1. EXPORT COMPLIANCE “Just the Basics”
Wayne L. Mowery, Jr., Esq., ECoP®
Director of Compliance
University Export Compliance Officer
Empowered Official
Office of Ethics and Compliance
Office of Sponsored Programs
The Pennsylvania State University
200 Innovation Blvd, Suite 115
Phone:
Fax:

2. So what exactly are Export Controls?
Controls: A systems of laws, regulations and guidelines established by an empowered body to restrict otherwise unregulated activities in a manner designed to either facilitate certain socially desirable goals or to deter certain socially undesirable consequences
Export: An actual shipment or transmission of items, services, or technical data out of the United States, or the release of technology, software, or technical data to a foreign national in the United States. Technology, software, or technical data is “released” for export through:
Visual inspection by a foreign national of U.S. origin equipment and facilities;
Oral exchanges of information in the United States or abroad;
Transfer or shipment via any means (physical or electronic) to a foreign entity;
Provision of a service, or the application to situations abroad of personal knowledge or technical experience acquired in the United States. 2

3. So who exactly are foreign persons/nationals
Foreign Person/Foreign National: A term of exclusion – Anyone who is not…
A U.S. Citizen;
Natural, or
Naturalized
A permanent resident alien (Green Card)
Political Refuge or Asylee
Foreign Person/Foreign National also includes foreign governments, foreign government agents, and foreign corporations or entities (i.e. a business not organized or incorporated under U.S. law). 3

4. SO WHAT? Foreign Persons/Nationals:
Students
Employees
Visiting Scientists
Collaborators
End-users
Sponsors
Suppliers
Violations are subject to significant penalties

5. We are not in a position to operate as a research university without the heavy involvement of foreign scholars.
budget.psu.edu/factbook/StudentDynamic/MinorityEnrolbyEthnicity.aspx?YearCode=2014&FBPlusIndc=N (Fall 2015) 5

6. And these numbers are increasing as international student enrollments increase nationwide!
For the 2014/2015 Academic Year – International Student registrations increased 9.1% to 974,926 students nationwide.
Chinese student registrations increased by 10.8% overall to a total of nearly 304,040 students (31.2% of the total international student population).
Indian student registrations numbered nearly 132,888, a 29.4% increase (13.6% of total).
South Korean student registrations numbered nearly 63,710 (6.5% of total).
Combined China, India and South Korean students represent 51.3% of the total population of international students in the U.S. All combined more than 60% of the foreign students in the U.S. are from the SE Asia Region.
Saudi Arabia is 4th – 53,919 (21% increase and 6.1% of total)
Canada is 5th – 28,304 (a mere 3.2% of the total)
To put this is perspective, there are >3x more foreign students in the U.S. than U.S. students abroad (U.S. Foreign Study Students – 304,467)! 6

7. Export Compliance Impacts at Penn State….
Sponsored Research
Int’l Collaborations
International Travel
Inventory Management
Visiting Scientists
Physical Plant Issues
Foreign Visitors
Educational Components of an ECMP
Shipping (EHS)
Global Programs
Purchasing
Institutional Oversight
MOOCs
Export Control Reforms
Distance Learning
Human Resources
IT & Computer Security

8. The Regulations

9. U.S Government Primary Export Control Regulations
U.S. Agency
Regulates
Regulation
Type of Controls
State
Military Critical Technologies
ITAR (International Traffic in Arms Regulations)
Content Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix Based
Content, Destination, End-User 9

10. Export Control Regulations – An Example….
1.) The following commodities are under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121) when "space qualified" and operating at frequencies higher than 31.8 GHz: helix tubes (traveling wave tubes (TWT)) defined in 3A001.b.1.a.4.c; microwave solid state amplifiers defined in 3A001.b.4.b traveling wave tube amplifiers (TWTA) defined in 3A001.b.8; and derivatives thereof; 2.) "Space qualified" and radiation hardened photovoltaic arrays, as defined in 3A001.e.1.c, having silicon cells or having single, dual or triple junction solar cells that have gallium arsenide as one of the junctions, are subject to the export licensing authority of the Department of Commerce. All other "space qualified" and radiation hardened photovoltaic arrays defined in 3A001.e.1.c and spacecraft/satellite concentrators and batteries are under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121). See also 3A101, 3A201, and 3A991. Related Definitions: For the purposes of integrated circuits in 3A001.a.1, 5 x 103 Gy(Si) = 5 x 105 Rads (Si); 5 x 106 Gy (Si)/s = 5 x 108 Rads (Si)/s. For purposes of photovoltaic arrays in 3A001.e.1.c, an array predominately consists of: a substrate; solar cells having silicon cells or having single, dual, and or triple junction solar cells that have gallium arsenide as one of the junctions; coverglass; ultra-violet coating(s); and bonding agent(s). Spacecraft/satellite: solar concentrators, power conditioners and or controllers, bearing and power transfer assembly, and or deployment hardware/systems are controlled under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121).
Example of the complexity of the regulations

