Transcript Slide 1

Michigan Technological University
Presented by:
Ramona Englund, FSO
906-487-2654
[email protected]
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Authority, Agencies & Jurisdictions
Army Export Control Act (AECA)
Department of State (ITAR)
Directorate of Defense Trade Controls (DDTC)
Department of Commerce (EAR)
Bureau of Industry & Security (BIS)
Department of the Treasury
Office of Foreign Assets Control (OFAC)
Authorizes the President to
control the export/import of
defense articles & services
Licenses Defense Articles
and Services
Primary Licensing Agency
for Dual-Use Exports
Administers Economic
Sanctions (Embargoes)
Not Sure of the Licensing Jurisdiction?
Request a Commodity Classification from BIS
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Under ITAR §120.17 – an export can occur in two ways:
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ACTUAL shipment or transmission of items outside of the U.S.
DEEMED exports: Release or disclosure to a foreign national within or outside
the U.S.
Exports are defense articles, defense services, and related
technical data.
Military items are classified on the U. S. Munitions List (USML).
This EXCLUDES the mere travel outside of the U.S. by a person with
knowledge of controlled technical data.
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What does the ITAR Regulate?
 The ITAR relates to controls regarding hardware, technical
data and defense services relating to the items listed on the
United States Munitions List (USML) – which is located in the
ITAR – Part 121.
 21 Major Categories – can be very general
 Last Category – XXI - Miscellaneous – is a “Catch-All”
 These items are specifically designed and developed for a
military application and can be manufactured, sold and
exported to both military and civil end-users.
 The ITAR requires manufacturers of products that fall under
the USML to register as manufacturers with the State Dept.
and develop a Compliance Program.
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Why do we have Export Controls?
 National Security:
 Terrorism & Weapons control
 Protects U.S. defense technologies
 Trade Protection:
 Prevents proliferation of sensitive technologies
 Supply shortages, crime control
 Important Export Questions:
 What is my item? (CCL or USML?)
 Where is it going? (Embargoed Country?)
 Who will receive it? (Foreign Person or Restricted end-user?)
 How will the item be used? (Restricted end-use?)
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Michigan Technological University has an
obligation to:
 Advise all employees of the export and import laws and
regulations by conducting training.
 Develop written procedures.
 Designate certain individuals as Empowered Officials to
run this program.
 Obtain written authorizations to provide (export)
data/hardware to foreign persons.
 Implement those authorizations in accordance with the
approval and the various regulations.
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http://www.mtu.edu/research/administration/integrity-compliance/export-controls-foreign-nationals/export-control/
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Exceptions for “Deemed” Exports
 NO license required under ITAR or EAR for the deemed export of
technology that:
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Is already published or will be published;
Arises during or resulting from fundamental research;
Is educational; or
Is included in patent applications and communicated to foreign persons under certain
conditions.
 Information is published when generally accessible to the interested
public in the “Public Domain”:
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Published in any media (magazines, bookstores, newsstands, etc.);
Available in public or university libraries;
Published in patent or patent application;
Released at an “open” conference.
Look for approvals on the papers for Public Release
 CAUTION! Do not treat everything on the internet as cleared for release
in the Public Domain.
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Basic and applied research in science and engineering.
NOT proprietary research or industrial R & D.
NOT “Fundamental Research” if:
University or its researchers accept other restrictions.
Research is funded by the U.S. Government and specific
controls protecting information resulting from the research
are applicable.
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“Educational Exception”
• No license is required for information released by
instruction in catalog courses and associated teaching
laboratories of academic institutions.
• If you teach it in an open-enrollment class with no
registration restrictions, there is NO export license
required.
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High Risk Disciplines
o Engineering
o Space Sciences
o Computer Science
o Biomedical Research with Lasers
o Research with encrypted software
o Research with Controlled Chemicals, Biological
Agents and Toxins
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Foreign Person
 Any person who:
- Is NOT a U.S. Citizen
- Is NOT a Lawful Permanent Resident of the U.S. (e.g. “Green Card” Holder)
- Is NOT a protected individual as defined by 8 U.S.C. 1324b(a)(3) (e.g. asylees)
- Visa (L1, TN, H1B) = Foreign Person
 Includes foreign companies or other entities not incorporated
to do business in the U.S., as well as international organizations
and foreign governments.
 Need to Verify
• Every country of citizenship/residency/nationality = Dual and Multiple
Nationalities
• Note – some countries revoke your citizenship when you take citizenship in a
new country – however, DDTC still includes every country, from birth.
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Re-export or Re-transfer:
 Transfer of U.S. technology by an intermediary person or
institution, to a national of a third country. Can be “actual”
or “deemed”.
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Example: The University transfers controlled technology to
Country A, which employs an individual who is a national of
Country B.
 BE AWARE:
 Include applicable restrictions in sub-licensing agreements
involving articles / information subject to export controls.
 Must ensure the foreign party understands their obligations to
notify you if they plan to resell, transfer, re-export technical data
or hardware to another party. This requires approvals.
