US INT’L Students and Faculty RESEARCH ITAR ACADEMICSEAR Understanding Export Regulations for Research Administrators, or How to Cross Shark Infested waters without getting eaten or bit... EXPORT CONTROL WORKSHOP NCURA Regional Conference Lihue, Kauai April 23-26, 2006

Steve Eisner Export Control Officer Stanford University (650) Debra Murphy Research Compliance Manager Arizona State University (480)

What Are Export Control Regulations? Export Control Regulations prohibit the unauthorized “export” of certain controlled ITEMS, INFORMATION OR SOFTWARE to foreign persons or entities in the U.S. and abroad Export Control Regulations prohibit the unauthorized “export” of certain controlled ITEMS, INFORMATION OR SOFTWARE to foreign persons or entities in the U.S. and abroad ITEMS= Tangible things, equipment or hardware ITEMS= Tangible things, equipment or hardware INFORMATION = “Technical Data” such as models, formulae, engineering designs or “Technical Assistance” such as training or instruction INFORMATION = “Technical Data” such as models, formulae, engineering designs or “Technical Assistance” such as training or instruction SOFTWARE = Computer programs or microprograms in either “Source Code” (programming statements) or “Object Code” (machine-readable instructions) SOFTWARE = Computer programs or microprograms in either “Source Code” (programming statements) or “Object Code” (machine-readable instructions)

What is an “Export”? What is a Deemed Export? An “export” is a tangible shipment of an item, information or software outside of the U.S., OR An “export” is a tangible shipment of an item, information or software outside of the U.S., OR A transfer or “release” of information or software code to a foreign person in the U.S. (“deemed export”) A transfer or “release” of information or software code to a foreign person in the U.S. (“deemed export”) This release of information is known as a “deemed export” – the release is “deemed” to be an export to the home country of the foreign person This release of information is known as a “deemed export” – the release is “deemed” to be an export to the home country of the foreign person

What is a Deemed Export? (Cont.)  Takes place through an oral or written disclosure of information, or through visual inspection Examples: , telephone, websites, laboratory tours, foreign national research collaboration Examples: , telephone, websites, laboratory tours, foreign national research collaboration This is the PRIMARY export control issue facing research administrators. This is the PRIMARY export control issue facing research administrators. Remember!! – The overseas shipment of items or the sharing, transmission or transfer of information or software is considered an “export” and may require authorization if export controlled. Remember!! – The overseas shipment of items or the sharing, transmission or transfer of information or software is considered an “export” and may require authorization if export controlled.

Who is a “Foreign Person”? A “foreign person” is anyone who is not a “U.S. person” A “foreign person” is anyone who is not a “U.S. person” A “U.S. person” is either: A “U.S. person” is either: A U.S. citizen, lawful permanent resident alien (“Green Card Holder”), refugee, protected political asylee or someone granted temporary residency under amnesty or Special Agricultural Worker provisions; or A U.S. citizen, lawful permanent resident alien (“Green Card Holder”), refugee, protected political asylee or someone granted temporary residency under amnesty or Special Agricultural Worker provisions; or Any juridical person (i.e. organizations under the laws of the United States or any jurisdiction within the U.S., including foreign branches)

Who is a Foreign Person? (Cont.) Examples of foreign persons: Individuals in the U.S. in Non-Immigrant Status (H-1B, F-1, J-1) Any branch of a foreign government Any foreign corporation or group that is not incorporated or organized to do business in the U.S.

Why Do We Have Export Control Regulations? Objective: To protect U.S. national security and foreign policy interests by - Objective: To protect U.S. national security and foreign policy interests by - Denying our adversaries the means to advance their military potential Denying our adversaries the means to advance their military potential Implementing foreign policy objectives Implementing foreign policy objectives Preventing terrorism Preventing terrorism Inhibiting the proliferation of Weapons of Mass Destruction (nuclear, biological, chemical) Inhibiting the proliferation of Weapons of Mass Destruction (nuclear, biological, chemical) Fulfilling Multilateral Obligations (i.e. UN Sanctions, Trade Agreements) Fulfilling Multilateral Obligations (i.e. UN Sanctions, Trade Agreements)

What Are the Various Export Control Regulations? 1. Export Administration Regulations (EAR) 15 CFR CFR Enforced by the Commerce Department’s Bureau of Industry and Security (BIS) Enforced by the Commerce Department’s Bureau of Industry and Security (BIS) Governs export and reexport of all U.S. origin items, information and/or software Governs export and reexport of all U.S. origin items, information and/or software Covers “dual use” items, information and software designed for commercial purposes but having military applications Covers “dual use” items, information and software designed for commercial purposes but having military applications

EAR/CCL Categories Export controlled items, information and software organized into 10 discrete categories on Commerce Control List (CCL) Export controlled items, information and software organized into 10 discrete categories on Commerce Control List (CCL) CCL Categories capture many areas of university research such as advanced materials, astrophysics, telecommunications, microelectronics, encryption, optoelectronics, computing, biotechnology, aerospace etc. CCL Categories capture many areas of university research such as advanced materials, astrophysics, telecommunications, microelectronics, encryption, optoelectronics, computing, biotechnology, aerospace etc.

