Export Controls and International Research Collaborations

1. 1 Export Controls and International Research Collaborations Phillip E. Myers (Moderator), Director, OSP, Western Kentucky University John Childress, Director, Division of Sponsored Research, Vanderbilt University Julie T. Norris, Director Emeritus, OSP, Massachusetts Institute of Technology Phil Kuhn, U. S. Department of Commerce

2. 2 Moderator�s Introduction Export controls are among the top challenges facing research administrators and PI�s today. Institutions must have policies and procedures to collaborate with foreign countries. We will give you the information you need to delve into collaborations. Institutions must have RA�s responsible for export controls. This session will explain how to be responsible in this area. Once responsible, RA�s must educate PI�s and senior administrators in this vital piece of RCR. After the break, please attend the Discussion Group at 3:30.

3. 3 Purposes of Export Control Laws John T. Childress Vanderbilt University

4. 4 Purposes of Export Control Laws  Restrict export of goods and technology with military potential Prevent proliferation of WMD Advance U. S. foreign policy goals Protect economy and promote trade LAWS OF THE LAND! Substantial criminal and civil penalties for violators

5. 5 Why now?? Civil War Era � �trading with the enemy laws� Laws crafted for industry Modern laws date to the 1940s � Why all the fuss, now? Cultural & economic evolution, Apocalyptic potential of certain technologies, and September 11, 2001

6. 6 Breadth of Impact International Students Visiting Faculty � foreign nationals U.S. Faculty and Staff Payroll Procurement Disbursement International Travel Sponsored Research � Medical and Non-Medical Technology Transfer Material Transfer Agreements Non-disclosure Agreements

7. 7 The EC Regulatory �Catalog� Export Administration Regulations (EAR) � Department of Commerce Bureau of Industry and Security Patent and Trademark Office (PTO) Commerce Control List (CCL) 47 pages Technologies controlled to specific countries International Traffic in Arms Regulations (ITAR) � Department of State Directorate of Defense Trade Controls U.S. Munitions List More narrow focus Part of the list is classified ITAR PROHIBITED COUNTRIES- Afghanistan, Belarus, Cuba, Iran, Iraq, Libya, N. Korea, Syria, Vietnam, Myanmar (formerly Burma), China, Haiti, Liberia, Rwanda, Somalia, Sudan, Venezuela, or Democratic Republic of the Congo (formerly Zaire), any UN Security Council arms embargoed country (e.g., for certain exports to Rwanda).

8. 8 The EC Regulatory Catalog Office of Foreign Assets Control [sanctions & embargoes] (OFAC) � Department of the Treasury Specific Country Sanctions Accomplished through Presidential Executive Order Country/Region Sanctions Program Excluded Parties List System � http://www.epls.gov/

9. 9 EC Basics What is an �export�? Any oral, written, electronic, or visual disclosure, shipment, transfer or transmission of any commodity, technology (information, technical data, assistance) or software code Outside the U.S. to anyone, including U.S. citizens, To a non-U.S. entity or individual, wherever located

10. 10 EC Basics Types of Exports Physical objects Software code Technical data Chemicals/Toxins Biologicals Word of mouth U.S. citizens => foreign person Foreign person from export restricted country

11. 11 EC Basics �Non-U.S. Entity� or �Foreign Person� Foreign person means any person who is not a lawful permanent resident of the United States Foreign corporations, business associations, partnerships, trusts, societies, etc.

12. 12 EAR: �dual-use� technology "dual-use" - items that have both commercial and military applications or proliferation potential but purely commercial items without an obvious military use are also subject to the EAR.

13. 13 �deemed� exports An export of technology or source code (except encryption source code) is "deemed" to take place when a foreign national gains access to the technology/source code while in the United States.

14. 14 Managing Deemed Exports Schools, labs and PIs are responsible for compliance Interplay of � NDA agreements Software licenses containing restrictions & used for teaching Materials Transfer Agreements Sponsored Research Technology Transfer Licenses

15. 15 Defense Service Defense service [ITAR] means: The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; (2) The furnishing to foreign persons of any technical data controlled under this subchapter whether in the United States or abroad; . . .

16. 16 Technical Data Technical data means: (1) Information, . . . 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. (2) Classified information relating to defense articles and defense services; (3) Information covered by an invention secrecy order; (4) Software . . . . directly related to defense articles; (5) 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 . . .

17. 17 Applicability to the Academycont�d FRE applies only to activities conducted in the U. S. Corporate contracts Federal flow-through funding Federal Acquisition Regulations (FAR) Clauses Corporate funds Covered topic

18. 18 DIFFERENCES BETWEEN ITAR AND EAR Julie T. Norris Massachusetts Institute of Technology

19. 19 AGENCY RESPONSIBILITIES State Department: �Munitions� (the International Traffic in Arms Regulations, ITAR) Licensing: Department of Defense Trade Controls (DDTC) Commerce Department: �Dual-Use� Items (the Export Administration Regulations, EAR) Licensing: Bureau of Industry and Security (BIS) Treasury Department: Office of Foreign Assets Control (OFAC)

