INSTITUTIONAL COMPLIANCE WITH EXPORT CONTROL

LAWS

Andrew KarbergDirector of Institutional Compliance

akarberg@umassd.edu (508) 910-9880

Overview

Purpose of Export Controls Definitions and Regulations Applicability of Export Controls High-Risk Disciplines Exclusions & Exceptions Export Control Compliance at UMD

University Mission & Export Controls

It is the mission and policy of UMD to conduct instruction & research openly and without prohibitions on the dissemination of learning or research activities.

Purpose of Export Controls

US laws that regulate the distribution of strategic technology, services and information to restricted persons and foreign countries for foreign policy and national security reasons.

Prevent terrorism. Restrict access of certain goods and technology

for military and economic purposes. Export control laws apply to all activities –

not just sponsored research projects.

BEHIND BARS

A federal jury found University of Tennessee professor emeritus J. Reece Roth guilty of 18 charges involving the Arms Export Control Act.

Roth repeatedly allowed two foreign national graduate students access to information on a military project and took data about it to China in May 2006.

On July 1, 2009 a federal judge ordered the retired University of Tennessee professor to serve four years behind bars for his handling of restricted defense technology secrets.

On appeal Roth’s conviction was upheld. He is in federal prison.

Export Control Violations Subject to Severe Penalties

Against Institutions and Individuals

Penalties for ITAR Violations: Criminal (Entities): Up to $1M Criminal (Individuals): Up to $1M / 10 years

prison Civil Fines: Up to $500K and Forfeitures

Penalties for EAR Violations: Criminal (Entities): Up to $1M Criminal (Individuals): Up to $1M / 20 years

prison Civil Fines: $250K

Severe Export Control Violation Penalties (cont.)

Penalties for OFAC violations: Criminal (Entities): Up to $1M Criminal (Individuals): Up to $1M / 20 years

prison Civil Fines: $250K per violation

Institution also subject to administrative penalties: Termination of export privileges (EAR and ITAR);

and/or Suspension and/or debarment from government

contracting (EAR and ITAR)

U.S. Export Controls — Cover Any Item in U.S. Trade

— U.S.-Origin Items Wherever Located(Jurisdiction Follows the Item or Technology Worldwide)

— Excludes Technology in the Public Domain

Exports of Most High-Technology and Military Items as well as Associated Technology Require U.S. Export Authorization (Either a License or an Applicable Exemption)

OFAC – Treasury

U.S. Export Controls and Trade Sanctions

Overview

Export is broadly defined:

shipment of a controlled item or good; transmission (electronic or digital) of a

controlled item or information related to a controlled item;

transfer, release or disclosure (including oral, verbal, or visual) of any controlled item, technology, software or technical data, or service either in U.S. or abroad;

use or application of controlled technology on behalf of, or for the benefit of, any restricted person or entity, either in U.S. or abroad.

U.S. export controls cover transfers of goods and technology overseas (inherently intuitive)

But controls also apply to transfers within the U.S. (the transfer outside the U.S. is deemed to apply when a foreign national receives the information in the U.S.)

— Applies to technology transfers under the EAR and the provision of ITAR technical data and defense services

— Unless the fundamental research exemption applies, a university’s transfer of controlled technology to a foreign national in the U.S. may be controlled and/or prohibited

Visa status important— Permanent resident (“green card holder”) has same right to

controlled information as U.S. citizen (no license required)

— Non-immigrant visa holders must satisfy export controls (license may be required)

U.S. Export Controls and Trade Sanctions

“Deemed” Exports

State Department – International Traffic in Arms Regulations (ITAR) Applies to items, articles, services, and data inherently military in nature. Items listed on United States Munitions List (USML) – 21 categories. Includes most space-related technology & research.

Commerce Department – Export Administration Regulations (EAR) Applies to Dual-Use goods, technologies, chemicals, biological agents,

and software. Items listed on the Commerce Control List (CCL) – 10 categories & catch-

all.

Treasury - Office of Foreign Assets Control (OFAC) Trade sanctions, embargoes, restrictions on certain end-users, terrorism,

anti-narcotics.

Others: Nuclear Regulatory Commission; Department of Defense; Department of Homeland Security; Department of Justice.