EAR/CCL Categories (Cont.) CCL’s 10 categories are broken down into Export Control Commodity Numbers (ECCNs) CCL’s 10 categories are broken down into Export Control Commodity Numbers (ECCNs) First digit in an ECCN = CCL Category (i.e. 3A001) First digit in an ECCN = CCL Category (i.e. 3A001) (Category 3 = Electronics, 5 = Communications, etc.) (Category 3 = Electronics, 5 = Communications, etc.) Items on the CCL are generally represented by the letters “A”, “B” and “C” (i.e. 3A001, 5B991, 6C002) Items on the CCL are generally represented by the letters “A”, “B” and “C” (i.e. 3A001, 5B991, 6C002) “A” Subcategory = Systems, Equipment and Components “A” Subcategory = Systems, Equipment and Components “B” Subcategory = Test, Inspection and Production Equipment “B” Subcategory = Test, Inspection and Production Equipment “C” Subcategory = Materials “C” Subcategory = Materials Software on the CCL is represented by the letter “D” following the controlled category number (i.e. 3D001, 5D991) Software on the CCL is represented by the letter “D” following the controlled category number (i.e. 3D001, 5D991) Information (what the EAR calls “Technology”) on the CCL is represented by the letter “E” following the controlled category number (i.e. 3E001, 5E991) Information (what the EAR calls “Technology”) on the CCL is represented by the letter “E” following the controlled category number (i.e. 3E001, 5E991)

EAR/CCL Categories (Cont.) The EAR defines “technology” as: The EAR defines “technology” as: “Specific information necessary for the development, production or use of equipment or software. Technology includes information subject to the EAR released in the form of technical assistance or technical data.” “Specific information necessary for the development, production or use of equipment or software. Technology includes information subject to the EAR released in the form of technical assistance or technical data.” Key concept for researchers: The use of controlled equipment of software does not in and of itself constitute a licensable export unless specific controlled information required for its use is transferred during release. Key concept for researchers: The use of controlled equipment of software does not in and of itself constitute a licensable export unless specific controlled information required for its use is transferred during release.  EAR99 a “catch-all” category for items/software/info subject to the EAR but not listed on the CCL

On CCL – No License Exception Available – License Required On CCL - License Required to Country of Export, But License Exception Available On CCL/NLR To Country of Export Not On CCL EAR 99/NLR Except to Embargoed Countries EAR Licensing Pyramid

What Are the Various Export Control Regulations? 2. International Traffic in Arms Regulations (ITAR) 22 CFR CFR  Enforced by State Department’s Directorate of Defense Trade Controls (DDTC) Covers “defense articles” (tangible items, information and software) and “defense services” (training, assistance) specifically designed, developed or modified for military applications Covers “defense articles” (tangible items, information and software) and “defense services” (training, assistance) specifically designed, developed or modified for military applications Transfers of defense articles and provision of defense services to foreign persons require DDTC approval unless excluded or exempt Transfers of defense articles and provision of defense services to foreign persons require DDTC approval unless excluded or exempt

ITAR / USML Defense articles - organized into 21 discrete categories on the U.S. Munitions List (USML) Defense articles - organized into 21 discrete categories on the U.S. Munitions List (USML) Categories include: Toxicological Agents, Military Electronics, Aircraft and Associated Equipment and Directed Energy Weapons Categories include: Toxicological Agents, Military Electronics, Aircraft and Associated Equipment and Directed Energy Weapons Category XV “Spacecraft Systems and Associated Equipment” pose biggest obstacle for research universities Category XV “Spacecraft Systems and Associated Equipment” pose biggest obstacle for research universities

ITAR and Spacecraft Systems Includes space-related items, information and software even if designed for commercial or scientific purposes Includes space-related items, information and software even if designed for commercial or scientific purposes Examples: Communication and research satellites, certain GPS equipment, space-qualified/radiation hardened electronics Examples: Communication and research satellites, certain GPS equipment, space-qualified/radiation hardened electronics ITAR space-related items, information and software pose significant Defense Service issues for colleges and universities

What Are the Various Export Control Regulations? 3. Office of Foreign Assets Control (OFAC) Enforced by the Treasury Department’s Office of Foreign Assets Control (OFAC) Enforced by the Treasury Department’s Office of Foreign Assets Control (OFAC) Economic sanctions regulations prohibiting trade with and/or the transfer of payments, property or anything of “value” to certain sanctioned or embargoed countries or “Specially Designated Nationals” (SDNs) of those countries Economic sanctions regulations prohibiting trade with and/or the transfer of payments, property or anything of “value” to certain sanctioned or embargoed countries or “Specially Designated Nationals” (SDNs) of those countries SDNs - terrorists, drug kingpins and persons engaged in WMD proliferation (includes organizations to which SDNs belong) SDNs - terrorists, drug kingpins and persons engaged in WMD proliferation (includes organizations to which SDNs belong)

OFAC Sanctioned/Embargoed Countries Countries currently subject to U.S. trade embargoes – Countries currently subject to U.S. trade embargoes – Cuba, Iran, Syria, North Korea, Myanmar (Burma) and Sudan Cuba, Iran, Syria, North Korea, Myanmar (Burma) and Sudan OFAC Listed Countries and Territories Subject to Sanctions – OFAC Listed Countries and Territories Subject to Sanctions – Liberia, Iraq, Zimbabwe, Balkans, Libya, Cote D'Ivoire (Ivory Coast) and the Palestinian Territories (Palestinian Authority) Liberia, Iraq, Zimbabwe, Balkans, Libya, Cote D'Ivoire (Ivory Coast) and the Palestinian Territories (Palestinian Authority)

OFAC Prohibited Activities Examples of prohibited activities in embargoed countries that affect research institutions: Examples of prohibited activities in embargoed countries that affect research institutions: Shipment of tangible items in support of research with knowledge that items will be used in or for the benefit of the embargoed country Shipment of tangible items in support of research with knowledge that items will be used in or for the benefit of the embargoed country Payments to persons including organizations to conduct or support in-country research (i.e. surveys, interviews, fellowships etc.) Payments to persons including organizations to conduct or support in-country research (i.e. surveys, interviews, fellowships etc.) Providing financial or material support to conferences hosted or co-hosted by academic institutions in embargoed countries Providing financial or material support to conferences hosted or co-hosted by academic institutions in embargoed countries

Why the Increased Attention to Export Controls? Security and immigration concerns post 9/11 Security and immigration concerns post 9/11 Sponsored research contains progressively greater restrictions on technology transfer to foreign persons Sponsored research contains progressively greater restrictions on technology transfer to foreign persons Not just Federal contracts but corporate grants/gifts as well Not just Federal contracts but corporate grants/gifts as well March 2004 DOC Inspector General report citing perceived deemed export loopholes at universities March 2004 DOC Inspector General report citing perceived deemed export loopholes at universities Proposed Rule - Proposed Rule - Grabs the attention of University Presidents and Provosts Grabs the attention of University Presidents and Provosts Generates over 300 comments vehemently arguing against Rule Generates over 300 comments vehemently arguing against Rule

What is an Export Control Exclusion? It’s how you, as a research administrator addressing the flow of information between students and scholars, can avoid getting eaten or bit!! It’s how you, as a research administrator addressing the flow of information between students and scholars, can avoid getting eaten or bit!! A provision that exempts certain information and software from export licensing requirements A provision that exempts certain information and software from export licensing requirements Most export control exclusions share the concept that information or software that is generally in the public domain (ITAR) or publicly available (EAR) is not subject to export control regulations Most export control exclusions share the concept that information or software that is generally in the public domain (ITAR) or publicly available (EAR) is not subject to export control regulations Export control exclusions in the EAR and ITAR are similar, but differ in important ways. Export control exclusions in the EAR and ITAR are similar, but differ in important ways.

Export Control Exclusions Public Domain Exclusion (ITAR) Public Domain Exclusion (ITAR) Publicly Available Exclusion (EAR) Publicly Available Exclusion (EAR) Educational Information Exclusion Educational Information Exclusion Employment Exclusion (ITAR) Employment Exclusion (ITAR) Fundamental Research Exclusion Fundamental Research Exclusion

