Transcript Slide 1

FDS
Export Controls:
Overview and Update
Lorraine A. McConnell
November 14, 2006
Outline
• Introduction, Overview and Update
• Key Issues for Universities
• Determining the Need for a License
 Practical Exercises
• Export Control Assistance
• Questions and Answers
Introduction
• Except for certain, limited types of research
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university researchers and the academic
community have not traditionally been impacted
by export control regulations. “Fundamental
research” has been used to exempt most
university activities.
In the post 9/11 world, control regulations impact
a wider range of researchers and research
activities.
Overview: Key Export Control Agencies
Three U.S. Export Control and Licensing Programs:
1)
U.S. Department of Commerce (Bureau of Industry and Security
{BIS}) controls dual-use items (goods and technology with both
civilian and military uses).
Export Administration Regulations (EAR) – Commerce Control List
2)
U.S. Department of State (Office of Defense Trade Controls)
controls defense articles, defense services, and related technical
data (including most space related articles).
International Traffic in Arms Regulations (ITAR) – US Munitions List
3) U.S. Department of the Treasury oversees U.S. trade embargoes
(Office of Foreign Assets Control) and enforces all three programs
at U.S. borders (Customs Service)
List of specifically designated nations, nationals, and individuals
Overview: Purpose of Export Regulations
• Prevent terrorism
• Prevent proliferation of weapons of
mass destruction (biological, chemical
and nuclear)
• Assist in Compliance with US Trade
agreements and sanctions
• Restrict exports of goods and
technology that might aid our
adversaries
Overview: Export Controls Cover
• ANY shipment, transfer or transmission
out of the United States by any means
(carried on your person or in luggage):
 Goods (testing kits, equipment, hardware
and materials)
 Technology (Technical information and data)
 Software/codes (commercial or custom)
 Deemed Export (Disclosure of specific
information and specific types of services to
foreign nationals inside the U.S.
 U.S. items wherever located, even
internationally
Overview: Export illustrations
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An actual shipment (or transmission) of items subject to the EAR or ITAR out of the
U.S.
 Includes the following biologicals: viruses, bacteria, toxins, sub-units of toxins, plant
pathogens, genetic elements, (be careful) or pathogens, select agents, genetic
elements of select agents, biosafety cabinets, fermenters.
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Disclosing (including oral or visual) “technical data” or “technology” (including
software source code) to a “foreign person”, whether in the U.S. (deemed export) or
abroad.
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Performing technical assistance, training, or other “defense services” for, or on
behalf of, a “foreign person” (including foreign corporations) whether in the U.S.
(deemed export) or abroad.
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Re-exporting from foreign countries U.S. origin goods, technical data, goods
incorporating U.S. components, goods manufactured from U.S. technology,
“technical data”, or software.
Overview: Consequences of illegal Export
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EAR
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OFAC
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ITAR
 Criminal: $50K to $1 million or 5 times value of export,
whichever is greater, per violation, 10 years imprisonment
 Civil: revocation of exporting privilege, fines $10K-$120K per
violation
 Criminal: up to $1 million per violation and 10 years
imprisonment
 Civil: $12 K to $55 K per violation
 Criminal: Up to $1 million per violation and 10 years
imprisonment
 Civil: seizure and forfeiture of article, revocation of exporting
privilege, up to $500,000 fine per violation
• Real life example
 Texas Tech University – Microbiologist receives 2 yr
prison sentence and fines of $58,375
Overview:
Basic Regulations EAR
• Export Administration Regulations
(EAR)
(15 CFR Parts 730-774)
-The Commerce Control List (CCL) contains
commodities, technology, and software subject
to the EAR; identified by an Export
Classification Control Number (ECCN)
- Licensing handled by Bureau of Industry and
Security (BIS), formerly BXA
- The inherent capabilities and design, not the
end use, determines whether the item falls
under the ITAR or the EAR
Overview: Basic Regulations ITAR
• International Traffic in Arms Regulations
(ITAR) – 22 CFR Parts 120 – 130)
 U.S. Munitions List (USML) enumerates
the defense articles and services
(furnishing technical assistance includes design, engineering and use of
defense articles) which are controlled
 Based primarily on whether an article or
service is deemed to be inherently military
in character
 Licensing handled by the Directorate of
Defense Trade Controls (DDTC)
Overview:
Basic Regulations OFAC
Department of Treasury Office of Foreign Asset
Control
(OFAC) – Economic sanctions focus on enduser or country and may limit transfer of
technologies/assistance to OFAC’s list of
embargoed countries
• In certain cases, OFAC regulations “trump”
other government agencies such as the BIS (for
example, shipping items to Iran)
• OFAC has a “Specially Designated Nationals
and Blocked Persons List”
• Prohibits payments or providing “value” to
nationals of sanctioned countries and certain
entities
Key Issues For Universities
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National Security vs. Academic Freedom
Exemptions & Exclusions
Fundamental Research
Non-Fundamental Research Concerns
Employment Exemption
Employment Exclusion
Education Exclusion
Public Domain Exclusion
Troublesome Clauses
Applications to Research
University/PI Responsibilities
Key Issues:
National Security vs.
