DON’T LET THIS HAPPEN TO YOU!!!University Professor Sentenced to FEDERAL Prison

Professor John Reece Roth: formerly of theUniversity of Tennessee

EXPORT CONTROL &ITAR

International Traffic in Arms Regulations

Dr. Carla Raineri PadillaFayetteville State University

Fayetteville, N.C.

Agencies Involved:

Dept. of State (ITAR)

Dept. of Commerce: Bureau of Industry and Security-BIS (Export Control)

Dept. of Treasury: Office of Foreign Assets Control OFAC economic & trade sanctions against targeted

1. Foreign Governments2. Individuals 3. Practices (i.e. illegal embargoes)

Other Agencies Involved:

Dept. of EnergyNuclear Regulatory CommissionDept. of Commerce-Patent & Trade OfficeDept. of InteriorFood & Drug AdministrationDept. of Commerce- Bureau of CensusDHS- Border & Transportation SecurityDHS- US Customs Service

Why are Exports Controlled?

National Security Foreign Policy

Anti-Terrorism Crime ControlRegional Stability

Non-proliferationNuclear WeaponsChemical/Biological WeaponsMissiles/Rocket Systems & UAV

“Subject to the EAR” 15 CFR §734.2(a)

• Items and activities under regulatory jurisdiction of the EAR

• Items on the Commerce Control List (CCL) • Some items located outside of the United States (depends on the % US items and the

country its going to)

“Subject to the EAR” cont.

• US Persons and Foreign Persons(ANY Person in the U.S. is a U. S. Person!!!)

• ALL Items in the United States except:Publicly available technology and software

(Excluding- Encryption)

EXPORT

REEXPORT (RETRANSFER):

Shipment or transmission of items subject to the EAR from one foreign country to another

ITEM:1. Commodity2. Software3. Technology

(IP)

“Knowledge”

Includes:• Positive knowledge that a circumstance exists

or is substantially certain to occur• An awareness of a high probability of its

existence or future occurrence

KNOW = reason to know = reason to believe

3 Questions You Must Ask

1. What is the item/technology?2. Where or to whom is it going?3. What is the end use?

Dept of Commerce: Office of Export Enforcement

Export enforcement- task is to prevent the export of U.S. goods and technology that may be used by rogue states or terrorists to make chemical, biological or nuclear weapons

Dual–Use Commodities

Dual-use

Telecom Relay Device Triggered Spark Gap

Civilian use- office equipmentMilitary use- IED triggers

Civilian use- hospital equipmentMilitary use- detonator for nuclear bomb

“FRE”- Fundamental Research ExclusionNSDD 189

Basic and applied research in science & engineering, the results of which ordinarily are published & shared broadly within the scientific community, as distinguished from proprietary research & from industrial development, design, production, & product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.

U Research is NOT “FRE” if:

1. Publication restrictions2. Side-deals, such as NDA’s3. Sponsor approval is required prior to

publication4. Security Clearance Required

U Research is NOT “FRE” if:

5. Government Contract involves ITAR6. Transfer of Defense Services7. “Use” of Controlled Equipment by a foreign

national-May require a license, even if the research is otherwise “FRE”

8. Encryption Technology

NOTE: Include the price of a CCL export license if you are writing a grant that requires the tech be shared with foreign nationals or occurs in a foreign country

U of Massachusetts at Lowell: “Use” of Controlled Equipment in

Fundamental Research

• BIS charged U Mass with violations of the Export Control Act for the export of EAR 99, atmospheric testing device.

• Device was used by the space and Upper Atmospheric Research Commission in Pakistan for Fundamental Research

• Charged May 2013- currently in litigation

Release of TechnologyRelease of technology can occur through:

1. Visual inspection2. Oral exchange3. Application of Knowledge

Deemed Exports

Deemed Export release of technology or software source code to a foreign national in the United States.

Considered an export to the home country of the foreign national

Rule does not apply to:– Permanent resident aliens– Protected individuals

Deemed Export Rule

“Deemed Export Rule”: The obligation to get a license before releasing controlled technology to a foreign person

Release of controlled technology to foreign persons in the U.S. are “deemed” to be an export to the person’s country or countries of nationality.

