1. EXPORT CONTROLS: A PRIMER PUZZLING EXAMPLES FACED BY UNIVERSITIES
&
PUZZLING EXAMPLES FACED BY UNIVERSITIES
NURAP AT NOON, FEB 2019
Presented by Lane Campbell,
Director
Office for Export Controls Compliance (OECC)

2. OFFICE INTRODUCTION/role
The Office for Export Controls Compliance (OECC) was established in November 2012 in response to a nationwide trend (heightened scrutiny of university export compliance)
In the 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

3. Building the office
OECC has progressively developed its infrastructure since its inception
(steps outlined in blog post published on the eCustoms website:
“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 national dialogue

4. THE EVOLUTION OF university export compliance
Dating back to the early 2000s, post-9/11, export compliance offices began popping up at universities nationwide
Over the last 7-8 years, this growth has continued, 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 over 250 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

5. AUECO Membership 2008 - Date
THE EVOLUTION OF university export compliance
AUECO Membership Date

6. THE EXPORT COMPLIANCE PUZZLE
Contract clauses
PUBLICATION
RESTRICTIONS
PARTICIPATION
Proprietary info
Controlled/
Restricted/
Classified research
Fundamental Research
Exceptions
Physical shipments
Embargoes
Restricted
Parties

7. So what are we talking about here?
What is controlled?
Everything can be controlled! Contract clauses indicating that the research at hand is “subject to export controls” are merely stating the law
The federal government does publish lists of specific items that are controlled (two specific examples: the Commerce Control List (CCL) (dual use) and the U.S. Munitions List (defense items), as well as enforcing embargoes (via OFAC)
Once identified on a list, the item must be reviewed to determine destination restrictions and the possibility of a license exception
License exceptions can be either general (requiring no specific authorizations) or specific (for which a license request must be submitted)

8. So what are we talking about here?
What is controlled?
Also, the CCL uses a catch-all designation called “EAR99,” broadening the scope of restricted items
Additional considerations: restricted parties

9. So what are we talking about here?
Why are things controlled?
Concerns about economic and national security
The characteristics of the item itself raise concerns
The destination of the item is under heightened scrutiny (embargoes, e.g.)
The item may be employed for nefarious purposes

10. EXPORT COMPLIANCE RED FLAGS
Any involvement with Sensitive Countries
Collaborations, travel to/from, shipments, hosting visitors
Research deemed “sensitive”
Contract clauses
Funding source
Nature of the research
Restricted parties
both companies and individuals
Small, unsophisticated partners with no demonstrable knowledge of export compliance obligations

11. REGULATORY scheme - challenges
These regulations are extremely lengthy – there are ongoing efforts to simplify the regulations, but the fact remains they are heavy on text

12. REGULATORY scheme - challenges
These regulations are complex – making sense of the regulations requires not only a thorough dive into them, but often-times follow-ups with the appropriate agencies, peer review/discussion, etc.
Incorporating these regulations into the university compliance framework requires setting policies, establishing procedures, and developing relationships across the University

13. REGULATORY scheme - challenges
EAR
OFAC
ITAR
These regulations pose issues of overlapping jurisdiction
Generally, each set of regulations must be considered, and applicable controls must be cross-checked against multiple lists/regulations

14. THE IMPORTANCE OF (AND CHALLENGES RELATED TO) THE Fundamental research exclusion
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

15. QUICK SCEENING OVERVIEW
Northwestern has engaged in restricted party screening since 2013 using a third party vendor
Prior to then, restricted party screening was done manually with no appropriate audit trail and only “in the moment” screens
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 unauthorised 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

16. Export control reform

17. 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

18. Poster child for export violations at universities
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 was sentenced to four years in prison
Dr. Roth ignored the terms of his contract, the law, and warnings from his university’s export compliance office
Ultimately, Tennessee reported this to the FBI – Tennessee was not punished in any way (beyond ongoing bad publicity)
I do not believe there has been an export control-oriented event/training during my time in this role that does not mention this case

19. Recent bombshells
Recent months have seen a discernible increase in scrutiny from the federal government on overseas activity
Letter issued by NIH director Francis Collins outlining concerns about foreign influence
NDAA passed in mid-2018 identifying specific companies subject to restrictions and efforts to clamp down on U.S. involvement in foreign talent recruitment programs
DOE memo issued in late 2018 citing anticipated restrictions on DOE funding for those involved in foreign talent recruitment programs

20. Real world example
A professor is invited to present at an overseas conference
What questions must be asked to evaluate this trip for export compliance?

21. Real world example Where are they going? What are they presenting?
What are they bringing?
Who is attending the meeting?

22. CITI Training http://citiprogram.org/
Comprehensive export compliance training provided through CITI is accessible through the Northwestern tool
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

23. New initiatives
OECC has been working with Research Information Technology and the Office for Sponsored Research to develop a mechanism allowing for review of export control-sensitive documents (both pre- and post-award)
The goal is to allow review in anticipation of problematic terms that could undermine Northwestern’s participation in research projects

24. OECC Today

25. Questions/Discussion