11. U.S Government Primary Export Control Regulations
U.S. Agency
Regulates
Regulation
Type of Controls
State
Military Critical Technologies
ITAR (International Traffic in Arms Regulations)
Content Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix Based
Content, Destination, End-User 11

12. International Traffic in Arms (ITAR)
Administered by the Department of State
Arms Export Control Act
Agency – Directorate of Defense Trade Controls (DDTC)
Department of Defense Involvement
Governs primarily military critical technology
Controlled items specified on the U.S. Munitions List (USML)
Hardware
Software
Technical Data
Defense Services
Controlled items restricted for all foreign persons

13. ITAR (22 CFR §120 et seq)
ITAR Covers (on the US Munitions List (USML))
Items with a predominately military/defense applications
Items of commercial use that have been adapted or modified expressly for military purposes
Items of commercial usage that contain ITAR technology – the ITAR see through rule
Technical data related to ITAR items
Defense Services
See Through Rule – prevents the transaction of ITAR controlled items contained in other items

14. ITAR (22 CFR §120 et seq) The 21 USML Official Categories: Firearms
Spacecraft Systems
Guns/Armament
Nuclear Weapons
Ammunition
Classified Articles
Launch Vehicles (Missiles)
Directed Energy Weapons
Explosives & Energetic Materials
[Reserved] Gas Turbine Engines
Surface Vessels of War (Navy)
Submersible Vessels
Ground Vehicles
Miscellaneous Articles
Aircraft
Military Training Equipment
Protective Personnel Equipment
Military Electronics
Fire Control – Range Finders
Materials and Misc. Articles
Toxicological Agents
Current 02/14

15. ITAR (22 CFR §120 et seq) Technical Data:
information “required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles
Classified or invention secret information
Software directly related to defense articles
Technical Data does not include:
Information in the public domain
General math, science and engineering principles
Technical Data – ex. Blueprints, drawings, plans, instructions, diagrams and photographs.

16. ITAR (22 CFR §120 et seq) Defense Service:
“[F]urnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles.
Export status of the “know-how” irrelevant
Defense Services – teaching someone how to operate ITAR controlled equipment or how to establish or evaluate ITAR controlled research activities.

17. ITAR (22 CFR §120 et seq)
Level of Control under ITAR is largely uniform
Very few exemptions or exceptions
Very limited differences in treatment based on destination – generally, ITAR controlled items require licenses to MOST countries
Policy of denial/embargoes for certain countries – ITAR §126.1 Prohibited Countries
Current Countries (02/14) - Afghanistan, Belarus, Cuba, Cyprus, Iran, Iraq, Ivory Coast, Eritrea, Fiji, Libya, North Korea, Syria, Vietnam, Sri Lanka, Burma (Myanmar), China, Haiti, Liberia, Lebanon, Rwanda, Somalia, Sudan, Zimbabwe, or Zaire (Democratic Republic of the Congo) , any UN Security Council arms embargoed country (e.g., for certain exports to Rwanda).

18. U.S Government Primary Export Control Regulations
U.S. Agency
Regulates
Regulation
Type of Controls
State
Military Critical Technologies
ITAR (International Traffic in Arms Regulations)
Content Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix Based
Content, Destination, End-User 18

19. Export Administration Regulations (EAR)
Administered by the Department of Commerce
Export Administration Act
Agency – Bureau of Industry and Security (BIS)
Governs “dual use” technologies
Controlled items are specified on the Commerce Control List (CCL)
Hardware
Software
Technical Data
Restrictions vary based on item and destination country
Dual use – both commercial and military applications
Covers all items in the US. If not specified on the CCL, EAR99.

