Transcript Export Control Regulations

Export Control Regulations
for Researchers
Why Is Compliance
Important?
 Potential civil and criminal
penalties, for the individual and
the institution
 Loss of export privileges
 Risk to reputation; bad publicity
 Limiting participation of foreign
nationals in University research
is not realistic and contrary to
policy
Three U.S. Export Licensing
Programs
U.S. Department of State (Office of
Defense Trade Controls) controls defense
articles, defense services, and related
technical data, including most spacerelated articles.
U.S. Department of Commerce (Bureau of
Industry and Security) controls “dual-use”
items – goods and technology with both
civilian and military/strategic uses.
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 through U.S.
Customs Service.
Cuba
Law and Regulations
Commerce
Department
State Department
Treasury
Department
Export Administration
Act
Arms Export Control
Act
Trading with the
Enemy Act, Int’l
Emergency Economic
Powers Act, & Others
Export Administration
Regulations (“EAR”)
15 C.F.R. Parts 700799
International Traffic in
Arms Regulations
(“ITAR”)
22 C.F.R. Parts 120130
Iraq Sanctions
Regulations,
Terrorism Sanctions
Regulations, &
Others
31 C.F.R. Parts 500599
Commerce Control List
U.S. Munitions List
List of Specially
Designated Nationals
& Blocked Persons
What Is an Export?
ITAR 120.17, EAR 734.2(b)
 An actual shipment or transmission of items subject to
the EAR or ITAR (commodity, technical data, or
software) out of the United States.
 Releasing (including oral or visual disclosure) “technical
data” or software “source code” to a “foreign person,”
in the United States (“deemed export”).
 Performing technical assistance, training, or other
“defense services” for, or on behalf of, a “foreign
person,” (including foreign corporations) whether in the
United States (“deemed export”) or abroad
 Re-exporting from foreign countries U.S.-origin goods or
technical data, goods incorporating U.S. components,
or goods manufactured from U.S. technology or reexporting U.S.-origin “technical data” or software
Examples of Exports
SHIPPING OUT of US
 Physical shipments or hand
carried items
 Release of technical data or
software in a foreign country
RELEASING INFO in US
 Release of source code to a
foreign national in the US
 Release of technical data to a
foreign national in the US
 Inspections of U.S. equipment and
facilities by a foreign national
U.S. and Foreign Persons
ITAR 120.15 & 16, EAR 772.1
 “U.S. Person” means:
 a “Lawful Permanent Resident (8 USC 1101 (a)(20))
– U.S. Citizen or national
– Legal immigrant with a “green card”
 a “Protected Individual” under the INA (8 USC
1324(b)(3))
– designated an asylee or refugee
– a temporary resident under amnesty provisions
– but does not include Protected Individuals who:
o fail to apply for citizenship within 6 months of
becoming eligible
o have not been naturalized within 2 years after
applying
 any entity incorporated to do business in the United
States
U.S. and Foreign Persons
ITAR 120.15 & 16, EAR 772.1
 “Foreign Person” means everyone else
 includes foreign businesses not incorporated in
the U.S.
 EAR does not use the term “Foreign Person,”
instead refers to “foreign national,” exempting
Protected Individuals (See EAR 734.2(b)(ii))
U.S. Munitions List (USML)
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I - Firearms
II - Artillery Projectors
III - Ammunition
*IV - Launch Vehicles, etc...
*V - Explosives, 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
XI - Military Electronics
XII - Fire Control, Range Finder,
Optical and Guidance and Control
Equipment
 XIII - Auxiliary Military Equipment
 XIV - Toxicological Agents and
Equipment and Radiological
Equipment
 *XV - Spacecraft Systems and
Associated Equipment
 XVI - Nuclear Weapons Design
and Related Equipment
 XVII - Classified Articles, Technical
Data and Defense Services Not
Otherwise Enumerated
 XVIII - Reserved
 XIX - Reserved
 XX - Submersible Vessels,
Oceanographic and Associated
Equipment
 XXI - Miscellaneous Articles
Commerce Control List (CCL)
 Category 0 - Nuclear
Materials, Facilities and
Equipment and Misc.
