Transcript University of Massachusetts Conflicts of Interest Policy

UMass Amherst
Export Control Seminar
Liz Rodriguez
Associate Counsel
University of Massachusetts
November 18th, 2009
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Purposes of E/C Law
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Advance Foreign Policy Goals
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Restrict Exports of Goods and Technology that could
Lend a Military Advantage to our Adversaries
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Prevent Proliferation of Weapons of Mass Destruction
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Prevent Terrorism
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Fulfill International Trade Obligations
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Balance These Objectives Against Impact on U.S.
Economy including on R&D
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Export
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Send or Take a Controlled Item Outside of
the United States
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Release of Controlled Item to a Foreign
National WITHIN the United States
Unlawful to Export a Controlled Item Without a
License or under Exemption or Exception
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Deemed Export
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Release Within U.S.
Technology, information and data or software source
code, or providing technology training or services
(including about a machine or equipment)
Subject to EAR or ITAR
Deemed to Country of Citizenship or Residency
Foreign Nationals – excludes U.S. Permanent Resident
(green card holder) and persons with refugee, asylum or
other protected status
Where No License Exemption or Exception Applies
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High Risk Disciplines
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Engineering
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Astronomy
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Computer Science
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Polymer Science & Engineering
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High Risk Disciplines
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Government Contract/Subcontract with
U.S. Military Agencies
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Corporate Sponsors Include Defense Contractors
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Foreign Corporate and Government Sponsors
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Key Regulations - ITAR
Military Items (and Space)
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Regulated by the State Department
International Traffic in Arms Regulations
U.S. Munitions List (USML)
National Security
Not only Sensitive or Classified Items
MILITARY
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Key Regulations - EAR
Dual-Use Items
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Regulated by the Commerce Department
Export Administration Regulations (EAR)
Commerce Control List (CCL)
ECCNs, including EAR99
Commercial Items with possible Dual Uses
Balance foreign availability, commercial and research
objectives with national security
Lists to Check
http://www.bis.doc.gov/complianceandenforcement/liststocheck.htm
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ITAR/EAR DIVIDE
Encryption items. The phrase encryption items
includes all encryption commodities, software,
and technology that contain encryption features
and are subject to the EAR. This does not
include
encryption items specifically designed,
developed,
configured, adapted or modified for military
applications ( including command, control and
intelligence applications) which are controlled by
the Department of State on the U.S. Munitions
List.
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Key Regulations - OFAC
Embargoed Countries and Sanctioned Persons
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Regulated by the Treasury Department
Office of Foreign Assets Control (OFAC)
Embargoed Countries
SDN List of Sanctioned Persons
Prohibits Payments
Includes terrorists, terrorist organizations, drug
traffickers
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Embargoed/Sanctioned Countries
as of November 2009
Cuba, Iran, North Korea, Sudan, Syria
Others: http://www.access.gpo.gov/bis/ear/pdf/746.pdf
Embargoed for Defense Articles and Services:
http://www.pmddtc.state.gov/embargoed_countri
es/index.html Examples: Afghanistan, Burma,
Belarus, Lebanon, North Korea
Arms Embargo to China - Includes Space
MUST SECURE A LICENSE FIRST!
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Severe Penalties against
Institutions and Individuals
Penalties for ITAR Violations (each, per violation):
 Criminal (Entities): Up to $1M
 Criminal (Individuals): Up to $1M / 10 years prison
 Civil Fines: Up to $500K and Forfeitures
 Penalties for EAR Violations (each, per violation):
 Criminal (Entities): Up to $1M
 Criminal (Individuals): Up to $1M / 20 years prison
 Civil Fines: $250K
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Severe Penalties against
Institutions and Individuals (cont’d)
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Penalties for OFAC violations (per violation):
 Criminal (Entities): Up to $1M
 Criminal (Individuals): Up to $1M / 20 years prison
 Civil Fines: $250K
Institution also subject to administrative penalties:
 Termination of export privileges (EAR and ITAR);
 Suspension and/or debarment from government
contracting (EAR and ITAR)
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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 he took data about it to
China in May 2006.
On July 1, 2009, a federal judge ordered
Professor Roth to serve four years behind bars
for his handling of restricted air force
technology.
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Controlled Item?
Four Step Process
1.