Public Domain Exclusion (ITAR) USML-listed information and software that is generally accessible and available to the public through/at one or more of the following: USML-listed information and software that is generally accessible and available to the public through/at one or more of the following: Fundamental research in science and engineering performed at an accredited institution of higher learning in the US; Fundamental research in science and engineering performed at an accredited institution of higher learning in the US; Fundamental research Fundamental research Libraries open to the public; Libraries open to the public; Sales at newsstands or bookstores; Sales at newsstands or bookstores; Subscriptions available without restriction; Subscriptions available without restriction; Published patents available at any patent office; Published patents available at any patent office; Unlimited distribution at conferences, meetings, seminars, trade shows or exhibitions in the US that are generally available to the public; and/or Unlimited distribution at conferences, meetings, seminars, trade shows or exhibitions in the US that are generally available to the public; and/or Websites that are accessible to all members of the public, free of charge, and where the university does not have knowledge or control over who visits the site or downloads the information or software Websites that are accessible to all members of the public, free of charge, and where the university does not have knowledge or control over who visits the site or downloads the information or software

Publicly Available Exclusion (EAR) CCL-listed information and software that is generally accessible to the interested public in any form through/at one or more of the following: CCL-listed information and software that is generally accessible to the interested public in any form through/at one or more of the following: Fundamental research in science and engineering performed at an accredited institution of higher learning in the US; Fundamental research in science and engineering performed at an accredited institution of higher learning in the US; Fundamental research Fundamental research Publication in periodicals, books, print, electronic, or any other media available for general distribution either free or at a cost not exceeding the cost of reproduction and distribution (allows for a reasonable profit); Publication in periodicals, books, print, electronic, or any other media available for general distribution either free or at a cost not exceeding the cost of reproduction and distribution (allows for a reasonable profit); Libraries open to the public or from university libraries; Libraries open to the public or from university libraries; Through subscriptions which are available without restriction either free or at a cost not exceeding the cost of reproduction and distribution (allows for a reasonable profit); Through subscriptions which are available without restriction either free or at a cost not exceeding the cost of reproduction and distribution (allows for a reasonable profit); Published patents and open (published) patent applications available at any patent office; and/or Published patents and open (published) patent applications available at any patent office; and/or Unlimited distribution at conferences, meetings, seminars, trade shows or exhibitions in the US or abroad that are generally accessible to the public for a fee reasonably related to the cost, and where attendees may take notes. Unlimited distribution at conferences, meetings, seminars, trade shows or exhibitions in the US or abroad that are generally accessible to the public for a fee reasonably related to the cost, and where attendees may take notes.

Publicly Available Exclusion (EAR / Software) CCL-listed software becomes publicly available through/at one or both of the following: CCL-listed software becomes publicly available through/at one or both of the following: General distribution either free or at a cost not exceeding the cost of reproduction and distribution (with allowance for a reasonable profit on the reproduction and distribution of such materials); and/or General distribution either free or at a cost not exceeding the cost of reproduction and distribution (with allowance for a reasonable profit on the reproduction and distribution of such materials); and/or Websites which are accessible to all members of the public, free of charge, and where the institution does not have knowledge or control of who visits the site or downloads the information or software. Websites which are accessible to all members of the public, free of charge, and where the institution does not have knowledge or control of who visits the site or downloads the information or software.

Educational Information Exclusion ITAR – Export Controls do not apply to information concerning “general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities.” ITAR – Export Controls do not apply to information concerning “general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities.” EAR – Export Controls do not apply to “educational information” released by instruction in catalog courses and associated teaching laboratories. EAR – Export Controls do not apply to “educational information” released by instruction in catalog courses and associated teaching laboratories.

Employment Exclusion (ITAR) ITAR license not required for colleges and universities to share information in the U.S. with a foreign person if that person: Is a “bona fide” employee of University – full time w/full benefits Is a “bona fide” employee of University – full time w/full benefits Grad students are EXCLUDED as are most Post-Docs Grad students are EXCLUDED as are most Post-Docs Not a national from an ITAR embargoed country Not a national from an ITAR embargoed country Belarus, Cuba, Iran, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Somalia, Sudan, Iraq, Afghanistan, Rwanda, and D.R. Congo Belarus, Cuba, Iran, Libya, North Korea, Syria, Vietnam, Burma, China, Haiti, Liberia, Somalia, Sudan, Iraq, Afghanistan, Rwanda, and D.R. Congo Resides at a permanent address in the U.S. while employed Resides at a permanent address in the U.S. while employed Will apply mostly to foreign nationals in H-1B status Will apply mostly to foreign nationals in H-1B status

Fundamental Research Exclusion Covers most basic research at colleges and universities: Definition (NSDD 189) – “Basic or applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community” Per NSDD 189, it is the policy of the U.S. Government “that, to the maximum extent possible, the products of fundamental research remain unrestricted.”