20. Export Administration Regulations (EAR)
EAR Covers:
All items in the U.S.;
All U.S. origins items in the U.S. and abroad; and,
All foreign origin items incorporating more than a specified amount of EAR controlled technology
Items of specific coverage under the EAR are listed on the CCL in enumerated paragraphs called ECCN (Export Control Classification Numbers)
De minimis rule governs amount of US tech required to recapture foreign origin materials

21. Export Administration Regulations (EAR)
How to read an ECCN (eg. 3A992): 1. The initial alpha-numeric in an ECCN stands for the general category on CCL into which the item falls.
0 – Nuclear & Miscellaneous
6 – Sensors and Lasers
1 – Materials, Chemicals,
7 – Navigation and Avionics
Microorganisms & Toxins
8 – Marine
2 – Materials Processing
9 – Aerospace and Propulsion
3 – Electronics
4 – Computers
5a – Telecommunications
5b – Information Security

22. Export Administration Regulations (EAR)
How to read an ECCN (eg. 3A992): 2. The second alpha-numeric in an ECCN stands for product group within the broader category into which the item falls.
A – Systems, Equipment and Components
B – Test, Inspection and Production Equipment
C – Material
D – Software
E - Technology

23. Export Administration Regulations (EAR)
How to read an ECCN (eg. 3A992): 3. The remaining alpha-numeric grouping in an ECCN stands for itemized listing location within the product group. Items not listed in an ECCN are designated EAR99.

24. Export Administration Regulations (EAR)

25. Export Administration Regulations (EAR)
Once you have your ECCN, you can determine:
Reason for control (AT, NS, NO, etc.);
Country specific controls; and,
Available exemptions and exceptions
LVS – Low Value Shipments
Civilian End-Uses
Shipments to Country Group B Countries

26. Export Administration Regulations (EAR)

27. Export Administration Regulations (EAR)
Unlike the ITAR, the level of control under EAR is variable based on item designation, item specifications, intended use and/or intended recipient:
Numerous exemptions or exceptions may apply
Level of control is based on the facts at hand (who, what, where and, sometimes, why)
Exemptions or exceptions will largely not apply to embargoed countries.

28. U.S Government Primary Export Control Regulations
U.S. Agency
Regulates
Regulation
Type of Controls
State
Military Critical Technologies
ITAR (International Traffic in Arms Regulations)
Content Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix Based
Content, Destination, End-User 28

29. Office of Foreign Asset Controls (OFAC)
Administered by the Department of Treasury
Various laws apply (e.g. Trading with the Enemy Act)
Agency – Office of Foreign Asset Controls (OFAC)
Governs restrictions on transactions/interactions with embargoed nations and restricted parties
Country-based embargoes (e.g. Cuba or Iran)
Activity based embargoes or restrictions (e.g. Terrorism or Narcotics related controls)
Each embargo or control regime is specific to that country or grouping

30. Office of Foreign Asset Controls (OFAC)
Requires prior screening for potential limitations on economic relationships with individuals and/or companies
Restriction lists are multi-faceted, may control:
Financial transactions;
Travel
Export/import of goods/service
Listings may be managed or controlled by other government entities
Penn State has purchased a site-license for commercial screening software

31. Office of Foreign Asset Controls (OFAC)
Certain embargoes have General Licenses to permit activities deemed appropriate without review. Such activities typically relate to humanitarian efforts, such as medical assistance and educational/academic activities.
Other activities with a restricted person/embargoed country may require obtaining a Specific License from OFAC
OFAC license process is less regimented and detailed than under either the ITAR or the EAR

32. U.S Government Primary Export Control Regulations
U.S. Agency
Regulates
Regulation
Type of Controls
State
Military Critical Technologies
ITAR (International Traffic in Arms Regulations)
Content Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix Based
Content, Destination, End-User 32

33. How to Find Out More Training: Regulations:
Citi Program - online training modules
EAR Training – online BIS training videos and materials covering basic EAR issues
Census Training – online training on basic export/import compliance from Census Bureau
Regulations:
ITAR – DDTC Website
EAR – BIS Website
OFAC – OFAC Website

34. How to Find Out More Internal Resources:
Penn State Export Compliance Website
Office of Sponsored Programs Website
helpdesk –

35. Export Compliance Impacts at Penn State….
Sponsored Research
Int’l Collaborations
International Travel
Inventory Management
Visiting Scientists
Physical Plant Issues
Foreign Visitors
Educational Components of an ECMP
Shipping (EHS)
Global Programs
Purchasing
Institutional Oversight
MOOCs
Export Control Reforms
Distance Learning
Human Resources
IT & Computer Security

36. EXPORT COMPLIANCE “Just the Basics”
Wayne L. Mowery, Jr., Esq., ECoP®
Director of Compliance
University Export Compliance Officer
Empowered Official
Office of Ethics and Compliance
Office of Sponsored Programs
The Pennsylvania State University
200 Innovation Blvd, Suite 115
Phone:
Fax: