Export control training presentation

Export Control Laws
Training Presentation
The University of North Carolina
at Chapel Hill

1

Why must we be concerned with
Export Control Laws?
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



Certain export control laws may apply to
UNC research activities here and abroad.
Failure to comply may result in serious
criminal and civil penalties for both UNC
and individual researchers
Federal Government has increased
enforcement and investigations of
universities since 9/11/2001
2

What are Export Control Laws?
Export control laws (“ECL”) are
U.S. federal laws and regulations
that regulate the export of
strategically important products,
services and technologies to foreign
persons.
3

Who/What is a “Foreign Person”?


Any foreign government;



Any foreign corporation or organization that is not
incorporated or organized to do business in the U.S.;



Any individual who is not a U.S. citizen or lawful
permanent resident of the U.S. (green card holder)
4

What is an “Export”?


Transfer of controlled technology,
information, equipment, software or services
to a foreign person in the U.S. or abroad by
any means. For example:




actual shipment outside the US
visual inspection in or outside the US
written or oral disclosure
5

Recognize Potential Export Control
Issue. Seek Guidance.








Export control laws are not intuitively obvious.
All UNC researchers are ultimately responsible for
their own individual compliance.
At a minimum, researchers need to know how to
recognize that an export control issue may exist,
and then whom to contact at UNC for assistance.
This presentation is a summary designed to provide
sufficient information for researchers to be able to
spot export control issues.
Contact information for UNC export control experts
and links to online resources appears at the end of
this presentation.

6

What is the Intent of Export Control
Laws?







Restrict exports of goods and technology that could
contribute to the military potential of adversaries
Prevent proliferation of weapons of mass
destruction (nuclear, biological, chemical)
Prevent terrorism
Comply with U.S. trade agreements and trade
sanctions against other nations
7

What are the Export Control Laws and
their Federal Agencies?






State Department: International Traffic in Arms
Regulations (ITAR), which pertain to inherently
military technologies
Commerce Department: Export Administration
Regulations (EAR), which pertain to “dual use”
technologies (civilian or military use)
Treasury Department, Office of Foreign Assets
Control (OFAC): Prohibits certain transactions with
countries subject to boycotts, trade sanctions and
embargoes
8

International Traffic in Arms
Regulations (“ITAR”)






Covers controlled technologies of an inherently
military nature
Exporters of defense services or related technical
data are required to register with the federal
government and may need export licenses.
List of ITAR controlled technologies (“Munitions
Control List”) is available at this website
9

ITAR’s MCL includes equipment with
potential non-military applications


Example 1: Vaccines, antidotes and medical diagnostics
specifically designed to protect against or counter chemical
and biological warfare agents



Example 2: Powerful explosives, propellants and incendiary
agents (including, e.g., propellants having a force constant of
more than 1,200 kJ/Kg)



Example 3: Global Positioning System (GPS) that can
operate at speeds in excess of 515 m/sec (1,000 nautical
miles/hours) and at altitudes in excess of 18 km (60,000 feet)
or designed or modified for use with unmanned air vehicles
10

Technical Data regulated by ITAR


Technical Data -- information required for the design,
development, production, manufacturing, assembly,
operation, repair, testing, maintenance or modifications of
defense articles on the MCL -- are regulated by ITAR.



Examples of Technical Data:
 Blueprints, drawings, plans, instructions, diagrams,
photographs.



Technical Data Exclusion: “Technical Data” does not
include information concerning general scientific,
mathematical or engineering principles commonly taught at
universities or information in the public domain.

11

Export Administration Regulations
(“EAR”)


EAR covers equipment, materials and other
technologies with both commercial and
military applications, the so called “dual use”
technologies (e.g., chemicals, satellites,
software, computers, etc.)



EAR’s list of controlled technologies is called
the Commodity Control List (CCL) and is
available at this website
12

Office of Foreign Assets Control
("OFAC") Regulations




OFAC enforces economic and trade sanctions
against specific foreign countries, terrorists,
international narcotics traffickers, and those
engaged in weapons of mass destruction
proliferation.
Countries currently sanctioned are the
Balkans, Burma, Cuba, Iran, Iraq, Liberia,
Libya, North Korea, Sudan, Syria, and
Zimbabwe.
13

Sanctions Programs Enforced by
OFAC can be Highly Restrictive


Sanctions Programs may restrict:
 Payments (compensation, honoraria, contracts) to
embargoed countries/nationals/entities
 Attendance at/planning of international
conferences
 Surveys and services to embargoed
countries/nationals/entities
 Editing or joint authorship of articles with
nationals of sanctioned countries
14

OFAC Enforces Country-Specific
Sanctions Programs


Before traveling to a sanctioned country, or trading
with or providing services to persons in sanctioned
countries, individuals must first educate themselves
on the specific sanctions program for that country to
determine whether such transactions are permitted.



OFAC’s website contains up-to-date information on
each of the sanctions programs
 http://www.treas.gov/offices/enforcement/ofac/
15

Potential Impact of Export Control
Laws on UNC Research


If a UNC research project involves controlled
technologies, the researcher may be required to
obtain a government license before:
 Equipment, chemicals or technologies subject to
EAR or ITAR may be sent or taken outside the
U.S.
 Foreign researchers or students – even if located
in the U.S. on UNC’s campus – may participate
in research involving equipment, chemicals or
technologies subject to EAR or ITAR (known as
a “deemed export”)

16

General Rule:


General Rule: UNC faculty and employees may
not send or take export-controlled equipment,
chemicals or technologies to foreign persons
without a license from the U.S. Government, unless
an exclusion applies.



