1. Office of Research Services 14/20/2007 Export Controls: What Are They and Why Do They Matter? Office of Research Services Donald T. Deyo, Esq. Director, Corporate Contracts Clifford K. Weber, Esq. Associate Director, Corporate Contracts

2. 4/20/2007Office of Research Services2 Export Controls – Goals for Today Broad understanding of export controls – what they are Broad understanding of export controls – what they are Why export controls are important Why export controls are important What questions you need to ask or issues you need to think about in completing transmittal forms for new projects What questions you need to ask or issues you need to think about in completing transmittal forms for new projects Whom to ask for advice in ORS Whom to ask for advice in ORS

3. 4/20/2007Office of Research Services3 Export Controls – What? Regulations promulgated by various federal agencies under federal law to restrict, limit, curtail, or prevent exports of certain items to certain countries or individuals Regulations promulgated by various federal agencies under federal law to restrict, limit, curtail, or prevent exports of certain items to certain countries or individuals – Export Administration Regulations (EAR) Department of Commerce, Bureau of Industry and Security (BIS) – International Traffic in Arms Regulations (ITAR) Department of State, Directorate of Defense Trade Control (DDTC)

4. 4/20/2007Office of Research Services4 Export Controls –Other Departments and Agencies U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets Nuclear Regulatory Commission, Office of International Programs – administers regulations related to nuclear materials Nuclear Regulatory Commission, Office of International Programs – administers regulations related to nuclear materials

5. 4/20/2007Office of Research Services5 Export Controls – Other Agencies and Departments DEA – controlled substances and chemicals DEA – controlled substances and chemicals EPA - waste EPA - waste FDA – drugs and medical devices FDA – drugs and medical devices Energy – nuclear and fossil fuels Energy – nuclear and fossil fuels Interior - wildlife Interior - wildlife Defense – defense technologies Defense – defense technologies

6. 4/20/2007Office of Research Services6 Ancient – blockades- surrounding the enemy; prevent acquisition of aid, materials, support, and necessities to sustain the enemy Ancient – blockades- surrounding the enemy; prevent acquisition of aid, materials, support, and necessities to sustain the enemy American – Revolution; 1775 American – Revolution; 1775 Modern – WWI and WWII Modern – WWI and WWII Today - Prevent acquisition of WMD; curtail and prevent export of technologies potentially useful to military adversaries and terrorists Today - Prevent acquisition of WMD; curtail and prevent export of technologies potentially useful to military adversaries and terrorists Export Controls – History

7. 4/20/2007Office of Research Services7 Export Controls – Why Do They Matter War? Military Technology? Manufacturer? War? Military Technology? Manufacturer? Significant developments in technology occur everyday in Universities Significant developments in technology occur everyday in Universities Technologies increasingly may have dual uses – example - chemicals and pesticides Technologies increasingly may have dual uses – example - chemicals and pesticides Where is access to technology easier and more open– through corporations, through military, or through universities? Where is access to technology easier and more open– through corporations, through military, or through universities?

8. 4/20/2007Office of Research Services8 Export Controls – Why Do They Matter (2) Black market Black market WMD Programs – university trained scientists and engineers WMD Programs – university trained scientists and engineers Post 9/11 World Post 9/11 World

9. 4/20/2007Office of Research Services9 Export Controls – Why Do They Matter (3) Regulatory Environment Regulatory Environment Federal funding Federal funding Health Care and Medical Centers Health Care and Medical Centers Clinical research Clinical research Bayh-Dole Bayh-Dole Grant management Grant management Cutting edge research and technologies of concern Cutting edge research and technologies of concern Globalization of research Globalization of research Balance of open, free society with technology access and proliferation Balance of open, free society with technology access and proliferation

10. 4/20/2007Office of Research Services10 Export Controls – Why Do They Matter (4) – Advanced technologies which are increasingly developed at Universities subject of export controls – Export Controls applicable to research fields (not traditionally associated with the “military”) 1)life sciences (biological agents and toxins) 2)Materials science and engineering 3)Computer science (encryption technology) – Increased “globalization” of University Research – University Research dependency on Federal funding with increased compliance requirements

11. 4/20/2007Office of Research Services11 Export Controls – What Matters Technologies Technologies People People Countries Countries Publication – freedom to publish Publication – freedom to publish Our own campus and laboratories Our own campus and laboratories *** Law Changes and Evolves – example 20 years ago versus now *** Law Changes and Evolves – example 20 years ago versus now

12. 4/20/2007Office of Research Services12 Export Controls – U.S. Department of Commerce Enforced by the Department of Commerce through its Export Administration Regulations (EAR). List of controlled technologies is found in 15 CFR 774, Supplement I, and referred to as the Commodity Control List (CCL). Technologies with both commercial and military applications (chemicals, satellites, software, etc.) Enforced by the Department of Commerce through its Export Administration Regulations (EAR). List of controlled technologies is found in 15 CFR 774, Supplement I, and referred to as the Commodity Control List (CCL). Technologies with both commercial and military applications (chemicals, satellites, software, etc.)