Academic Freedom
• Finding the appropriate balance between
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national security and traditional
practices that support public access to
all University activities.
Researchers need to be aware that these
laws may apply to research whether
sponsored or not
Important to understand the extent to
which the regulations do NOT affect
normal university activities
Key Issues: Exemptions and Exclusions
• Fundamental Research Exemption
(ITAR, EAR)
 Deemed Export
• Employment Exemption (ITAR only)
• Education Exclusion (ITAR, EAR)
• Public Domain Exclusion
But what about the
Fundamental
Research
Exemption?
Key Issues:
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Fundamental Research Exemption
Generally permits US universities to allow
foreign members of their communities (e.g.
students, faculty and visitors) to participate in
research involving export-controlled
information on campuses in the U.S. without
obtaining a deemed export license.
Does NOT permit the transfer of exportcontrolled materials or items abroad, even to
research collaborators.
University based research is not considered
“fundamental research” if the university or its
researchers accept restrictions on the
publication of the results of the project.
Key Issues:
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Deemed Export
The EAR defines a deemed export as the
release of technology or source code subject to
the EAR to a foreign national (no green card) in
the U.S.
Such release is “deemed” to be an export to the
home country of the foreign national.
Situations that can involve release of U.S.
technology or software include:
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Tours of laboratories
Foreign students or professors conducting research
Hosting foreign scientists
Emails, visual inspection, oral exchanges
Unless the fundamental research exemption
applies, a university’s transfer of controlled
technology to a non-permanent resident foreign
national may be controlled and/or prohibited
Key Issues: Employment Exemption
• ITAR – Bona Fide Employee Exemption
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(ITAR125.4(10)
Disclosures of unclassified technical
data in the U.S. by U.S. institutions of
higher learning to foreign persons who
are their bona fide and full time regular
employees
Key Issues:
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Employment Exemption (cont.)
Applies only if the employee’s permanent abode
throughout the period of employment is in the
United States
Applies only if the employee is NOT a national
of a country to which exports are prohibited
(section 126.1 ITAR)
Applies only if the institution informs the
individual in writing that the technical data may
not be transferred to other foreign persons
without the prior written approval of the
Directorate of Defense Trade Controls.
The Bona Fide employee portion typically
applies to full time regular employees which
does not include student and may not include
postdoctoral researcher (depending on their
funding source)
Key Issues: Education Exclusion
• Applies to both U.S. and abroad
locations:
 Teaching foreign nationals general
science, engineering and math commonly
taught at the university
 Conveying to foreign nationals
information through listed courses in
course catalogues and in the associated
teaching laboratories
 The EAR exclusion does NOT apply to
controlled information shared outside the
classroom or teaching lab of an academic
institution
Key Issues: Public Domain Exclusion
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Public Domain (ITAR) and publicly available
(EAR)
Includes information that is published and
generally available to the public:
 Through sales at bookstands and stores
 Through subscriptions available without
restrictions
 At libraries open or available to the public
 Through patents
 Through unlimited distribution at a conference,
meeting seminar, trade show, generally accessible
to the public in the U.S.
 Includes technology and software that are
educational and released by instruction in catalog
courses and associated labs and Universities
Key Issues: Troublesome Areas
• COGR/AAU reported to the White House
Office of Science and Technology Policy
(OSTP) that “troublesome clauses
restricting publication and participation
by foreign nationals in research awards
continued to be a significant problem for
universities.”
http://www.aau.edu/research/Rpt4.8.04.pdf
Key Issues:
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Troublesome Areas
Corporate contract may limit access by foreign
nationals
 Proprietary restrictions or restrictions on
publication by corporate contract may invalidate
fundamental research
 Includes MTAs, Non-disclosure agreements
 Try to remove restrictive clauses from
agreements!!!!