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Export Control Reform (ECR)
 August 2009, the President directed a broad-based review of the
U.S. export control system with the goal of strengthening national
security and the competitiveness of U.S. manufacturing and
technology sectors.
http://export.gov/ecr
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U.S. Department of State, DDTC – ITAR: ww.pmddtc.state.gov
• Nonproliferation sanctions list & debarred parties list
U.S. Department of Commerce, Bureau of Industry and
Security (BIS) – EAR: www.bis.doc.gov
• Denied persons list, entity list, unverified list & consolidated
screening list
• Commerce Control List (CCL)
U.S. Department of Treasury – OFAC:
http://www.treas.gov/offices/enforcement/ofac/
• Specially designated Nationals list
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Red Flags
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Abnormal or suspicious circumstances
Restrictions-funding or publication
Export of materials is expected
‘Controlled Technology’ is noted in the contract
Product’s capabilities do not fit with the buyer’s line of
business
Buyer is evasive when questioned about whether the parts
are for domestic use or re-export.
Company is less than 5 years old
The buyer or their address is similar to one of the parties
found on the US government’s list of denied persons
A freight-forwarding firm is listed as the product’s final
destination
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Some MTU Examples
 US Citizens Only
 NSF Restriction
 Not Fundamental Research
 Repetition of Contract Terms
 Prior Approval for Foreign Nationals
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All Sponsored projects received by MTU with national
security restrictions on publication of results and/or
participation by foreign nationals will be administered
through Jay Meldrum at KRC.
Export of items handled by Joanne Polzien in the
University Compliance Office.
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Fellowes are expected to be supported on any GK-12 award
for a minimum of one year and a maximum of two years.
Fellowes must be citizens or permanent residents of the U.S.
Foreign students who hold student visas are not eligible.
MTU will not accept projects unless both the Principal
Investigator (PI) and unit manager(s) concur with this decision
and agree to comply, and enforce compliance with all contract
terms and conditions.
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MTU will not accept research funding supporting development of
graduate student theses/dissertations when publication is prohibited or
requires prior sponsor approval.
MTU will accept research funding when advance sponsor notification or
limited-time (generally < 60 days) sponsor review prior to publication is
required for review of intellectual property.
MTU may consider accepting national security publication restrictions
when these are immaterial to the conduct of the project or the
theses/dissertation of a student working on the project (i.e. testing or
service projects).
MTU may consider accepting restrictions on participation by foreign
nationals when these are immaterial to the conduct of the project; this
determination will rely heavily on the recommendations of the PI and unit
administrator(s).
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Commerce Control List (CCL)
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0 – Nuclear Materials
1 – Materials, chemicals, microorganisms & toxins
2 – Materials processing
3 – Electronics
4 – Computers
5 – Telecommunications & information security
6 – Lasers & sensors
7 – Navigation & avionics
8 – Marine
9 – Propulsion systems, space vehicles & related equipment
There are 5 groups within each category:
A. Equipment, assemblies & components
B. Test, inspection & production equipment
C. Materials
D. Software
E. Technology
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Export of Items
 IF:
 The article or information is listed on the CCL or USML; or
 The University will train a foreign person in connection with the
article/data/services; or
 Actual or deemed export occurs;
 AND:
 If NO exception is available under the applicable regulations;
 THEN:
 A license MUST be obtained before any actual or deemed export
occurs; or
 NO EXPORT, and Foreign Nationals must be excluded.
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Export Compliance
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Export Licenses
 Required prior to providing foreign nationals access to
controlled technologies or materials.
 Since 9/11/01, export controls are increasingly:
 Used as anti-terrorism tools
 Focused on universities and enforcement
 Focused on life sciences and biological materials
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Technology Control Plan (TCP)
 Defines in general terms that we acknowledge restrictions
and export control laws related to research activities
 Applies to:
 Classified Research
 ITAR Projects
 Controlled Unclassified Projects
 Company Confidential Information
 Non-disclosure Agreements
 Trade Secrets
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Technology Control Plan (TCP)
 Employee signs to
acknowledge they were
briefed on the contract
restrictions and laws.
 Employee signs again,
indicating they will comply
with the contract restrictions
and the law.
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Voluntary Disclosure Program
 Mitigates enforcement
 Do it “immediately” after violation is discovered!
 Complete review and report within 60 days
 Implement plan to prevent occurrences
 Corrective Actions
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Commitment to establish new procedures, conduct additional
audits and provide/obtain additional training
 Submit full disclosure to DDTC
 Share details of violations during training sessions
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Penalties for Non-Compliance
 Civil
 Interim Suspension – up to 60 days
 Administrative Debarment from Business with U.S. Government
– usually for 3 years
 Company Fines – up to $500,000 per Violation
 Loss of export and import privileges
 Loss of right to do business with the U.S. Government
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Prime Contracts
Subcontracts
 Criminal
 For Willful Violations
 Fines - up to $1,000,000 per Violation
 Up to 20 years imprisonment
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Contact:
Jay Meldrum
906-487-3178
[email protected]
Joanne Polzien
906-487-2902
[email protected]
Ramona Englund
906-487-2654
[email protected]
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A Successful
Compliance
Program Consists
of an
Ongoing Training
Program
and
Creates a Culture
of Awareness
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