Export Control Regulations Overview for Research Administration Personnel

Why Is Compliance Important? Possibility of Substantial Fines and Imprisonment for Violators Civil & Criminal Penalties, for the Individual and the Institution Loss of Export Privileges Limiting participation of foreign nationals in University research is not realistic and contrary to policy Bad Publicity

Export Controls in a Nutshell

Three U.S. Export Licensing Programs U.S. Department of State (Office of Defense Trade Controls) controls defense articles, defense services, and related technical data, including most space-related articles. U.S. Department of Commerce (Bureau of Industry and Security) controls “dual-use” items – goods and technology with both civilian and military/strategic uses. U.S. Department of the Treasury oversees U.S. trade embargoes (Office of Foreign Assets Control) and enforces all three programs at U.S. borders through U.S. Customs Service. Cuba

Commerce Department State Department Treasury Department Law and Regulations Commerce Department State Department Treasury Department Export Administration Act Arms Export Control Act Trading with the Enemy Act, Int’l Emergency Economic Powers Act, & Others Export Administration Regulations (“EAR”) 15 C.F.R. Parts 700-799 International Traffic in Arms Regulations (“ITAR”) 22 C.F.R. Parts 120-130 Iraq Sanctions Regulations, Terrorism Sanctions Regulations, & Others 31 C.F.R. Parts 500-599 Commerce Control List U.S. Munitions List List of Specially Designated Nationals & Blocked Persons

What Is an Export? ITAR 120.17, EAR 734.2(b) An actual shipment or transmission of items subject to the EAR or ITAR out of the United States Disclosing (including oral or visual disclosure) “technical data” or “technology” (including software source code) to a “foreign person,” whether in the United States (“deemed export”) or abroad Performing technical assistance, training, or other “defense services” for, or on behalf of, a “foreign person,” (including foreign corporations) whether in the United States (“deemed export”) or abroad Reexporting from foreign countries U.S.-origin goods or technical data, goods incorporating U.S. components, or goods manufactured from U.S. technology or reexporting U.S.-origin “technical data” or software

EXAMPLES OF EXPORTS Physical Shipments or Hand Carry Release of technical data or software in a foreign country Release of Source Code to a foreign national in the US Release of Technical Data to a foreign national in the US Inspections of U.S. Equipment and Facilities by a Foreign National Demonstrations, Meetings, and Training

U.S. and Foreign Persons ITAR 120.15 & 16, EAR 772.1 “U.S. Person” means: a “Lawful Permanent Resident (8 USC 1101 (a)(20)) U.S. Citizen or national Legal immigrant with a “green card” a “Protected Individual” under the INA (8 USC 1324(b)(3)) designated an asylee or refugee a temporary resident under amnesty provisions but does not include Protected Individuals who: fail to apply for citizenship within 6 months of becoming eligible have not been naturalized within 2 years after applying any entity incorporated to do business in the United States “Foreign Person” means everyone else includes foreign businesses not incorporated in the U.S. EAR does not use the term “Foreign Person,” instead refers to “foreign national,” exempting Protected Individuals (See EAR 734.2(b)(ii))

U.S. Munitions List (USML) I - Firearms II - Artillery Projectors III - Ammunition *IV - Launch Vehicles, etc... *V - Explosives, 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 XI - Military Electronics *XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment *XIII - Auxiliary Military Equipment XIV - Toxicological Agents and Equipment and Radiological Equipment *XV - Spacecraft Systems and Associated Equipment XVI - Nuclear Weapons Design and Related Equipment XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated XVIII - Reserved XIX - Reserved XX - Submersible Vessels, Oceanographic and Associated Equipment XXI - Miscellaneous Articles 13 13 13 13 13

Commerce Control List (CCL) Category 0 - Nuclear Materials, Facilities and Equipment and Misc. Category 1 - Materials, Chemicals, Microorganisms and Toxins Category 2 - Materials Processing Category 3 - Electronics Category 4 - Computers Category 5 - Telecommunications and Information Security Category 6 - Lasers and Sensors Category 7 - Navigation and Avionics Category 8 - Marine Category 9 - Propulsion Systems, Space Vehicles and Related Equipment 38 23 30 23 23