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Conferences
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Transfer of defense services
 Potential restrictions on participants
 Inability to co-sponsor with certain countries or
groups (e.g., restrictions on co-sponsoring
conference with Iranian government)
 Potential license requirements for work with
foreign nationals
Key Issues:
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Troublesome Areas
Government grants/contracts may limit access
by foreign nationals
 for any foreign nationals working on the project
 determining whether a restriction is a “specific
access and dissemination control” under the ITAR
(which would invalidate the fundamental research
exemption) particularly problematic
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Restrictions on certain foreign nationals Agencies may preclude or limit access by
foreign nationals to research based on the
export control laws
 May require prior approval
 Under ITAR, no license available if a foreign
national is from an embargoed country
Key Issues:
Applications to Research
• Government grants/contracts may limit access by
foreign nationals
 for any foreign nationals working on the project
 determining whether a restriction is a “specific access
and dissemination control” under the ITAR (which would
invalidate the fundamental research exemption)
particularly problematic
• Restrictions on certain foreign nationals - Agencies
may preclude or limit access by foreign nationals to
research based on the export control laws
 May require prior approval
 Under ITAR, no license available if a foreign national is
from an embargoed country
Key Issues:
Applications to Research Shipping
• Shipping equipment, technology,
software, computers, etc.,outside the
U.S. may require a license
Key Issues:
Applications to Research Travel
• Taking equipment, computers, etc., out
of the country may require a license
• The Office of Foreign Asset Controls
(OFAC) has restrictions
• The Departments of Commerce, State
and OFAC have denied entities/persons
lists
Key Issues:
Applications to Research
Equipment Use
• “Use” of controlled equipment by a
foreign national may require a license
even if Fundamental Research
Exemption is applicable.
 The transfer of controlled technology or
source code of a controlled item to a FN
may require a license, NOT the normal
operation or use of the item or piece of
equipment
Key Issues: Applications to Research Software
• Software development
 Software that is provided to the public for
free may not require licenses, but
proprietary software of controlled
technology could require licensing
 Encryption technology could require
licenses or could be prohibited for
transfers to certain foreign
nationals/countries
Key Issues:
University/PI Responsibilities
• Review your research for potential EAR/ITAR issues don’t wait
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until the contract arrives!
Check to see if equipment/supplies to be purchased is
controlled under EAR/ITAR – find the ECCN
If you are planning to hire a foreign national, check the
regulations to see if a license may be required
At the contract stage, check for restrictive clauses that would
eliminate the Fundamental Research exemption
Document exemptions
Records must be kept 5 years (license valid 2 years)
Apply for a license BEFORE project begins--process can take
2-6 months or longer!
Honest errors are acceptable but gross negligence is
punishable
Violations are civil and criminal---Fines and jail time!!!
Determining the Need for a License:
The EAR Process
• Does activity qualify as an Export?
• Is the item subject to EAR?
 Handout #1
Determining the Need for a License:
The EAR Process
• Export Control Decision Tree
 Handout #2
Determining the Need for a License
• STEP 1: PI must classify the type of
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technology or science being developed
on the “Commerce Control List” by
determining the ECCN – Export Control
Classification Number
http://w3.access.gpo.gov/bis/ear/ear_dat
a.html
Determining the Need for a License:
Commerce Control List
• Contains lists of items subject to
licensing authority of BIS
• Each entry is called Export Control
Classification Number (ECCN)
(Five alpha-numeric characters)
Items listed in terms of technical
parameters
Determining the Need for a License:
ECCN BREAKDOWN EXAMPLE: 3D101
• 3 – Category
• D – Product Group
• 1 – Reason for Control
• 0 – Relates to Reasons for Control
• 1 – Used for Numerical Ordering
Determining the Need for a License:
Commerce Control List (CCL) Categories:
0. Nuclear Materials, Facilities & Equipment, and
1.
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6.
7.
8.
9.
Miscellaneous
Materials, Chemicals, Microorganisms & Toxins
Materials Processing (i.e., making plastics, metals)
Electronics Development
Computer (development and programs)
Telecommunications and Information Security
Sensors and Lasers
Navigation and Avionics
Marine
Propulsion Systems, Space Vehicles and Related
Equipment
Determining the Need for a License:
CCL Product Groups
• A = Equipment, Assemblies &
•B=
•C=
•D=
•E=
Components
Production, Test & Inspection
Equipment
Materials (raw)
Software
Technology
Determining the Need for a License:
Reasons for Control
• 001-099 National Security
• 100-199 Missile Technology
• 200-299 Nuclear Proliferation
• 300-399 Chemical & Biological
• 900-999 Foreign Policy
• 980-989 Short Supply / Crime Control
• 990-999 Anti-Terrorism/ United Nations
Determining the Need for a License:
Finding the ECCN
• Review general characteristics
(technical parameters) of items to arrive
at Category and Product Group
• Match characteristics of item with ECCN
and subparagraph
• HINT: Check the CCL alphabetical index
I found the ECCN!