 Category 1 - Materials,
Chemicals,
Microorganisms and
Toxins
 Category 2 - Materials
Processing
 Category 3 - Electronics
 Category 4 - Computers
 Category 5 Telecommunications and
Information Security
 Category 6 - Lasers and
Sensors
 Category 7 - Navigation
and Avionics
 Category 8 - Marine
 Category 9 - Propulsion
Systems, Space Vehicles
and Related Equipment
Examples of Items Covered by
Category 3 - Electronics
Category
Example
Systems, Equip
& Components
Mass Spectrometers & Pulse Amplifiers
Test, Inspection,
& Prod. Equip.
Equipment for the manufacturing of production
semiconductor devices or material
Materials
Hetero-epitaxial materials consisting of a “substrate”
having stacked epitaxially grown multiple layers of:
silicon, germanium, or compounds of gallium or
indium
Software
Computer-aided design software designed for
semiconductor devices or integrated circuits having
any of the following: design rules or circuit verification
rules, simulation of the physically laid out circuits, or
lithographic processing simulators for design
Technology
Technical data for the development of production of
any of the above items
Example: Shipment of Polygraph
(Basic Steps)
 Step 1 - Classification of item. Start by looking in
the Commerce Control List under the category of
electronics (Category 3) and product group which
covers equipment (Product Group A). Then read
through the list to find whether your item is included
in the list. The ECCN for polygraphs is 3A981.
 Step 2 – License requirements. These list the
reason that the item is controlled. Polygraphs are
controlled for “CC”, or crime control.
Example: Shipment of Polygraph
(Basic Steps)
 Step 3 – Destination Country. Check whether a
license is required for the country.
Example: Shipment of Polygraph
(Basic Steps)
 Step 4 – Screening. Certain individuals and
organizations are prohibited from receiving U.S.
exports.
 Entity List – BIS list of organizations identified as
engaging in activities related to the proliferation
of WMD.
 Specially Designated Nationals and Blocked
Persons List – OFAC list of individuals and
organizations representing restricted countries or
known to be involved in terrorism or narcotics
trafficking.
 Unverified List – BIS list of firms for which it was
unable to complete an end-use check.
Examples of Items Covered by Category 1
Materials, Chem, Microorganisms, & Toxins
Category
Systems, Equip
& Components
Example
Chemical Agents, including tear gas containing 1% or less
of CS or CN, except containers net wt <20gm
Test, Inspection, & Electrolytic cells for fluorine production with a production
Prod. Equip.
capacity >250 g of fluorine per hour
Materials
Chemical precursors for toxic chemical agents (1C350)
(Examples: benzilic acid; sodium bifluoride); human
pathogens, zoonoses, and “toxins” (1C351) (Examples:
Rickettsia rickettsii, Chlamydia psittaci); animal pathogens
(1C352) (Example: goat pox virus); plant pathogens
(1C354) (Example: Puccinia graminis)
Software
“Software” for process control that is specifically
configured to control or initiate “production” of chemicals
controlled by 1C350
Technology
Technical data for the development of production of any of
the above items
Technical Data & Technology
ITAR 120.10, EAR 772.1
 ITAR 120.10 defines “technical data” as
 Information . . . required for the design,
development production, manufacture,
assembly, operation, repair, testing,
maintenance, or modification of defense articles.
 Invention covered by an invention secrecy order
 Software directly related to defense articles
Technical Data & Technology
ITAR 120.10, EAR 772.1
 EAR 772.1 defines “technology” as
 Specific information necessary for the
“development,” “production,” or “use” of a product.
The information takes the form of “technical data” or
“technical assistance.”
 Technical assistance may take forms such as
instruction, skills training, working knowledge, and
consulting services and may involve transfer of
“technical data.”
 “Technical data” may take forms such as blueprints,
plans, diagrams, models, formulae, tables,
engineering designs and specifications, manuals
and instructions written or recorded on other media
or devices such as disk, tape, read-only memories.
What is Not Controlled ?
(The “Safe Harbor”)
Technical Data & Software (ITAR 120.10, EAR 772.1)
What is not defined as export controlled “technical data” or
“software”?