Examples of Items Covered by Category 3 - Electronics Category Example Systems, Equip, Mass Spectrometers & Oscilloscopes & Components Test, Inspection, Equipment for the manufacturing of production &Prod Equip semiconductor devices or material Materials Hetero-epitaxial materials consisting of a “substrate” having stacked epitaxially grown multiple layers of: silicon, germanium,or compounds of gallium or indium Software Computer-aided design software designed for semiconductor devices or integrated circuits having any of the following: design rules or circuit verification rules, simulation of the physically laid out circuits, or lithographic processing simulators for design Technology Technical data for the development of production of any of the above items

Technical Data & Technology ITAR 120.10, EAR 772.1 ITAR 120.10 defines “technical data” as Information . . . required for the design, development production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles. Invention covered by an invention secrecy order Software directly related to defense articles

Technical Data & Technology ITAR 120.10, EAR 772.1 EAR 772.1 defines “technology” as Specific information necessary for the “development,” “production,” or “use” of a product. The information takes the form of “technical data” or “technical assistance.” Technical assistance may take forms such as instruction, skills training, working knowledge, and consulting services and may involve transfer of “technical data.” “Technical data” 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, read-only memories.

Technical Data & Technology ITAR 120.10, EAR 772.1 What is not “technical data” or “technology” Publicly available technical data and software Published for sale, in libraries open to the public, or through patents available at any patent office General scientific, mathematical, or engineering principles commonly taught in colleges and universities Through unlimited distribution at a conference, meeting, seminar, trade show, or exhibition (provided no previous government or industry restrictions on distribution applied) Arise during or result from fundamental research, where no restrictions on publication or access accepted Non-technical contract or business documents

National Security Decision Directive NSDD-189 In September 1985, the Reagan Administration issued NSDD-189 in which it established the following policies: To the maximum extent possible, the products of fundamental research should remain unrestricted. Where the national security requires control, the mechanism for control of information generated during Federally-funded fundamental research in science, technology, and engineering at colleges, universities, and laboratories is classification. No restriction may be placed upon the conduct or reporting of Federally-funded fundamental research that has not received national security classification, except as provided in applicable U.S. statutes. President Bush’s National Security Advisor, Condoleezza Rice, reaffirmed NSDD-189 in November 2001.

National Security Decision Directive NSDD-189 NSDD-189 defined “fundamental research” as Basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community. It is distinguished from research which results in information which is restricted for proprietary reasons or pursuant to specific U.S. Government access and dissemination controls.

National Security Decision Directive NSDD-189 NSDD-189’s definition of “fundamental research” is reflected throughout the ITAR and EAR in terms of what research is subject to export controls. Avoiding restrictions on access and dissemination of research findings in contracts with the U.S. Government and industry is a key strategy for minimizing export control issues in university and research laboratory settings.

Key EAR Exceptions EAR 734.3(b) – “What is not subject to the EAR?” Publicly available technology and software, except software controlled for EI (encryption) under ECCN 5D002 that Are already published or will be published – EAR 734.7 Arise during, or result from, fundamental research – EAR 734.8 Are educational – EAR 734.9 Are included in certain patent applications – EAR 734.10 See Supplement No. 1 to Part 734 for extensive explanatory questions and answer regarding what is not subject to the EAR in the context of university and research laboratory activities.

Key EAR Exceptions EAR 734.11 – “What is government research covered by contract controls? If research is funded by the U.S. Government, and specific national security controls are agreed on to protect information resulting from the research, EAR 734.3(b)(3) will not apply.