Deemed Exports Currently Targeted:

• Biotechnology• Pharmaceuticals• Nanotechnology• Quantum Computing• Advanced Materials• Communication & Encryption Technology• Weapons Systems yet Unclassified

ITARUS Munitions List

1- Firearms, Close Assault Weapons and Combat Shotguns2- Guns and Armament3- Ammunition/Ordnance4- Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines5- Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents

6- Surface Vessels if War and Special Naval Equipment7- Ground Vehicles8- Aircraft and Related Articles9- Military Training Equipment and Training10- Protective Personnel Equipment and Shelters

USML- cont.

11- Military Electronics12- Fire Control, Range Finder, Optical and Guidance Control Equipment13- Materials and Miscellaneous Articles14- Toxicological Agents, Including Chemical Agents, Biological Agents and Associated Equipment15- Spacecraft Systems and Associated Equipment

16- Nuclear Weapons, Design and Testing Related Items17- Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated18- Directed Energy Weapons19- Gas Turbine Engines and Associated Equipment20- Submersible Vessels and Related Articles

FSO

Facility Security Officer

US DoD: Defense Security Service

http://www.cdse.edu/resources/resources-fso.html

SCIF

Sensitive Compartment Information Facility

Must be US Government accredited

Minimum Requirements defined in “Community Directive (ICD) 705/IC Technical Specification”http://www.ncix.gov/publications/policy/docs/ICD_705-Sensitive_Compartmented_Information_Facilities.pdf

http://www.fas.org/irp/dni/icd/ics-705-ts.pdf

DoD and ITARS

GrantsContractsSubcontract-

watch flow-down requirements

If you do get a Sensitive Grant

1. FSO2. SCIF3. DO NOT have foreign nationals in the lab4. Check security clearance requirements for

your personnel5. Do not take any technology outside of the

country6. Check with your Export Control Officer

DON’T LET THIS HAPPEN TO YOU!!!University Professor Sentenced to FEDERAL Prison

Professor John Reece Roth

University of Tennessee Sentence to 4 years in federal prison for Violations of Export Control Laws

How did the Plasma Guidance System he developed end up in Chinese Drones?

• Roth took reports and related studies in his laptop to China in 2006 while attending conferences

• Roth had two foreign research assistants, 1 from Iran and 1 from China, working on secure research projects- He had been told by U. Export Control Officer they could not be in the lab.

DON’T LET THIS HAPPEN TO YOU!!!University Professor Sentence to FEDERAL Prison

Dr. Thomas Campbell Butler Sparked Bioterrorism Scare• 30 vials of Yersinia pestis

went missing from his lab.• Causal organism of Bubonic

Plague• He had illegally exported

them to U of Tanzania for research and lied about the export

• Convicted on 47 countsFormerly:Chief of Infectious Disease

Texas Tech University

Other Universities

2009 Georgia Institute of Technology’s restricted access course on US Weapons Tech was accidentally uploaded to the Web and available for view for 15 days• Viewed by individuals in 36 countries,

including China and Iran

Theft of Trade Secrets

U of Buffalo’s Technology Incubator- Amherst

Yi Liu- PhD in Mechanical Engineering24 Oct 2013 – 7 count indictment for theft of trade secretsMaximum possible penalty 60 years & $3,500,000 fine

How to get Around Problems:

• For subawards/subcontracts- check you flow down

• Do not accept awards with publication restrictions

If you want to get a sensitive grant of contract but it is outside of normal University Procedures

Use your universities Research Corporation 501(c)(3)

1. Voluntary Compliance Programs2. If you want to use a foreign national in export controlled work (not ITAR) get a license BISNote: Generally not granted for individuals from

ChinaSyriaNorth KoreaNorth SudanIran

How to make BIS happy

Penalties

Export Control ViolationsUniversity:

up to $1,000,000or 5X the value of

the violationIndividual:

$250,000up to 10 years or both

Revocation of licenses

ITAR ViolationsUniversity: up to $1,000,000

Individual:$250,000

up to 10 years or both

Revocation of licenses

Methods Used to Target Technology

• Hacking• Unsolicited emails• Compromise of laptop

while traveling overseas• Downloading information

from your network• Visiting Scientific and

Research Delegations• Attending/Hosting

Conferences

• Front Companies• Relocating R & D

facilities overseas• Circumventing Export

Control Laws• Liaisons with Universities

that have ties to Defense Contractors

• Recruiting by Foreign Intelligence Services

Questions

Carla Raineri Padillacpadilla@uncfsu.edu

910.672.1569Fayetteville State University

1200 Murchison RoadFayetteville, NC 28301

Handy Dandy Web Addresses

State Department Compliance Program Guidelines: http://www.pmddtc.state.gov/compliance/documents/compliance_programs.pdf