 Publicly available technical data and software
 Published for sale, in libraries open to the public, or
through patents available at any patent office
 General scientific, mathematical, or engineering
principles commonly taught in colleges and universities
 Available through unlimited distribution at a conference,
meeting, seminar, trade show, or exhibition (provided
no previous government or industry restrictions on
distribution applied)
 Arises during or results from fundamental research,
where no restrictions on publication or access accepted
 Non-technical contract or business documents
National Security Decision Directive
NSDD-189
 In September 1985, the Reagan Administration issued
NSDD-189 in which it established the following policies:
 To the maximum extent possible, the products of
fundamental research should remain unrestricted.
 Where the national security requires control, the
mechanism for control of information generated
during Federally-funded fundamental research in
science, technology, and engineering at colleges,
universities, and laboratories is classification.
 No restriction may be placed upon the conduct or
reporting of Federally-funded fundamental research
that has not received national security classification,
except as provided in applicable U.S. statutes.
 President Bush’s National Security Advisor,
Condoleezza Rice, reaffirmed NSDD-189 in November
2001.
National Security Decision Directive
NSDD-189
 NSDD-189 defined “fundamental research” as
 Basic and applied research in science and
engineering, the results of which ordinarily
are published and shared broadly within
the scientific community.
 It is distinguished from research which
results in information which is restricted
for proprietary reasons or pursuant to
specific U.S. Government access and
dissemination controls.
National Security Decision Directive
NSDD-189
 NSDD-189’s definition of “fundamental
research” is reflected throughout the
ITAR and EAR in terms of what
research is subject to export controls.
 Avoiding restrictions on access and
dissemination of research findings in
contracts with the U.S. Government
and industry is a key strategy for
minimizing export control issues in
university and research laboratory
settings.
What is Not Fundamental Research?
 Given this definition of fundamental research, university
research will not qualify as fundamental research if
 The university or research institution accepts any
restrictions on the publication of the information resulting
from the research, other than limited prepublication
reviews by research sponsors to prevent inadvertent
divulging of proprietary information provided to the
research by the sponsor or to ensure that publication will
not compromise patent rights of the sponsor; or
 The research is Federally-funded and specific access and
dissemination controls regarding the resulting information
have been accepted by the university or researcher.
Key EAR Exceptions
 EAR 734.3(b) – “What is not subject to the EAR?”
 Publicly available technology and software, except
software controlled for EI (encryption) under ECCN
5D002 that
– Are already published or will be published – EAR
734.7
– Arise during, or result from, fundamental research –
EAR 734.8
– Are educational – EAR 734.9
– Are included in certain patent applications – EAR
734.10
 See Supplement No. 1 to Part 734 for extensive
explanatory questions and answer regarding what is not
subject to the EAR in the context of university and
research laboratory activities.
Key EAR Exceptions
 EAR 734.11 – “What is government research
covered by contract controls?
 If research is funded by the U.S.
Government, and specific national security
controls are agreed on to protect information
resulting from the research, EAR
734.3(b)(3) will not apply.
Key EAR Exceptions
 Examples of “specific national security controls” include:
 Requirements for prepublication review by the
Government, with right to withhold permission for
publication
 Restrictions on prepublication dissemination of
information to non-U.S. citizens or other categories of
persons
 Restrictions on participation of non-U.S. citizens or
other categories of persons in the research.
 BUT: A general reference to one or more export control
laws or regulations or a general reminder that the
Government retains the right to classify is not a “specific
national security control.” (EAR 734.11)
Key ITAR Exemptions (used in Space
Science Research)
 ITAR 125.4(b)(10) – Exempts from licensing
requirements 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.
 Employee’s permanent abode throughout the
period of employment must be in the U.S.
 Employee must not be a national of a country to
which exports are prohibited pursuant to ITAR
126.1 (e.g., Belarus, Cuba, Iran, Libya, North
Korea, Syria, Vietnam, Burma, China, Haiti, Liberia,
Somalia, and Sudan—list as of 7/2003)
 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 Office of Defense Trade Controls
Key Exception: Publicly Available
Software
 Software (and technical data) is published when it is
available for general distribution either for free or at a
price that does not exceed the cost of reproduction and
distribution.
 Such reproduction and distribution costs may include
variable and fixed allocations of overhead and normal
profit for the reproduction and distribution functions
either in your company or in a third party distribution
system. Such costs may not include recovery for
development, design, or acquisition because the
provider of the software does not receive a fee for the
inherent value of the software.