Key EAR Exceptions Examples of “specific national security controls” include: Requirements for prepublication review by the Government, with right to withhold permission for publication Restrictions on prepublication dissemination of information to non-U.S. citizens or other categories of persons Restrictions on participation of non-U.S. citizens or other categories of persons in the research. BUT: A general reference to one or more export control laws or regulations or a general reminder that the Government retains the right to classify is not a “specific national security control.” (EAR 734.11)

Key ITAR Exemptions ITAR 125.4(b)(10) – Exempts from licensing requirements disclosures of unclassified technical data in the U.S. by U.S. institutions of higher learning to foreign persons who are their bona fide and full time regular employees. Employee’s permanent abode throughout the period of employment must be in the U.S. Employee must not be a national of a country to which exports are prohibited pursuant to ITAR 126.1 (e.g., Belarus, Cuba, Iran, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Somalia, and Sudan—list as of 7/2003) The institution informs the individual in writing that the technical data may not be transferred to other foreign persons without the prior written approval of the Office of Defense Trade Controls

Take Home Messages

Do’s and Don’ts Do NOT Ship Any Item Outside the U.S. without first checking the ITAR and EAR Lists to determine if the item is controlled (This includes Outgoing MTA’s, Software Licenses, and any Agreement Deliverables) Secure License Approval (through UCOP) or verify license exception PRIOR to Shipment for all controlled items Do NOT Accept Publication or Access Controls in research agreements (regardless of whether federal, state, or private) Do NOT create special training or access programs limited to select foreign companies or foreign nationals without first securing a government-approved Technical Assistance Agreement

Do’s and Don’ts Screen all proposed research contracts from government and industry for access and dissemination restrictions that might jeopardize the project’s qualification as “fundamental research.” Do NOT Accept clauses, such as: DOD Clause 252.204-7000, Disclosure of Information FAR Clause 52.227-17, Rights in Data, Special Works Airforce Clause 5352.227-9000, Export Controlled Data Restrictions Army Clause 52-04-4401, Foreign Nationals Performing Under Contract (Feb 2002) Questionnaire for Public Trust Positions (SF89P) or National Agency Check/Name Check Request DD2345, Militarily Critical Technical Data Agreement Watch out for flow down language!

Do’s and Don’ts Review any Confidentiality/Non-Disclosure Agreements to insure that UC is not assuming the burden of restricting dissemination based on citizenship status or securing license Require Commercial Contractor to Secure Any Required Export License Prior to Transfer of Proprietary Data to UC (See EAR 734.8(b)(4) and EAR Supplement 1, Section D, Question 2) Can agree that the individual to whom proprietary data transferred will not disclose it to anyone (including other UC personnel) Can agree that UC will comply with Export Regulations; can not agree that data generated by UC in the course of the research is export controlled

Do’s and Don’ts Whenever possible, make University created software, databases, and other technical data “publicly available” Publication in periodicals, books, print, electronic, or other media available to a community of persons interested in the subject matter either free or at a price that does not exceed the cost of reproduction and distribution (See EAR Supplement 1, Questions A(1) - A(6) If the source code of a software program is publicly available, then the machine readable code compiled from the source code is software that is publicly available and, therefore, not subject to the EAR The cost of reproduction and distribution may include variable and fixed allocations of overhead and normal profit for the reproduction and distribution functions but may not include recovery for development, design, or acquisition, such that the provider does not receive a fee for the inherent value of the software.

Recommendations Allow sufficient time for governmental authorities to process your application – some ITAR applications take literally months to process – again, Plan ahead! Consider screening faculty, students, and vendors against “denied party” lists of State, Commerce, and Treasury Additional Resources: Auburn University Technology Control Plan at http://web6.duc.auburn.edu/research/vpr/security/tcp.pdf Berkeley Law Export Control Manual at http://www.lbl.gov/ehs/security/01export/manual.html See University of Maryland procedures at http://www.umresearch.umd.edu/ORAA/export_control/

Is the Item “Export Controlled?” EAR List at: http://www.access.gpo.gov/bis/ear/ear_data.html ITAR List at: http://www.pmdtc.org/docs/ITAR/22cfr121_Part_121.pdf For EAR Items: 1)Check the “reason for control”; 2)Check country chart; 3)Determine if license required in the column for the country where item to be shipped For EAR Item, if no “check” in control column for country, then ship under NLR (no license required); If item being shipped is not on Commodity Control List, then ship EAR99 (exempt) For ITAR Item, if on list, contact UCOP; license will be required because there is no EAR equivalent “country chart”

Questions?