Determining the Need for a License:
GENERAL PROHIBITIONS, PART 736
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STEP 2: Check General Prohibitions
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Prohibit certain exports, re-exports, and other
conduct, without a license, license exception or
determination that no license is required
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General Prohibitions 1-10 apply to items having
a specific ECCN
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General Prohibitions 4-10 apply to items that
are EAR99 (not found on the CCL)
Determining the Need for a License:
GENERAL PROHIBITIONS, PART 736
General Prohibitions 1-3 apply only if your
item is classified under an ECCN:
1.
2.
3.
Export and re-export of controlled items to
listed countries
Re-export and export from abroad of foreignmade items incorporating more than a de
minimis amount of controlled U.S. Content
Re-export and export from abroad of the
foreign produced direct product of U.S.
technology and software
EAR 90-what???
Determining the Need for a License:
GENERAL PROHIBITIONS, PART 736
General prohibitions 4-10 apply if your item is
classified under a specific ECCN or is “EAR
99” (items not found on the CCL- usually no
license required)
4. Engaging in actions prohibited by a denial
order (check denied persons/entities lists)
5. Export or re-export to prohibited end-uses or
end users (e.g., chemical and biological
warfare)
6. Export or re-export to embargoed or special
destinations
7. Support of proliferation activities
Determining the Need for a License:
GENERAL PROHIBITIONS, PART 736
8. In transit shipments and items to be
un-laden from vessels or aircraft
9. Violation of any order, terms, and
conditions
10.Proceeding with transactions with
knowledge that a violation has
occurred or is about to occur
If Prohibitions don’t apply, look for
Exceptions
Determining the Need for a License:
LICENSE OR EXCEPTION UNDER EAR?
• STEP 3:
Try to find the exception!
• Using the CCL check reasons for control: Look at
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the “Reason for Control” section directly under the
category heading and License Requirements.
-- E.g.: Reason for control: NS, MT, AT
Match specific controls to Country Chart column
Look for an “X” in Commerce Country Chart
If an “X” is present, look under the “License
Exceptions” category below the “Control(s)” section
If no license exception available, license must be
obtained (4-6 weeks to process)
Determining the Need for a License:
REASON FOR CONTROL
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AT= Anti-Terrorism
CB= Chemical &
Biological weapons
CC= Crime Control
CW=Chemical
Weapons Convention
EI = Encryption Item
FC=Firearms Control
MT=Missile
Technology
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NP=Nuclear
Proliferation
NS=National Security
RS=Regional Stability
SI=Significant Item
SS=Short Supply
UN=United Nations
XP=Computers
Determining the Need for a License:
COMMON LICENSE EXCEPTIONS
• LVS – Limited Value Shipments
 Pertains to Country Group B
 Identified by “LVS: $(value)” on the CCL
(e.g.: LVS: $5000)
• GBS – Group B Shipments
 Pertains to Country Group B
 Identified by “GBS: Yes” on the CCL
• CIV – Civil End-Users
 Pertains to Country Group D-1
 Identified by “CIV: Yes” on the CCL
 National Security controlled items only
Determining the Need for a License:
COMMON LICENSE EXCEPTIONS
• TSR – Restricted Technology and Software
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Pertains to Country Group B
Identified by “TSR: Yes” on the CCL
National Security Controlled Items only
Written Assurance – Letter can be written
stating software will not be released to
nationals of certain country groups (e.g.
D:1 and E:2)
Determining the Need for a License:
COMMON LICENSE EXCEPTIONS
• TMP -Temporary Exports and Re-exports
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Tools of trade
Replacement parts
Exhibition and demo
Inspection and calibration
Assembly in Mexico
To US subsidiary, affiliate or facility in
Country Group B
 Beta test software
 Return to US within 1 year
Determining the Need for a License:
Deemed Export Exceptions
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CIV: Civil End Use
 Applies to deemed exports for 3E001/3E002
technology
 Requires Foreign National Review (FNR)
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TSR: Technology/Software Under Restriction
 Applies to technology/software under national
security only for country group “B” nationals
 Requires Letter of Assurance
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APP – Computers
 Applies to deemed exports for 4D001/4E001
software and technology. (FNR required)
Determining the Need for a License:
RECAP
STEPS TO TAKE:
• Determine if it is an export and is subject
 Classify the technology or goods involved
(ITAR, EAR, OFAC, other?)
 Determine if license is needed for the
technology/end user/end use
 Determine whether embargoes, prohibited
parties, or destinations are involved
Determining the Need for a License
 Determine if license exemption is
available (public domain, fundamental
research, EAR exemption from CCL, etc.)