What is Publicly Available Software?
 If the source code of a software program is
publicly available, then the machine readable
code compiled from the source code is software
that is publicly available.
 Note that encryption software controlled under
ECCN 5D002 for “EI” (Encryption Items)
reasons on the Commerce Control List and
mass market encryption software with
symmetric key length exceeding 64-bits
controlled under ECCN 5D992 remain subject to
the EAR.
Key Exception: EncryptionSoftware
Technology & Software Unrestricted
 Encryption source code controlled under ECCN5D002
that would be considered publicly available, and
corresponding object code resulting from compiling
such source code, may be exported under Exception
TSU (but not knowingly to Cuba, Iran, Iraq, Libya,
N.Korea, Sudan or Syria)
 Provide written notification to Commerce (BIS) of the
Internet location of the source code or a copy of the
source code by the time of export (see 740.13)
 Posting of source code or object code on the Internet
(e.g. FTP or World Wide Web site) where it may be
downloaded by anyone would not establish
‘knowledge’ of a prohibited export or reexport.
What can you take with you overseas?
Exception TMP: “Tools of Trade”
 Usual and reasonable kinds and quantities of tools of trade
(commodities and software) for use by the exporter or
employees of the exporter in a lawful enterprise
 The tools of trade must remain under the effective control of the
exporter or the exporter’s employee (retain physical possession
of the item, locked in hotel safe, or guarded)
 Encryption commodities and software may be pre-loaded on a
laptop, handheld device or other computer or equipment
 All tools of trade may accompany the individual departing from
the US or may be shipped unaccompanied within one month
before the individual’s departure from the US, or at any time
after departure
License Exception TMP
Temporary: “Tools of Trade”
 All commodities and software, if not consumed or
destroyed in the normal course of authorized temporary
use abroad, be returned as soon as practicable but no
later than one year after the date of export
 No tools of the trade may be taken to Cuba or Sudan
 Reference 15 CFR Part 740.9(a)(2)(i) for TMP “Tools of
Trade” License Exception
Take Home Messages
Do’s and Don’ts: General
 Do NOT Ship Any Item Outside the U.S. without first checking the
ITAR and EAR Lists to determine if the item is controlled (This
includes Outgoing MTA’s, Software Licenses, and any Agreement
Deliverables)
 Secure License Approval (through campus contact or UCOP for
ITAR) or verify license exception PRIOR to Shipment for all
controlled items
 Do NOT Accept Publication or Access Controls in research
agreements (regardless of whether federal, state, or private)
 Do NOT create special training or access programs limited to
select foreign companies or foreign nationals without first securing
a government-approved Technical Assistance Agreement
Do’s and Don’ts:
Contract Clauses
 Screen all proposed research contracts from government and
industry for access and dissemination restrictions that might
jeopardize the project’s qualification as “fundamental research.”
 Do NOT Accept clauses, such as:
 DOD Clause 252.204-7000, Disclosure of Information
 FAR Clause 52.227-17, Rights in Data, Special Works
 Airforce Clause 5352.227-9000, Export Controlled Data
Restrictions
 Army Clause 52-04-4401, Foreign Nationals Performing
Under Contract (Feb 2002)
 Questionnaire for Public Trust Positions (SF89P) or
National Agency Check/Name Check Request
 DD2345, Militarily Critical Technical Data Agreement
 Watch out for flow down language!
Do’s and Don’ts:
Confidentiality Clauses
 Review any Confidentiality/Non-Disclosure Agreements to insure that UC
is not assuming the burden of restricting dissemination based on
citizenship status or securing license
 Allow Commercial Contractor to Transfer Export Controlled Data (as long
as it isn’t proprietary), or Proprietary Data that isn’t Export Controlled (See
EAR 734.8(b)(4) and EAR Supplement 1, Section D, Question 2)
 In limited cases, can agree that the individual to receive export controlled
proprietary data will not disclose it to anyone (including other UC
personnel) in most cases, proprietary data from a commercial entity that is
also export controlled cannot be accepted or used in University research.
