on the governing agency for the exported item

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Export Control Facts (Cont.)

The Government also utilizes the term “Deemed Export” to describe export of technology or source code when released to a foreign national within the U.S.

•Release is making technology or software available to foreign nationals, either visually, orally or by practice or application, under guidance of persons with knowledge of the technology or software

•Includes “use technology” – information on the operation, installation, maintenance, repair, overhaul, and refurbishing of controlled equipment and access to proprietary manual.

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Exports can occur when you provide foreign persons “access” to technical information. For example, by hosting a visitor, hiring a consultant, through use of outside legal/translation services, giving a campus tour of your laboratory, releasing printed technical data, making presentations, through casual conversations, and sending emails, faxes, etc.

Export control obligations may exist if you provide data or commodities to a person or business and have reason to believe it will be passed on to a foreign country or person.

Export Control Facts (Cont.)

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Governing Agencies

Several government agencies are involved in the regulation of exports; however, the U.S. Department of Commerce and the U.S. Department of State regulate most of our exports

The Department of State•Implements the International Traffic in Arms Regulations, known as (ITAR)•ITAR regulates permanent and temporary Export/Import of defense articles, space related technologies, and the performance of defense services on the United States Munitions Listhttp://www.pmddtc.state.gov/itar_index.htm

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United States Munitions List (ITAR)Category I Firearms, Close Assault Weapons and Combat Shotguns Category II Materials, Chemicals, Microorganisms, and Toxins Category III Ammunition/Ordnance Category IV Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines Category V Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents Category VI Vessels of War and Special Naval Equipment. Category VII Tanks and Military Vehicles Category VIII Aircraft and Associated Equipment Category IX Military Training Equipment Category X Protective Personnel Equipment Category XI Military Electronics Category XII Fire Control, Range Finder, Optical and Guidance and Control Equipment Category XIII Auxiliary Military Equipment Category XIV Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment Category XV Spacecraft Systems and Associated Equipment Category XVI Nuclear Weapons, Design and Testing Related Items Category XVII Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated Category XVIII Directed Energy Weapons Category XX Submersible Vessels, Oceanographic and Associated Equipment

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Governing Agencies (Cont.)The Department of Commerce

•Implements the Export Administration Regulations, referred to as (EAR), •Regulates the export of commodities found on the Commerce Control List including dual use commodities (goods and services having both military and civilian uses)

These are items that are not inherently military in nature; theyare primarily commercial items with potential military use

Keep in mind time factor in determining requirements and then applying for and receiving licenses - could be as long as 90-120 days, depending on outside agency review

http://www.access.gpo.gov/bis/index.html

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How to Determine If You Need A LicenseLicense requirements are dependent upon:

What you are exporting (item’s characteristics)

Where you are exporting (destination)

Who will receive your item (s) (end-user)

What your item will be used for (end-use)

The GDO and SPO will assist in making this determination with the assistance of a consultant if required

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Commerce Control List (EAR)

0 Nuclear Materials, Facilities & Equipment & Misc.1 Materials, Chemicals, “Microorganisms”, and Toxins2 Materials Processing3 Electronics4 Computers5 Telecommunication & Information Security6 Sensors and Lasers7 Navigation and Avionics8 Marine9 Propulsion Systems, Space Vehicles & Related

Equipment

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The Department of the Treasury specifically administers both comprehensive and partial embargoes against various foreign countries. Office of Foreign Assets Control (OFAC) enforces economic and trade sanctions against specific countries and individuals Focus is on terrorists, narcotics traffickers, proliferation of weapons of mass destructionProhibited activities (examples): • Conducting surveys and interviews• Engaging services to develop informational materials • Engaging persons to support research activities• Providing marketing and business services

Governing Agencies (Continued)

http://www.treas.gov/offices/enforcement/ofac/

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In addition to the U.S. Department of Commerce and the U.S. Department of State, these U.S. governmental agencies are also involved in the regulation of exports:The U.S. Department of Homeland Securityadministers U.S. tariff and trade laws and enforces export/import laws and regulations. The U.S. Department of Justice enforces laws and regulations relating to alcohol, tobacco products, firearms, explosives, and arson.