 If no exemptions, determine what kind of
license is needed
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Technical Assistance Agreement (ITAR)
DSP-5 (ITAR)
Deemed Export License (EAR)
DOC License (EAR)
Licensing the Technology
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EAR – not too complicated, no fee
 Foreign nationals will require a “Deemed Export
License”
 In certain instances can apply for a license
electronically
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ITAR – very complicated and expensive
 Must register before applying for a license
 DSP-5/TAA required for foreign nationals working
with ITAR export controlled technology
 Technology Control Plan required
 Recommend hiring export control attorney or
consultant
Licensing the Technology
 Apply promptly, licensing can take
months!!
• ITAR (State) requirements available at
http://www.pmdtc.org
• EAR (Commerce) requirements available at
http://www.bis.doc.gov
• OFAC (Treasury) requirements available
http://www.treas.gov/offices/eotffc/ofac/
Confused???
Practical Exercises: #1 Is This an Export?
• You email a software program to a
research collaborator in Zimbabwe?
Practical Exercises: #1 Is This an Export?
• A: Yes
• Note: Zimbabwe is on the list of
sanctioned countries so this is an illegal
export.
Practical Exercises:
#2 Subject to EAR?
• You export U.S. origin technical data to a
manufacturer in Taiwan so they can
manufacture a computer. They wil
export the foreign manufactured
computer, which was produced based
on U.S. origin technical data, to Russia.
If there are no U.S. origin material used
in the manufacture of the computer.
Practical Exercises:
• A: YES
#2 Subject to EAR?
Practical Exercises:
#3 Regulated/License
Required?
• A U.S. Extension Plant Pathologist travels
to Syria for a research field trip. She takes
a GPS device in her baggage in order to
record locations of her plant finds in the
field.
Practical Exercises:
Required?
#3 Regulated/License
Is this an export? YES
Subject to the EAR? YES
Does it have an ECCN #? YES
General Prohibition 4-10 apply? YES #6
General Order No. 2 to 736
General Order No. 2 of May 14, 2004;
Sections5(a)(1) and 5(a)(2)(A) of the Syria
Accountability and Lebanese Sovereignty Act of
2003 (Public Law 108-175, codified as a note to
22 USC 2151) (the SAA), require (1) a
prohibition on the export to Syria of all items on
the Commerce Control List (in 15 CFR Part 774)
(CCL) and (2) a prohibition on the export to Syria
of products of the United States, other than food
and medicine.
Practical Exercises: #3
Regulated/License Required?
Syria is also a sanctioned country for OFAC
and ITAR
You must submit an application for license.
Note: Even though the License Exception for
baggage (740.14) would apply because of
the sanctions against Syria a license
application is required.
If sent to Canada NS doesn’t apply (NLR)
Practical Exercises:
#4 Do You Need a
License?
• You are a U.S. Researcher who
collaborates with a colleague in
Switzerland. You plan on sending isolates
of Francisella tularensis (mutant variants
that you have made) The German
colleague will be testing these mutants out
in her biosensor system to see if they are
detected. You will not need a CDC Form 2
to ship to Switzerland.
Practical Exercises:
License?
• A: YES
#4 Do You Need a
Practical Exercises:
#5 Public Domain
Exemption Apply? / Fundamental Research
Exemption Apply?
• A plant pathologist is working on
genetic control of Puccinia striiformis.
She receives funding from a corporate
sponsor who exercises substantive
prepublication review. This plant
pathologist sends samples of Puccinia
striiformis to Canada for analysis.
Practical Exercises:
#5 Public Domain
Exemption Apply? / Fundamental Research
Exemption Apply?
• Public Domain Exemption applies only
to information not items.
• Fundamental Research Exemption does
not apply because of the sponsor’s prepublication review stipulation.
Need help navigating the Export Control maze???
Export Control Assistance
Send request for Review to:
Lorraine McConnell WSU BSO
Email: [email protected]
PO Box 643140 Pullman, WA 99164-3140
Fax: 509-335-4462
Expected Response Time: 24-72 hours.
Extenuating circumstances may cause delay.
Information to Include in the Request
•
Complete description of item to be shipped,
(e.g. anti-sera is not on the CCL list but
immuno-toxins defined in part as antibodies
designed to target cancer cells are in fact on
the CCL list).
Full name of person the item is being shipped
to.
Address item is being shipped to.
What the end use of the item is.
Whether the item will be shipped on to any
other location or used by others.
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If answer to above is yes: the address and name
of these parties is required.
Questions?