INSTITUTIONAL COMPLIANCE WITH EXPORT CONTROL LAWS

1. INSTITUTIONAL COMPLIANCE WITH EXPORT CONTROL LAWS Andrew Karberg Director of Institutional Compliance akarberg@umassd.edu (508) 910-9880

2. Overview • Purpose of Export Controls • Definitions and Regulations • Applicability of Export Controls • High-Risk Disciplines • Exclusions & Exceptions • Export Control Compliance at UMD

3. University Mission & Export Controls • It is the mission and policy of UMD to conduct instruction & research openly and without prohibitions on the dissemination of learning or research activities.

4. Purpose of Export Controls • US laws that regulate the distribution of strategic technology, services and information to restricted persons and foreign countries for foreign policy and national security reasons. • Prevent terrorism. • Restrict access of certain goods and technology for military and economic purposes. • Export control laws apply to all activities – not just sponsored research projects.

5. BEHIND BARS A federal jury found University of Tennessee professor emeritus J. Reece Roth guilty of 18 charges involving the Arms Export Control Act. Roth repeatedly allowed two foreign national graduate students access to information on a military project and took data about it to China in May 2006. On July 1, 2009 a federal judge ordered the retired University of Tennessee professor to serve four years behind bars for his handling of restricted defense technology secrets. On appeal Roth’s conviction was upheld. He is in federal prison.

6. Export Control Violations Subject to Severe Penalties Against Institutions and Individuals • Penalties for ITAR Violations: • Criminal (Entities): Up to $1M • Criminal (Individuals): Up to $1M / 10 years prison • Civil Fines: Up to $500K and Forfeitures • Penalties for EAR Violations: • Criminal (Entities): Up to $1M • Criminal (Individuals): Up to $1M / 20 years prison • Civil Fines: $250K

7. Severe Export Control Violation Penalties (cont.) • Penalties for OFAC violations: • Criminal (Entities): Up to $1M • Criminal (Individuals): Up to $1M / 20 years prison • Civil Fines: $250K per violation • Institution also subject to administrative penalties: • Termination of export privileges (EAR and ITAR); and/or • Suspension and/or debarment from government contracting (EAR and ITAR)

8. U.S. Export Controls Cover Any Item in U.S. Trade U.S.-Origin Items Wherever Located(Jurisdiction Follows the Item or Technology Worldwide) Excludes Technology in the Public Domain Exports of Most High-Technology and Military Items as well as Associated Technology Require U.S. Export Authorization (Either a License or an Applicable Exemption) OFAC – Treasury U.S. Export Controls and Trade SanctionsOverview

9. Export is broadly defined: • shipment of a controlled item or good; • transmission (electronic or digital) of a controlled item or information related to a controlled item; • transfer, release or disclosure (including oral, verbal, or visual) of any controlled item, technology, software or technical data, or service either in U.S. or abroad; • use or application of controlled technology on behalf of, or for the benefit of, any restricted person or entity, either in U.S. or abroad.

10. U.S. export controls cover transfers of goods and technology overseas (inherently intuitive) But controls also apply to transfers within the U.S. (the transfer outside the U.S. is deemed to apply when a foreign national receives the information in the U.S.) Applies to technology transfers under the EAR and the provision of ITAR technical data and defense services Unless the fundamental research exemption applies, a university’s transfer of controlled technology to a foreign national in the U.S. may be controlled and/or prohibited Visa status important Permanent resident (“green card holder”) has same right to controlled information as U.S. citizen (no license required) Non-immigrant visa holders must satisfy export controls (license may be required) U.S. Export Controls and Trade Sanctions“Deemed” Exports

11. Export-Controlled Items & Jurisdiction State Department – International Traffic in Arms Regulations (ITAR) • Applies to items, articles, services, and data inherently military in nature. • Items listed on United States Munitions List (USML) – 21 categories. • Includes most space-related technology & research. Commerce Department – Export Administration Regulations (EAR) • Applies to Dual-Use goods, technologies, chemicals, biological agents, and software. • Items listed on the Commerce Control List (CCL) – 10 categories & catch-all. Treasury - Office of Foreign Assets Control (OFAC) • Trade sanctions, embargoes, restrictions on certain end-users, terrorism, anti-narcotics. Others: Nuclear Regulatory Commission; Department of Defense; Department of Homeland Security; Department of Justice.