Governing Agencies (Continued)

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• Export controls apply if the information/materials appear on either the International Traffic in Arms Regulations, known as ITAR Munitions List or the Export Administration Regulations, referred to as EAR, Commerce Control List.

• ITAR places strict controls on the export of “defense articles” and “defense services.” Defense articles include any item or technical data on the United States Munitions List (USML), and defense services include the furnishing of assistance to foreign persons, whether or not in the United States, with respect to defense articles, and the furnishing of any technical data associated with a defense article

• There are exclusions that cover work performed in academic institutions and a license is not required to disseminate information if an exclusion applies

When Do Export Controls Apply?

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Export Control Decision Tree For Sponsored Projects Export Control Decision Tree For Sponsored Projects

Project involves equipment, software,

chemicals, bio- agent or

technology which is on the US

Munitions List

(ITAR)

Project involves equipment,

software, chemicals, bio-agent or technology is classified as a defense article

designed or modified for military

use, use in outer space, or weapons

(ITAR)

Project involves

encryption software in source or

object code (EAR)

No No

Yes

Yes

Yes

See GDOfor Export Control Export Control

ReviewReviewIs foreign travel or

shipment of articles under the project

anticipated?

Project involves items on the

Commerce Control List (CCL) that are

dual in nature having commercial or

military application

(EAR)

Yes

Project meets criteria for

Research Exclusion and Not Subject to ExportNot Subject to Export

Controls

Sponsored Programs Office prepares required licenses upon award

Yes

No

Yes

Project involves a

country with imposed US

sanctions stipulated or travel to an embargoed country by

the US treasury (OFAC)

No

Key Web Siteshttp://www.pmddtc.state.gov/itar_index.htm (ITAR)

http://www.access.gpo.gov/bis/index.html (EAR)

http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml (OFAC)

Project involves equipment, software,

chemicals, bio- agent or

technology which is on the US

Munitions List

(ITAR)

Project results will be freely

published with no restrictions,

no NDA’s or Confidentiality

Agreements

No

Yes

GDO evaluates with faculty nature of Export, foreign

travel, license requirements, and any

restrictions

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Definitions

U.S. Person” is defined by ITAR 22 CFR §120.15 as:A person who is a lawful permanent resident or who

is a protected individual. It also means any corporation, business association, partnership, society, trust, or any other entity, organization, or group that is incorporated to do business in the United States. It also includes any governmental (federal, state, or local) entity. It does not include any foreign person as defined in section ITAR 120.16 below

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“Foreign Person” is defined by ITAR 22 CFR §120.16 as: Any natural person who is not a lawful permanent resident as defined by 8 USC. 1101(a)(20) or who is not a protected individual as defined by 8 USC. 1324b(a)(3). It also means any foreign corporation, business association, partnership, trust, society, or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments, and any agency or subdivision of foreign governments (e.g. diplomatic missions)

Definitions (Continued)

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“Technical Data” is defined by ITAR 22 CFR §120.10 as: Information, other than software as defined in ITAR 120.10(4), which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions, and documentation. This definition does not include information concerning general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities or information in the public domain as defined in 120.11. It also does not include basic marketing information on function or purpose or general system descriptions of defense articles.

Most of university teaching and research falls under one, or more, of several exemptions

Definitions (Continued)

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Classified information relating to defense articles and defense services Information covered by an invention secrecy order Software as defined in ITAR 121.8(f) directly related to defense articles

Examples of technical data include:

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Definitions (Continued)

Technical Data” defined by EAR 15 CFR §772: May take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals, and instructions written or recorded on other media or devices such as disk, tape, or read-only memories.

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An “Export” is defined in ITAR 22 CFR §120.17 as: Sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data Transferring registration, control, or ownership to a foreign person of any aircraft vessel, or satellite covered by the U.S. Munitions List, whether in the United States or abroad Disclosing (including oral or visual disclosure) or transferring in the United States any defense article to an embassy, any agency or subdivision of a foreign government (e.g., diplomatic missions) Disclosing (including oral or visual disclosure) or transferringtechnical data to a foreign person, whether in the United States or abroad Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad A launch vehicle or payload shall not, by reason of the launching of such vehicle, be considered an export. However, for certain limited purposes, controls may apply to any sale, transfer, or proposal to sell or transfer defense articles or defense services

Definitions (Continued)

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“Export” is defined by EAR15 CFR §734.2(b) as: An actual shipment or transmission of items subject to the EAR out of the United States, or release of technology or software subject to the EAR to a foreign national in the United States, as described in paragraph (b)(2)(ii) of the EAR, and paragraph (b)(9) for exports of encryption source code and object code software subject to the EAR.