Determine ECCN Using CCL Part 774 & Check for License
Exceptions
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Check Country Chart
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Check General Prohibitions for End-Uses, including for EAR99
Items
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Check EAR & OFAC Lists for End-Users, including for EAR99
Items
Items Not Specified by an ECCN are “EAR99”
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Using the CCL
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Commerce Control List Part 774
10 Categories of Items
Each Category Organized into 5 Groups
(A) Systems, Equipment, and Components
(B) Test, Inspection and Production Equipment
(C) Materials
(D) Software
(E) Technology - information (aka technical data and technical
assistance) about “development”, “production”, or “use”
of a product
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Each Item Designated by an ECCN e.g., 3A981
End-User Certificate for Foreign Sponsors
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Red Flags
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Know Your Customer and End-Uses – such as research
collaborators in foreign countries
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Sponsor Letters – “vet” who you are sponsoring before
you assist them in securing any visa
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Sponsors with unusual requests, such as large batches
of highly regulated and potentially hazardous materials
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Requests from persons in U.S. to ship abroad, or with
phone numbers or addresses outside of the US
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Requests from Sponsors for materials outside their
general business area
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EAR & ITAR
License Exemptions
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Public Domain
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Education Exclusion
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Fundamental Research
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License Exemptions
Public Domain EAR/ITAR/OFAC
Information that IS published AND generally accessible to
the public, including:
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Items Available through newsstands, bookstores,
Internet, subscriptions, mail order
Libraries
Published Patent Applications and Patents
Conferences, Meetings, Seminars in the U.S. Generally
Accessible to the Public
Fundamental Research
PUBLIC DOMAIN = NOT SUBJECT TO EAR / ITAR
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License Exemptions
Education Exclusion EAR/ITAR
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EAR does not apply to instruction in catalog courses and
associated teaching laboratories of universities
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DOES NOT EXCLUDE CERTAIN ENCRYPTION SW 15 cfr 734.9
ITAR does not apply to technical data (information) that
only describes general scientific, mathematical or
engineering principles commonly taught in universities
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DOES NOT EXCLUDE TEACHING ABOUT SPECIFIC TECHNICAL DATA OR
ANY MANIPULATION OF DEFENSE ARTICLE
 NOTE: ITEMS IN PUBLIC DOMAIN ARE NOT SUBJECT TO ITAR
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Fundamental Research Exclusion
NSDD-189 (1985)
Fundamental research means BASIC and
APPLIED RESEARCH in science and
engineering at Universities, the results of
which ORDINARILY ARE PUBLISHED AND
SHARED BROADLY within the scientific
community, as distinguished from proprietary
research and from industrial development,
design, production, and product utilization,
the results of which ordinarily are restricted
for proprietary or national security reason.
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Fundamental Research Exclusion (FRE)
..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 project)
..does not apply to advanced encryption
..does not apply to defense article itself
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Laboratory Service Contracts
Purchase Orders From Recharge Centers
 Right to Publish?
 Are you receive Materials from Sponsor?
 Using Modified Equipment with Unpublished
User Manuals?
 Using Proprietary Technology? Unpublished
Protocol? Process not covered by Patent?
 No Protection Under FRE
 Supplier Classification of Materials
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Fundamental Research Exclusion
EAR Guidance
For dual-use items, the EAR provides guidance and greater
flexibility than ITAR for FRE
 Permits prepublication delay by sponsor to prevent
inadvertent release of sponsor proprietary information and
to file for patent protection
 FRE applies to work under U.S. government grant
involving EAR controlled information even if there are
access and dissemination controls provided that university
follows the national security controls
See Dept. of Commerce FAQs: Suppl 1 Part 734
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Proprietary Information - EAR
BIS policy is that information an organization or
individual withholds from publication is subject to
the EAR. Trade secrets fall within the scope of
EAR and may require license before release to a
foreign national.
If preexisting technology, subject to the EAR, is the
basis of a research endeavor, it may be necessary
to receive a license before involving foreign
nationals in that research.
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Proprietary Machines
There are few exclusions that cover foreign national
access to defense articles or company proprietary
machines with unpublished use manuals.
Open Source Software
Software development for research purposes or
intended to be open-sourced results in publicly
available software, assuming encryption
restrictions do not apply.
