A JOURNEY AROUND THE WORLD: EXPORT CONTROLS IN THE UNIVERSITY SETTING NURAP AT NOON, MARCH 2016 (CHICAGO CAMPUS) Presented by Lane Campbell, Director Office for Export Controls Compliance (OECC)

The Office for Export Controls Compliance (OECC) was established in November 2012 in response to an emerging trend of university’s dedicating additional resources to export compliance In the few years since OECC’s creation, we have seen virtually all of our colleague institutions create offices/resources dedicated to compliance OECC reports up through the Office for Research, and is responsible for overseeing export compliance issues for the University 2 OFFICE INTRODUCTION/ROLE

OECC has progressively developed its infrastructure since its inception (steps outlined in blog post: “Integrating Export Compliance Across Your University“)Integrating Export Compliance Across Your University Northwestern’s first Export Compliance Policy was approved in May 2014 Key compliance principles communicated through training and other University outreach Partner with central offices across the University to ensure a unified approach to export compliance Establish relationships with external partners/engage in the national dialogue 3 BUILDING THE OFFICE

Dating back to the early 2000s, post-9/11, export compliance offices began popping up at universities nationwide Over the last 5-6 years, this growth has expanded, leading to the first national association dedicated to export compliance at universities, AUECO (“Association of University Export Control Officers”), which was established in 2008 by a handful of compliance professionals and has since grown to nearly 150 members We’ve also seen strong growth reflected in other organizations, including NCURA, COGR, and NACUA, all of which dedicate resources and offer sessions on export compliance 4 THE EVOLUTION OF UNIVERSITY EXPORT COMPLIANCE

“Export controls” refer to any number of federal rules and regulations dealing with exports. The most notable regulations are: The Export Administration Regulations, first enacted in 1979, overseen by the Commerce Department The International Traffic in Arms Regulations, enacted in 1976, during the Cold War, overseen by the State Department The Office of Foreign Assets Control, established in 1950, overseen by the Treasury Department 5 REGULATORY SCHEME

The EAR regulations control items of “dual use,” which are often in play in research settings ITAR controls military/defense items OFAC oversees embargoes enforced against various countries as well as the “Specially Designated Nationals” list Embargoed countries include Iran, Syria, North Korea, and the Sudan 6 REGULATORY SCHEME

Exports can occur in any number of ways: Overseas physical shipments Pass-through shipments, regardless of location International carried items /cloud storage Other oral/written disclosures 7 REGULATORY SCHEME

The “deemed export rule” holds that the release of controlled technology to foreign persons, regardless of location, constitutes an “export” and thus is subject to the export control regulations Because of this, universities need to very carefully evaluate what is being done on its campuses 8 REGULATORY SCHEME

Within the regulations is also what has come to be known as The Fundamental Research Exclusion (“FRE”) Universities expressed great concern in the wake of the EAR regulations being implemented in 1979 In response to these concerns, the federal government issued a directive outlining the FRE in 1985 In the years since, the FRE has continued to be clarified by the federal government In order to apply, two main elements must be present: The resulting information is ordinarily published (i.e. there are no restrictions on the publication of research results) There must not be any restrictions on the involvement of foreign nationals in the research 9 FUNDAMENTAL RESEARCH EXCLUSION

10 FUNDAMENTAL RESEARCH EXCLUSION

11 FUNDAMENTAL RESEARCH EXCLUSION P ROPRIETARY I NFORMATION R ESTRICTED P ARTIES E MBARGOES P HYSICAL SHIPMENTS

12 FUNDAMENTAL RESEARCH EXCLUSION P ROPRIETARY I NFORMATION R ESTRICTED P ARTIES C LASSIFIED R ESEARCH E MBARGOES P HYSICAL SHIPMENTS

Northwestern has engaged in restricted party screening since 2013 All incoming sponsors and subcontractors are screened against federal restricted party lists This includes a number of export compliance-oriented lists as well as SAM.gov listings (which includes the “Excluded Party Listings”). This ensures that we are not conducting business with any companies/individuals who are restricted by the federal government The screening process can be turned around very quickly, and also provides us with ongoing compliance assurances 13 QUICK SCEENING OVERVIEW

14 EXPORT CONTROL REFORM

15 EXPORT CONTROL REFORM The federal government has indicated its desire to overhaul the export control regulations, including consolidation, clarification, and simplification This was first broached by President Obama in his State of the Union Address in 2009 Pres. Obama subsequently remarked: “We launched a comprehensive review of our export controls and determined that we need fundamental reform in all four areas of our current system – in what we control, how we control it, how we enforce those controls, and how we manage our controls.” To date, we’ve seen some movement towards reform, but not the comprehensive reform anticipated dating back to 2009

In the highest profile export compliance case for universities, Professor J. Reece Roth of the University of Tennessee was convicted of violating the export control regulations and is currently serving a four-year prison sentence Dr. Roth ignored the terms of his contract, the law, and warnings from the university’s export compliance office Ultimately, Tennessee reported this to the FBI – Tennessee was not punished in any way (beyond ongoing bad publicity) 16 HEADLINES

17 HEADLINES

18 EXERCISE: SPOT THE (POTENTIAL) EXPORT COMPLIANCE ISSUE

19 EXERCISE: SPOT THE (POTENTIAL) EXPORT COMPLIANCE ISSUE

20 EXERCISE: SPOT THE (POTENTIAL) EXPORT COMPLIANCE ISSUE

21 CITI TRAINING Comprehensive export compliance training provided through CITI (University of Miami) will be accessible through the Northwestern tool Expected rollout Spring 2016 Training includes review/testing of various export compliance areas, including a basic overview and courses targeted at: Research Administrators and Researchers Biosafety and International Shipping Purchasing International Collaborations Sanctions

22 OECC TODAY

23 QUESTIONS/DISCUSSION