13. 4/20/2007Office of Research Services13 Export Controls – U.S. State Department ITAR: Enforced by the Department of State under the International Traffic in Arms Regulations (ITAR). For a list of controlled technologies see 22 CFR 121.1. The controlled technologies are defense articles and related data and listed as the Munitions Control List (MCL). Examples would be explosives, rocket systems, etc. ITAR: Enforced by the Department of State under the International Traffic in Arms Regulations (ITAR). For a list of controlled technologies see 22 CFR 121.1. The controlled technologies are defense articles and related data and listed as the Munitions Control List (MCL). Examples would be explosives, rocket systems, etc.

14. 4/20/2007Office of Research Services14 Export Controls – Treasury Department U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets U.S. Treasury, Office of Foreign Assets Control (OFAC) – Administers and enforces economic and trade sanctions and the Specially Designated Nationals (SDN) and Blocked Persons List, including transactions and transfers of assets List of countries changes – examples – Burma, Cuba, Iran, Iraq, North Korea, Sudan, Zimbabwe List of countries changes – examples – Burma, Cuba, Iran, Iraq, North Korea, Sudan, Zimbabwe

15. 4/20/2007Office of Research Services15 Export Controls - Related Laws - USA Patriot Act of 2001 - Public Health Security and Bioterrorism Preparedness and Response Act of 2002 Restrictions on possession, use and access to biological agents, toxins and delivery systems Restrictions on possession, use and access to biological agents, toxins and delivery systems Persons defined as “restricted” cannot work with covered materials. Information on these matters and how researchers at Penn need to comply is available from Penn’s Office of Environmental Health & Radiation Safety (EHRS) Persons defined as “restricted” cannot work with covered materials. Information on these matters and how researchers at Penn need to comply is available from Penn’s Office of Environmental Health & Radiation Safety (EHRS)

16. 4/20/2007Office of Research Services16 Export Controls – So What? Foreign researchers and students in the U.S. (including at Penn!) or anyone outside the U.S. who participates in such research The sharing of research results with persons who are not U.S. citizens or permanent residents “Export” is defined very broadly as any oral, written, electronic or visual disclosure, shipment, transfer or transmission of a commodity, technology or software/codes. Note: Server access could be an export! How do these laws impact research at Penn? Export Control Laws are laws which prohibit the unlicensed “export” of certain controlled technologies for reasons related to national security, treaty compliance, and trade agreement. If Penn research involves these controlled technologies, Penn may be required to get U.S. government approvals before allowing:

17. 4/20/2007Office of Research Services17 Export Control Laws and Research at Penn Export Controls present a challenge to the Penn research community Export Controls present a challenge to the Penn research community Export Controls are the law of the land Export Controls are the law of the land Failure to comply carries heavy fines and possible imprisonment Failure to comply carries heavy fines and possible imprisonment Compliance is not easy because export controls are complicated and confusing Compliance is not easy because export controls are complicated and confusing

18. 4/20/2007Office of Research Services18 Export Control Laws and Research at Penn General Rule: Penn, its faculty, and employees may not export to some entities certain materials and information without a license from the U.S. Government, unless an exception applies Fortunately, the majority of research at Penn will be covered under an exception to the ECL requirements. What are the exceptions?

19. 4/20/2007Office of Research Services19 Export Control Laws and Research at Penn : EXCEPTIONS TO Export Controls: PUBLIC DOMAIN: publicly available information that : is already published or will be published results from “fundamental research” is educational in nature (instructional courses and labs) included in certain patent applications FUNDAMENTAL RESEARCH: exception that will cover most research at Penn. Basic or applied research in science or engineering at an accredited institution of higher learning in the U.S. resulting information is ordinarily published and shared broadly in the scientific community

20. 4/20/2007Office of Research Services20 Export Control Laws and Research at Penn BUT, University research will not qualify as fundamental research if the university accepts any restrictions on publication of the information resulting from the research, other than: 1. limited prepublication reviews by research sponsors to prevent inadvertent divulging of proprietary information provided to the researcher by the sponsor 2. limited review to ensure publication will not compromise patent rights of the sponsor

21. 4/20/2007Office of Research Services21 Contracts and Grants Impacted by Export Controls – – Important Federal funding opportunities (Homeland Security, Cybersecurity) directly linked to Export Controls – – Terms and conditions restricting access by foreign nationals or removing research from fundamental research exemption – – Contract requirements form Corporate Sponsors on Export Controls – – Tech Transfer Issues: disclosure/licensing of technologies to foreign nationals and material transfer agreements Export Control Laws and Research at Penn

22. 4/20/2007Office of Research Services22 Export Control Laws and Research at Penn Summary: Summary: – Review of what are the issues – ORS Web site – Call us Don Deyo – (215) 573-9970 Don Deyo – (215) 573-9970 Cliff Weber – (215) 898-9984 Cliff Weber – (215) 898-9984