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Nondisclosure / Confidentiality
Agreements
If you enter into a confidentiality or nondisclosure
agreement which restricts your ability to publish
research results, the project may cease to qualify
for the fundamental research exclusion
Exchange of controlled items under a confidentiality
or nondisclosure agreement, for example during
the proposal stage, does not qualify for
fundamental research exclusion.
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Strategies
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Avoid Signing Confidentiality Agreements
Avoid Accepting Company Proprietary Items or
Information
Buy commercially available materials rather than
Company provided materials
Refuse Publication Restrictions
Ask Sponsors to Omit Controlled Items from
UMass Portion of Subcontract - DARPA
Notify OGCA of any Red Flags – Knowledge of
Violation is about to occur?
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Shipping Materials or Technology Abroad
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Use 4 Step Process to Classify the Item under EAR
Is it Specifically Designed, Configured, Modified or
Adapted for a Military or Space Application?
If so, ITAR may apply
Any Red Flags – Do you suspect any Proliferation
Activities such as activities relating to proliferation of
nuclear, chemical or biological weapons, missiles or
weapons of mass destruction?
Need to make an AES filing
DOUBLE CHECK--HAVE YOU CHECKED THE LISTS!!
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Automated Export System (AES)
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AES electronic filing (formerly, the Shipper’s
Export Declaration paper filing) is required for
shipments such as:
transactions authorized under an export license,
such as a shipment to an OFAC embargoed
country
All commodities shipped under NLR or a license
exception if the value is greater than $2,500
Online Training EAR Training - Module 6
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Travel Abroad
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Exemptions may apply to cover export of
controlled items (commodities, software,
materials, information) abroad, but planning is
required to identify the exemptions
Temporary licenses (TMP) may apply for items
that will be carried with you and returned to U.S.
Guidelines for Securing a License are Available
for Travel to Certain Countries, such as Cuba
There may be Approved Travel Companies that
can assist to secure a license
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Running a Tight Ship (ITAR)
Practices to Ensure Compliance
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What U.S. Origin Defense Articles (items or
technical data) are developed or received by
your laboratory and how do you track it?
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What U.S. Origin technical data related to
defense articles are developed or received by
your laboratory and how do you track it?
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Bona Fide Employee
Exclusion (ITAR)
The exclusion under ITAR 125.4(b)(10) allows a
bona fide University Full Time Foreign National
Employee to have access to unclassified technical
data, but the employee must:
 Must live in U.S.
 Cannot be a national from a proscribed country
under ITAR 126.1 and
 Must be notified in writing not to transfer data to
other foreign nationals
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Resources
Commerce Department (EAR) Online Training
http://www.bis.doc.gov/seminarsandtraining/semin
ar-training.htm
Determining ECCN
http://www.bis.doc.gov/licensing/exportingbasics.
htm
EAR Definitions
http://www.access.gpo.gov/bis/ear/pdf/772.pdf
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Federal Agencies & Statutes
State Department – International Traffic in Arms Regulations (ITAR)
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Applies to Defense Articles and Defense Services
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ITAR Regulations http://www.pmddtc.state.gov/regulations_laws/itar_consolidated.html
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Items listed on United States Munitions List (USML)
http://www.pmddtc.state.gov/regulations_laws/documents/consolidated_itar/2009/Part_121.
doc
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Includes Space-related Technology Due to Nexus to Missile Applications
Commerce Department – Export Administration Regulations (EAR)
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Bureau of Industry and Security (BIS) http://www.bis.doc.gov/
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Commercial Items Determined to Have Potential for “Dual-Use”
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Items listed on the Commerce Control List (CCL) and EAR99 “catch-all”
Treasury Department - Office of Foreign Assets Control (OFAC)
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Trade sanctions, embargoes, restrictions on certain end-users
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Sanctions on terrorists, terrorist organizations, narcotics king pins
Others: Nuclear Regulatory Commission; Department of Energy, Department of
Homeland Security; Customs; Immigration and Naturalization Service
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Commerce Control List
EAR Categories
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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
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U.S. Munitions List
ITAR Categories
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IIIIIIIV-
Firearms, Close Assault Weapons and Combat Shotguns
Guns and Armament
Ammunition/Ordnance
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
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U.S. Munitions List
(cont’d)
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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
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