Fundamental Research Exclusion (Cont.) In order to be considered in the public domain, the information or software must have been generated in the course of research performed within the United States. In order to be considered in the public domain, the information or software must have been generated in the course of research performed within the United States. Information and software resulting from fundamental research outside of the U.S. is not treated by export control law as having entered into the public domain, and is subject to export control, unless it qualifies under other public domain criteria. Information and software resulting from fundamental research outside of the U.S. is not treated by export control law as having entered into the public domain, and is subject to export control, unless it qualifies under other public domain criteria.

Fundamental Research Exclusion (Cont.) The fundamental research exemption will not apply if the university accepts any restrictions on the publication of resulting information, other than a brief (~ 90 day) advance review by sponsors to:  Prevent divulging propriety information provided to the investigator by the sponsor  Insure that publication will not compromise patent rights of the sponsor

Fundamental Research Exclusion (Cont.) Fundamental Research Exclusion is destroyed by any clause that:  Gives the sponsor the right to approve publications  Restricts participation of foreign nationals in conduct of research by precluding access to research results  Restriction also raises “Openness in Research” policy issues for colleges and universities The Fundamental Research Exclusion is destroyed by such clauses regardless of sponsorship (federal, private or non-profit)

How are Research Grants and Contracts Impacted? Strategic Federal funding opportunities (Homeland Security, NIH, DOD) directly linked to export control regulations Strategic Federal funding opportunities (Homeland Security, NIH, DOD) directly linked to export control regulations Restrictions on publication and access by foreign nationals invalidate the fundamental research exemption Restrictions on publication and access by foreign nationals invalidate the fundamental research exemption Corporate sponsors may not clearly identify “protected technologies” in contract Corporate sponsors may not clearly identify “protected technologies” in contract Intellectual Property – involvement of foreign nationals Intellectual Property – involvement of foreign nationals

Contracts and Grants: What do I watch for? Shipments of equipment to a foreign country Shipments of equipment to a foreign country Training or collaboration with foreign nationals Training or collaboration with foreign nationals Research activities performed in an embargoed country Research activities performed in an embargoed country Reference to export controlled technologies in an award document Reference to export controlled technologies in an award document Restrictions on publication rights Restrictions on publication rights Restrictions on foreign participation Restrictions on foreign participation

Contracts and Grants: What can we do? Assert an exemption within the proposal and During award negotiation remove terms and conditions that limit:  Rights to publish or present results  Access or participation of foreign nationals

Contracts and Grants: What more can we do? A general and qualified statement that the institution agrees to abide by U.S. export control laws may suffice if all else fails. For example: “Recipient agrees to comply with all U.S. export control laws and regulations of the United States, subject to all exemptions and exclusions thereto."

Situations That Raise “Red Flags” Grant/Contract terms & conditions limiting access to or dissemination of research results Grant/Contract terms & conditions limiting access to or dissemination of research results Third-Party items, information or software to which foreign national access is restricted Third-Party items, information or software to which foreign national access is restricted Licensing Agreements Licensing Agreements NDAs/Confidentiality Agreements NDAs/Confidentiality Agreements Material Transfer Agreements Material Transfer Agreements Tangible Exports Tangible Exports Research samples, shared equipment, 3 rd Party proprietary items Research samples, shared equipment, 3 rd Party proprietary items Look for Availability of License Exceptions (EAR) and Exemptions (ITAR) Look for Availability of License Exceptions (EAR) and Exemptions (ITAR)

More Situations That Raise “Red Flags” Sharing/Shipping Encryption Source Code Abroad Sharing/Shipping Encryption Source Code Abroad Notification/Review requirements may apply Notification/Review requirements may apply Travel To/Transactions With OFAC Sanctioned Countries Travel To/Transactions With OFAC Sanctioned Countries ANY Item, Information or Software that is: ANY Item, Information or Software that is: Designed or modified for a military use Designed or modified for a military use For use in outer space For use in outer space Suspected use in/for a weapon of mass destruction Suspected use in/for a weapon of mass destruction (nuclear, chemical, biological, missiles) (nuclear, chemical, biological, missiles)

Export Control Penalties NOTE OF CAUTION!! Individuals can be held personally responsible for civil and criminal violations of Export Control Regulations – this is in addition to any institutional penalties! ITAR - $1,000,000 per violation and up to 10 yrs. EAR - $50,000 per violation and up to 20 yrs.

Mahalo! Or Thank You Very Much!! Useful Links:   U.S. Bureau of Industry and Security (Commerce):   Directorate of Defense Trade Controls (State):   Office of Foreign Assets Control (Treasury):   Arizona State University Research Compliance Office:   Stanford University Export Controls Home Page:   Stanford University Export Controls Decision Tree:   NSDD 189:

Q’s and A’s Steve Eisner Export Control Officer Stanford University (650) Debra Murphy Research Compliance Manager Arizona State University (480)