Definitions (Continued)

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Exclusions Applicable to Universities

• Fundamental Research• Public Domain• Educational Information• Employment

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Fundamental Research ExclusionIs defined in the EAR and ITAR as

Basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific communityUniversity research will not be considered fundamental research if:

(i) The University or its researchers accept restrictions on publication of scientific and technical information resulting from the project or activity, or (ii) The research is funded by the U.S. Government and specific access and dissemination controls apply.

Foreign nationals may participate in research projects involvingexport-controlled information on campus in the US only, provided foreign person is not restricted by OFACTransfer of export-controlled information including “Materials” or “Items” abroad, even to research collaborators, is still prohibited

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Exclusions (Continued)

Information that is in the Public Domain is not subject to export controls (ITAR) and (EAR) if already published through

(a) Libraries open to the public, including most University libraries(b) Unrestricted subscriptions; news-stands, or bookstores(c) Published patents(d) Conferences, meeting minutes seminars, trade shows, or exhibits

held in the US (ITAR) or anywhere (EAR) which are generally accessible to the public for a fee and without the hosts’ knowledge of or control of who visits or downloads software/information

Educational Exclusion from EAR and ITAR • Covers teaching to foreign nationals in the US or abroad general

science, math , and engineering commonly taught in schools and Universities in formal course and in teaching laboratories of academic institutions – including information related to controlled Material or items

• Does not cover controlled information conveyed outside the classroom or teaching lab of an academic institution

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Exclusions (Cont.)

Employment exclusion may apply to individuals who:(a) are full-time, bona fide university employees(b) have permanent addresses in the U.S. while employed(c) who are not nationals of embargoed or sanctioned

countries http://www.treas.gov/offices/enforcement/ofac/programs/And,(d) are advised in writing not to share controlled

information with other foreign personsSuch persons are not considered foreign nationals under the ITAR

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• All Cal Poly employees and students involved with a potential export must:

• Be aware of and comply with all policies, procedures, laws, and regulations concerning Cal Poly Export/Import activities

• Ensure that no controlled information or equipment is shipped outside the United States except with a license from the Department of State and utilizing an approved carrier (unless an exclusion applies, such as for a laptop computer used for fundamental research and under owner’s control at all times)

• Always determine nationality of all collaborators, who they work for, and where they are located, before engaging in any controlled activity

Policy

It is the responsibility of staff and faculty to ensure student compliance

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• Ensure NO shipments are made to a country subject to OFAC sanctions or embargoes

• Not take chances or make assumptions, but consult with the Grants Development Office before engaging in Export/Import activities

• Seek to protect the fundamental research exemption by negotiating the elimination of clauses that restrict

PublicationAccessParticipation in research, teaching, or disclosure of results

Policy (Continued)

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Question

Giving facility tours to students or employees of a foreign country may constitute an export. True or False?

True False

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Answer

Giving facility tours to students or employees of a foreign country may constitute an export. Have your specific situation reviewed by the Grants Development Office

True

False

Ensure tours do not contain access to areas that contain export controlled material or technologies

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QuestionOnce a license is obtained for exporting certain equipment, and all of the equipment on the license has been exported, there is no need to obtain additional licensing authority to export the same equipment in the future. True or False?

True

False

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AnswerEach situation must be reviewed by the department of state licensing authority even if you intend to export the same equipment in the future.

True

False

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QuestionYou teach a graduate course on solid-state lasers which is listed in our course catalog. Many of the students are foreign persons. You need to obtain a license before this information is disclosed to foreign students?

True

False

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AnswerRelease of information by instruction in catalog courses and course laboratories of academic institutions is not subject to EAR

True

False

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QuestionYou are traveling abroad to Germany as part of a Grant activity. Since it is not an embargoed country there are no restrictions on your travel.

True

False

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AnswerAll faculty, staff and students traveling abroad must ensure that no encrypted software exists on their laptop, PDA or cell phone and that these items are used as tools of the trade only.

True

False