Fortunately, the majority of research at UNC will be
covered under an exclusion to the ECL
requirements.



What are the exclusions?
17

Exclusions from Export Control Laws
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
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

Public Domain Exclusion (ITAR, EAR)
Education Exclusion (ITAR, EAR)
Employment Exclusion (ITAR only)
Fundamental Research Exclusion (ITAR,
EAR)
18

Public Domain Exclusion




No license is required to export or transfer information and
research results that are generally available to the interested
public through:
 Libraries, bookstores, or newsstands,
 Trade shows, meetings, seminars in the U.S. open to the
public,
 Published in certain patent applications, or
 Websites accessible to the public.
Note: the public domain exclusion applies to information and
research results -- not physical equipment, substances, etc.
19

Education Exclusion


No license is required to transfer information to
students, including students who are foreign
nationals, concerning general scientific,
mathematical or engineering principles commonly
taught in school, colleges or universities.

20

Employment Exclusion


No license is required to share information subject to export
control laws with a foreign national if the foreign national:
 is a full-time, bona-fide employee of the University;
 is not a national of certain countries of concern;
 has a permanent address in the U.S. while employed at the
University; and
 has been informed in writing not to transfer the
information to other foreign nationals.

21

Fundamental Research Exclusion




No license is required for fundamental research,
defined as basic or applied research in science or
engineering
 at an accredited institution of higher learning in
the U.S.; and
 resulting information is ordinarily published and
shared broadly in the scientific community.
Fundamental research is to be distinguished from
research the results of which are restricted for
proprietary reasons.
22

The Fundamental Research Exclusion
Is Destroyed if:


The University accepts any contract clause in the
sponsored research contract that:


Gives the sponsor the right to withhold from
publication information resulting from the
research;



Forbids the participation of foreign nationals; or



Otherwise operates to restrict participation in
research and/or access to and disclosure of
research results.

23

University Policy is to Protect
Fundamental Research Exclusion


By refusing to accept research contract
provisions that:




limit the researcher’s right to publish or present
research results (a limited prepublication review
by sponsor is ok); or
limit access or participation in the research by
foreign nationals.
24

Export Control Case Study #1


A marine biologist, in connection with her research off the

coast of Madagascar, takes with her to Madagascar seafloor
navigation equipment for depths exceeding 1000 m and
positioning accuracy within 10 m of a given point.
 The “Public Domain” exclusion applies only to
information, not to equipment such as the seafloor
navigation equipment.
 The “Fundamental Research” exclusion does not apply
because the research is to be conducted abroad. The
seafloor navigation equipment with the specifications
listed is regulated under EAR’s CCL and there is no
license exception.
25



A computer scientist is working on encryption strategies with
a graduate student who is a Pakistan national and is not a
permanent resident of the United States.
 Some encryption technologies may not be in the public
domain and their development may not be considered
fundamental research under either EAR or ITAR.
 The graduate student may be able to qualify for ITAR’s
employment exclusion, but EAR has no corresponding
exclusion. Therefore, sharing the encryption technology
with the graduate student may constitute a “deemed
export” of that technology.
26



A plant biologist working on genetic control of plant
development receives funding from a corporate sponsor who
exercises substantive prepublication review. The biologist
sends samples of puccinia striiformis to colleagues in Canada
for analysis.
 The “public domain” exclusion applies only to
information, not to physical objects such as the samples.
 The “fundamental research” exemption does not apply
because of the sponsor’s substantive prepublication
review. Puccinia striiformis, along with several other
plant pathogens, is listed on the EAR CCL, and there is
no applicable license exception.
27

Applying for and Obtaining an Export
Control License
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



The process of determining if a license is
required takes time.
After applying for a license, it can take several
months to obtain a license from the Commerce
or State Department.
Contact UNC’s EHS Dep’t with as much lead
time as possible for help.
28

Laptop Baggage Exception for
Temporary Export


Faculty and students who need to take their laptops
out of the country in connection with university
fundamental research may do so under the baggage
exception for temporary export so long as:
 the country of travel is not under U.S. sanctions;
 the laptop is a "tool of trade“; and
 the laptop remains in their possession and control
at all times.
29

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 (Individuals): Up to $250K / 10 years prison
 Civil Fines: $10K - $100K
30

Severe Export Control Violation
Penalties (cont.)
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Penalties for OFAC violations:
 Criminal (Individuals): Up to $1M / 10 years prison
 Civil Fines: $12K - $55K 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)
31

University Contacts for Export
Control Questions and Assistance:
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Deb Howard, EHS Industrial Hygienist
 email: dmhoward@email.unc.edu
 phone: 962-5722
Jim Peterson, Dir. Sponsored Research, Assoc. VC Research
 email: jim_peterson@unc.edu
 phone: 966-2542
Will Tricomi, Assistant University Counsel
 email: will_tricomi@unc.edu
 phone: 843-5329
Additional UNC Export Control Information located at:
http://research.unc.edu/osr/policies/export_control.php
32

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