20. 20 ITAR Covers military items (�munitions� or �defense articles�), including goods and technology designed to kill people or defend against death in a military setting Includes most space-related technology because of missile technology application Includes technical data related to defense articles and services (furnishing assistance including design and use of defense articles) Purpose is to ensure U.S. security � no balancing of commercial or research objectives

21. 21 EAR Covers dual-use items (items designed for commercial purposes but that can have military applications (computers, pathogens, etc) Covers both the goods and the technology Balances foreign availability, commercial and research objectives with national security

22. 22 OFAC Trade sanctions and trade and travel embargoes aimed at controlling terrorism, drug trafficking and other illicit activities May prohibit travel and/or other activities with embargoed countries and individuals even when exclusions to EAR/ITAR apply

23. 23 FOCUS ON COUNTRY AND/OR END USER OFAC prohibited countries ITAR countries �where the presumption is one will not get a license� EAR restricted countries/entities because of proliferation concerns Note: the inherent capabilities and design, not the intent of the creator or end user, determines whether the items falls under EAR or ITAR

24. 24 OFAC SANCTIONED COUNTRIES Balkans (5/22/20 Belarus (2/27/2007) Burma (6/26/2007) Ivory Coast (9/19/2006) Cuba (5/23/2007) Congo (3/30/2007) Iran (6/14/2007) Iraq (7/18/2007) Liberian Regime of Charles Taylor (5/23/2007) North Korea (2/02/2007) Sudan (6/14/2007) Syria (8/15/2006) Zimbabwe (5/22/2006)

25. 25 ITAR SANCTIONED COUNTRIES (Defense Articles and Services) Belarus Cuba Iran North Korea Syria Venezuela (Arms Embargo) Burma China Liberia Somalia Sudan

26. 26 EAR NONPROLIFERATION SANCTIONED COUNTRIES See 15 CFR 744.19

27. 27 DIFFERENCES IN EASE OF USE OF THE ITAR AND THE EAR EAR 10 categories: nuclear items and miscellaneous; materials, chemicals, toxins and microorganisms; materials processing; electronics; computers; telecommunications and information security; sensors and lasers; navigation and avionics; marine; propulsion systems, space vehicles, and related equipment. Reasons for control: anti-terrorism (AT); chemical and biological weapons (CB); chemical weapons conventions (CW); encryption item (EI); missile technology (MT); nuclear nonproliferation (NP); national security (NS); computers (XP). Assignment of ECCN number; reasons for control vary with country EAR 99 items: items subject to EAR but not on CCL Q&A Outreach efforts

28. 28 DIFFERENCES IN EASE OF USE OF THE ITAR AND THE EAR ITAR XXI categories (category XIX reserved) Answers depend of individual circumstances No Q&A

29. 29 THE ISSUE OF PUBLISHING - ITAR Covers information �which is published and which is generally accessible or available to the public� Excludes information restricted for proprietary reasons or specific U.S. government access and dissemination controls

30. 30 THE ISSUE OF PUBLISHING - EAR Covers information �which is ordinarily publishable and shared broadly within the scientific community� May cover information where there are access or dissemination controls provided that university follows national security controls in grant proposal Advanced encryption technologies ineligible for FRE

31. 31 THE ISSUE OF DEEMED EXPORTS U.S. export controls cover the transfers of goods and technology within U.S. (a deemed export) Applies to transfers of items or related technology (information necessary for the development, production, or use of an item) under EAR Applies to defense articles, technical data, and defense services under the ITAR Defense article is anything on the Munitions List Technical data is information pertaining to defense articles Defense service is provision of information about how to use defense articles

32. 32 LICENSING REQUIREMENTS AND FORMS For State: http://www.pmdtc.org* For Commerce: http://www.bis.doc.gov For Treasury: http://www.ustreas.gov/offices/enforcement/ofac/ *Registration with DDTC a prerequisite to licensing except that there is no registration required for entitles that - engage only in the fabrication of articles - �for experimental or scientific purposes� - �including research and development�

33. 33 LICENSING - EAR 748 P � license application plus applicable supporting forms 748 A (item appendix) 748 B (end user appendix) End user certificate Letter of explanation Technology control plan Passports/visas (if applicable) Resume(s)

34. 34 LICENSING - ITAR Forms DSP-5 (Permanent Export) DSP-73 (Temporary Export) DSP-61 (Temporary Import) DSP-85 (Classified Articles) Technology Control Plan Other Supporting Documents (equipment list, letter of explanation, letters of agreement, technology description, DSP-83 for military equipment, etc)

35. 35 LICENSING - OFAC Request license by letter describing purpose of travel, who is traveling, period of time, interactions with foreign government (if applicable), equipment and resources to be exported License period is generally one year or less, renewed annually

36. 36 PENALTIES ITAR Criminal: up to $1 M per violation; up to 10 years in prison Civil: seizure/forfeiture of articles, revocation of export privileges, fines up to $500 K per violation EAR Criminal: greater of $50K-$1 M or five times value of export; up to 10 years in prison Civil: loss of export privileges, fines $10K-$120K per violation OFAC Criminal: up to $1 M and 10 years in prison Civil: $12K-$55K per instance Bad press!!