Export-Controlled Items & Jurisdiction

Categories – ITAR (military)

I - Firearms, Close Assault Weapons and Combat Shotguns

II- Guns and Armament III- Ammunition/Ordnance IV- Launch Vehicles, Guided Missiles, Ballistic Missiles,

Rockets, Torpedoes, Bombs and Mines V- Explosives and Energetic Materials, Propellants,

Incendiary Agents and Their Constituents VI- Vessels of War and Special Naval Equipment. VII- Tanks and Military Vehicles VIII-Aircraft and Associated Equipment IX- Military Training Equipment X- Protective Personnel Equipment

Categories – ITAR (military)

XI- Military Electronics XII- Fire Control, Range Finder, Optical and Guidance and

Control Equipment XIII- Auxiliary Military Equipment XIV-Toxicological Agents, Including Chemical Agents, Biological

Agents, and Associated Equipment XV- Spacecraft Systems and Associated Equipment XVI- Nuclear Weapons, Design and Testing Related Items XVII- Classified Articles, Technical Data and Defense

Services Not Otherwise Enumerated XVIII-Directed Energy Weapons XIX- Reserved XX- Submersible Vessels, Oceanographic and Associated

Equipment XXI- Miscellaneous Articles

Categories – EAR (Dual Use)

0-Nuclear Materials, Facilities & Equipment (and Miscellaneous Items)

1-Materials, Chemicals, Microorganisms, and Toxins 2-Materials Processing 3-Electronics Design, Development and Production 4-Computers 5-Telecommunications and Information Security 6-Sensors and Lasers 7-Navigation and Avionics 8-Marine 9-Propulsion Systems, Space Vehicles and Related

Equipment

Sanctions & Embargoes

Focus on end-user or country rather than technology OFAC administers (Treasury Dept.)

Sanctions on trade with Cuba, Iran, N. Korea, Sudan, Syria;

Limitations on trade with other countries or with certain actors.

OFAC prohibits payments to nationals, sanctioned countries, and to terrorist-supporting entities.

Separate prohibitions under the ITAR and EAR: ITAR proscribed list/sanctions (e.g. Syria, Lebanon or

requirement for presidential waiver for China); EAR restricts exchanges with some entities and

universities in India, Israel, Russia, etc. because of proliferation concerns.

High-Risk Disciplines

Engineering Physics Computer Science Biomedical Research with Lasers Research with Encrypted Software Research with Controlled

Chemicals, Biological Agents, and Toxins

Marine Sciences

AT UMD: Submersible Underwater Vehicles Body Armor Sonar Bioacoustics Defense Services Telecommunications Supercomputers Select Agents & Toxins

Grants & Contracts Always start at: Basic and Fundamental Research Negotiate out restrictions

Watch for personnel restrictions Publication / Dissemination restrictions

Purchases / Transport / Disclosure of Export Controlled Item Deemed Exports & Graduate Students Visiting Scholars

Export of research products

“Deemed Exports” requirements for use of equipment Access to research, technologies, & data

TRAVEL: Temporary transfer of controlled item abroad— Carrying scientific equipment to certain destinations for research may require

authorization (e.g., Iran, Cuba, Syria, etc.)

— Should know ECCN – EAR restrictions technology & country specific

Application to University

Visiting Scholars

Corporate and government grants may limit access by foreign nationals

— Proprietary restrictions or restrictions on publication by corporate grants may invalidate fundamental research

— Could trigger licensing requirements for certain foreign nationals

Conferences— Restrictions on participants, inability to co-sponsor

with certain countries or groups (e.g., restrictions on co-sponsoring conference with Iranian government)

Application to University

Planning & Coordination

Export Authorities Expect All Involved (Including University Administration and PI’s) to Understand Export Control Requirements and Take Responsibility for Compliance

Identify early – know players, high risk areas, & ask questions.

Early Contacts to Compliance Officials When in doubt call and ask

Actions of Individuals Can Bind University

ITAR Exemptions & EAR Exceptions

ITAR ExemptionsITAR Exemptions Public Domain Technical Data General Exemptions

EAR ExceptionsEAR Exceptions Public Domain Fundamental Research Government-Funded Research

NSDD-189 - Fundamental

Research "'Fundamental research' means basic and applied

research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community. . . (NSDD-189)

..at accredited institutions of higher learning in the U.S.

..no restrictions on publication of research results ..no access or dissemination controls on the results of

the research (normally seen as restrictions/approvals of foreign nationals working on the project)

Export Licenses

Required prior to exporting or providing restricted persons access to controlled technologies or materials. Export controls are increasingly: Used as anti-terrorism tools Focused on universities Focused on life sciences and biological

materials

What to Look For...

Any restrictions on publication, disclosure, dissemination, personnel, or participation by the sponsor.

Mention of “export control,” “ITAR,” “EAR,” “ECCN,” “Defense Service,” by the sponsor.

Physical exports. Military or Dual Use Technologies. Participation of Restricted Persons. High Risk Disciplines. Visiting Scholars. Presentation/discussion of previously unpublished research at

conferences or meetings where foreign national scholars may be in attendance

Research collaborations with foreign nationals and technical exchange programs

Transfers of research equipment abroad Visits to your lab by foreign national scholars

UMD Export Controls:Records Retention

Retain export-control records for 5 years from the authorization’s expiration date or exemption date.

INSTITUTIONAL COMPLIANCE WITH EXPORT CONTROL

LAWS

Andrew KarbergDirector of Institutional Compliance

akarberg@umassd.edu (508) 910-9880