12. Categories – ITAR (military) • 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 and Energetic Materials, 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

13. Categories – ITAR (military) • XI- Military Electronics • XII- Fire Control, Range Finder, Optical and Guidance and Control Equipment • XIII- Auxiliary Military Equipment • XIV-Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment • XV- Spacecraft Systems and Associated Equipment • XVI- Nuclear Weapons, Design and Testing Related Items • XVII- Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated • XVIII-Directed Energy Weapons • XIX- Reserved • XX- Submersible Vessels, Oceanographic and Associated Equipment • XXI- Miscellaneous Articles

14. Categories – EAR (Dual Use) • 0-Nuclear Materials, Facilities & Equipment (and Miscellaneous Items) • 1-Materials, Chemicals, Microorganisms, and Toxins • 2-Materials Processing • 3-Electronics Design, Development and Production • 4-Computers • 5-Telecommunications and Information Security • 6-Sensors and Lasers • 7-Navigation and Avionics • 8-Marine • 9-Propulsion Systems, Space Vehicles and Related Equipment

15. Sanctions & Embargoes • Focus on end-user or country rather than technology • OFAC administers (Treasury Dept.) • Sanctions on trade with Cuba, Iran, N. Korea, Sudan, Syria; • Limitations on trade with other countries or with certain actors. • OFAC prohibits payments to nationals, sanctioned countries, and to terrorist-supporting entities. • Separate prohibitions under the ITAR and EAR: • ITAR proscribed list/sanctions (e.g. Syria, Lebanon or requirement for presidential waiver for China); • EAR restricts exchanges with some entities and universities in India, Israel, Russia, etc. because of proliferation concerns.

16. High-Risk Disciplines • Engineering • Physics • Computer Science • Biomedical Research with Lasers • Research with Encrypted Software • Research with Controlled Chemicals, Biological Agents, and Toxins • Marine Sciences

17. AT UMD: • Submersible Underwater Vehicles • Body Armor • Sonar • Bioacoustics • Defense Services • Telecommunications • Supercomputers • Select Agents & Toxins

18. Grants & Contracts Always start at: Basic and Fundamental Research Negotiate out restrictions Watch for personnel restrictions Publication / Dissemination restrictions Purchases / Transport / Disclosure of Export Controlled Item Deemed Exports & Graduate Students Visiting Scholars Export of research products “Deemed Exports” requirements for use of equipment Access to research, technologies, & data TRAVEL: Temporary transfer of controlled item abroad Carrying scientific equipment to certain destinations for research may require authorization (e.g., Iran, Cuba, Syria, etc.) Should know ECCN – EAR restrictions technology & country specific Application to University

19. Visiting Scholars Corporate and government grants may limit access by foreign nationals Proprietary restrictions or restrictions on publication by corporate grants may invalidate fundamental research Could trigger licensing requirements for certain foreign nationals Conferences Restrictions on participants, inability to co-sponsor with certain countries or groups (e.g., restrictions on co-sponsoring conference with Iranian government) Application to University

20. Planning & Coordination Export Authorities Expect All Involved (Including University Administration and PI’s) to Understand Export Control Requirements and Take Responsibility for Compliance Identify early – know players, high risk areas, & ask questions. Early Contacts to Compliance Officials When in doubt call and ask Actions of Individuals Can Bind University

21. ITAR Exemptions & EAR Exceptions • ITAR Exemptions • Public Domain • Technical Data • General Exemptions • EAR Exceptions • Public Domain • Fundamental Research • Government-Funded Research

22. NSDD-189 - Fundamental Research "'Fundamental research' means basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community. . . (NSDD-189) ..at accredited institutions of higher learning in the U.S. ..no restrictions on publication of research results ..no access or dissemination controls on the results of the research (normally seen as restrictions/approvals of foreign nationals working on the project)

23. Export Licenses • Required prior to exporting or providing restricted persons access to controlled technologies or materials. Export controls are increasingly: • Used as anti-terrorism tools • Focused on universities • Focused on life sciences and biological materials

24. What to Look For... • Any restrictions on publication, disclosure, dissemination, personnel, or participation by the sponsor. • Mention of “export control,” “ITAR,” “EAR,” “ECCN,” “Defense Service,” by the sponsor. • Physical exports. • Military or Dual Use Technologies. • Participation of Restricted Persons. • High Risk Disciplines. • Visiting Scholars. • Presentation/discussion of previously unpublished research at conferences or meetings where foreign national scholars may be in attendance • Research collaborations with foreign nationals and technical exchange programs • Transfers of research equipment abroad • Visits to your lab by foreign national scholars

25. UMD Export Controls:Records Retention • Retain export-control records for 5 years from the authorization’s expiration date or exemption date.

26. INSTITUTIONAL COMPLIANCE WITH EXPORT CONTROL LAWS Andrew Karberg Director of Institutional Compliance akarberg@umassd.edu (508) 910-9880