 Can agree that UC will comply with Export Regulations; can not agree that
data generated by UC in the course of the research is export controlled
Do’s and Don’ts: Citizenship Info
 Do NOT provide citizenship, nationality, or VISA status
information for project staff to others or include such
information in proposals. It is a violation of the INS
regulations, of the Federal Privacy Act, and of the California
Information Practices Act to do so. It is also contrary to
University policy to discriminate on this basis or to select
research project staff on any basis other than merit. See
C&G Memo for guidance:
http://www.ucop.edu/raohome/cgmemos/04-02.html
 Do NOT agree to background checks or other arrangements
where the external sponsor screens, clears, or otherwise
approves project staff. University policy allows for
background screening conducted by the University when
appropriate to the position.
Do’s and Don’ts: Software
 Whenever possible, make University created software,
databases, and other technical data “publicly available”
 Publication in periodicals, books, print, electronic, or other
media available to a community of persons interested in the
subject matter either free or at a price that does not exceed
the cost of reproduction and distribution (See EAR
Supplement 1, Questions A(1) - A(6)
 If the source code of a software program is publicly available,
then the machine readable code compiled from the source
code is software that is publicly available and, therefore, not
subject to the EAR
 The cost of reproduction and distribution may include variable
and fixed allocations of overhead and normal profit for the
reproduction and distribution functions but may not include
recovery for development, design, or acquisition, such that the
provider does not receive a fee for the inherent value of the
software.
Do’s and Don’ts: Software
License
 Do not agree to software license restrictions on
 access to or use of the software by nationals of
certain countries, particularly those from
Country Group D
 restrictions on dissemination of the ‘direct
product’ of the software
 ask the software provider to identify the ECNN
number that controls the software, and
research the applicability of control, given the
possibility that the software provider is being
overly cautious and the software is not, in fact,
controlled
Do’s & Don’ts: EncryptionSoftware
Technology & Software Unrestricted
 Encryption source code controlled under ECCN5D002
that would be considered publicly available, and
corresponding object code resulting from compiling
such source code, may be exported under Exception
TSU (but not knowingly to Cuba, Iran, Iraq, Libya,
N.Korea, Sudan or Syria)
 Provide written notification to Commerce (BIS) of the
Internet location of the source code or a copy of the
source code by the time of export (see 740.13)
 Posting of source code or object code on the Internet
(e.g. FTP or World Wide Web site) where it may be
downloaded by anyone would not establish
‘knowledge’ of a prohibited export or reexport.
Do’s and Don’ts: Embargoes
 Do NOT travel to the Balkans, Burma, Cuba, Iran, Iraq,
Liberia, Libya, North Korea, Sudan,or Syria, for research or
educational activities without first contacting the campus VCResearch to secure a license from the Office of Foreign
Assets Control. These are embargoed countries. A general
license for Cuba may cover you; all other countries require a
specific license.
 Review scope of work and collaborators to identify any
projects that may require travel to embargoed countries. UC
has secured OFAC licenses for research in embargoed
countries. It simply takes a bit of time.
UC Policy References
 C&G Memo 04-02: Provision of Information on Citizenship, Visa
Status, Nationality or Country of Origin: Federal and State Law and
Regulation http://www.ucop.edu/raohome/cgmemos/00-05.html
 C&G Memo 00-05: Unacceptable Controls Based on U.S.
Citizenship Status http://www.ucop.edu/raohome/cgmemos/0005.html
 C&G Memo 90-03: Acceptance of Funds Restricted to U.S. Citizens
http://www.ucop.edu/raohome/cgmemos/90-03.html
 UCOP Website on Export Regulations
http://www.ucop.edu/research/policies/exportcontrols.htm
Is the Item “Export Controlled?”
 EAR List at: http://www.access.gpo.gov/bis/ear/ear_data.html
 ITAR List at: http://www.pmdtc.org/docs/ITAR/22cfr121_Part_121.pdf
 For EAR Items: 1)Check the “reason for control”; 2)Check country chart;
3)Determine if license required in the column for the country where item
to be shipped
 For EAR Item, if no “check” in control column for country, then ship under
NLR (no license required); If item being shipped is not on Commodity
Control List, then ship EAR99 (exempt)
 For ITAR Item, if on list, contact UCOP; license will be required because
there is no EAR equivalent “country chart”
Questions?