Transcript Jennifer P. May, J.D. Associate Director of Compliance MU Office of Research.

Jennifer P. May, J.D.
Associate Director of Compliance
MU Office of Research
Learning Objectives
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The Agencies: Who Sets the Rules?
The Definitions: Who and What is Impacted?
The Rules: What is Controlled?
The Exclusions: Who and What is Not Impacted?
The Research: How do we Protect this Work?
The Enforcement: What Happens if we Break a Rule?
The Rest: What else should we consider?
We need to comply because…
 Growing foreign national employee and student
populations involved in technology-related research
 Growing portfolio of defense-related research, both
with government and industry sponsors
 increasing contractual restrictions on research
 Growing portfolio of international collaborations
 Failure to comply with U.S. export and sanction laws
can result in severe penalties
Who Sets the Rules?
U.S. Department of State
Directorate of Defense Trade Controls
International Traffic in Arms Regulations (ITAR)
• U.S. Munitions List
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Defense Articles
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Defense Items
Technical Data about defense items
Defense Services
 Controls exports and temporary imports* for purposes of:
U.S. national strategic objectives
 Defense trade policies
 Arms embargoes
 Terrorism sanctions
*The ATF controls permanent import of munitions
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U.S. Department of Commerce
Bureau of Industry and Security
Export Administration Regulations (EAR)
 Commerce Control List
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“Dual use” items and technologies
Commerce also houses:
 Patent and Trademark Office
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Patents, trademarks, copyrights
 Bureau of the Census
 Trade statistics
U.S. Department of the Treasury
Office of Foreign Assets Control
Foreign Assets Control Regulations (FACR)
 Financial transactions
 Exportation or importation of goods and
services
 Blocked property
 For the purposes of:
 U.S. foreign policy goals
 U.S. national security goals
 Economic and Trade Sanctions
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Targeted foreign countries
Terrorists
International narcotics traffickers
WMD proliferation activities
U.S. Department of Energy
Nuclear Regulatory Commission
Export and Import of Nuclear Equipment and
Materials Regulations (EINEMR)
 Nuclear equipment or material such as reactors
Assistance to Foreign Atomic Energy Activities
Regulations (AFAEAR)
 Activities or training, directly or indirectly,
involving nuclear technology
Other nuclear-related commodities and technology are under the
export licensing authority of the Department of Commerce
Disclosure of Information
DFAR 252.204-7000 (Dec 1991)
 The Contractor shall not release to anyone outside the Contractor’s
organization any unclassified information, regardless of medium
(e.g., film, tape, document) pertaining to any part of this contract
or any program related to this contract, unless—
 The Contracting Officer has given prior written approval; or
 The information is otherwise in the public domain before the
date of release
 Requests for approval shall identify the specific information to be
released, the medium to be used, and the purpose of the release.
The Contractor shall submit its request to the Contracting Officer
at least 45 days before the proposed date for release.
Export-Controlled Items
DFAR 252.204-7008 (Apr 2010)
 The Contractor shall comply with all applicable laws and regulations
regarding export-controlled items, including, but not limited to, the
requirement for contractors to register with the Department of State in
accordance with the ITAR. The Contractor shall consult with the
Department of State regarding any questions relating to compliance
with the ITAR and shall consult with the Department of Commerce
regarding any questions relating to compliance with the EAR.
 The Contractor's responsibility to comply with all applicable laws and
regulations regarding export-controlled items exists independent of,
and is not established or limited by, the information provided by this
clause. …
 The Contractor shall include the substance of this clause, … in all
subcontracts. items.
Export-Controlled Items
DFAR 252.204-7008 (Apr 2010)
from the federal register notice…
 “The clause puts all contractors, including
universities performing contracts for fundamental
research only, on notice that they are responsible
for complying with all applicable export control
laws and regulations.”
Who and What is Impacted?
Key Definitions: Export
 Sending or taking a tangible item outside of the U.S.
 Sending from one foreign country to another (aka ‘re-export)
items or technology of U.S. origin (including some foreignmade items that incorporate U.S.-origin components or
technology)
 Disclosing (including oral or visual disclosure)
technical data, technology, or source code to a non-U.S.
Person, in the U.S. or abroad
 Providing technical assistance, training, or defense
services to a non-U.S. Person, whether in the United
States or abroad
22 CFR §120.17 and 15 CFR § 734.2
Key Definitions: U.S. Person
 Persons who are permitted to access export controlled
items without restrictions:
 U.S. Citizens
 Aliens who are “Lawful Permanent Residents”
Green Card holders*
 Other “Protected Individuals”*
 designated an asylee or refugee
 a temporary resident under amnesty provisions
 Any entity incorporated to do business in the U.S.
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8 USC§1101(a)(20) and 8 USC§1324b(a)(3)
Key Definitions: Foreign Person
“Foreign Person” means everyone not a U.S. Person
 Any foreign interest and any US Person effectively owned or
controlled by a foreign interest
 Includes foreign businesses not incorporated in the U.S. and
persons representing other Foreign Persons
 Includes: H-1B Work Visa, F1 Study Visa, J1 Training Visa, E1
Investors Visa, TN Work Visa, L1 Intra-Company Transfer Visa,
K and V Fiancée Visas
 EAR does not use the term foreign person, but rather
foreign national – definition is the same as above
What is Controlled?
Regulations
 International Traffic in Arms Regulations (ITAR)
 Export Administration Regulations (EAR)
 Office of Foreign Assets Control (OFAC) Sanctions
Programs
 EAR and ITAR sanctions
ITAR: U.S. Munitions List
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
22 CFR §121
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 – Directed Energy Weapons
XIX – Reserved
XX – Submersible Vessels, Oceanographic and
Associated Equipment
XXI – Miscellaneous Articles
ITAR: Exports Determination
 Export of U.S. Munitions List Items and
Technologies restricted to all destinations.
 Very few, narrow exemptions or exceptions
ITAR: Defense Article/Technical Data
 Defense Article
 Any item or technical data designated on the U.S. Munitions List
 Technical Data
 Information required for the design, development, production,
manufacture, assembly, operation, repair, testing, maintenance OR
modification of defense articles
 Does NOT Include:
 information in the public domain, or
 information concerning general scientific, mathematical or
engineering principles commonly taught in schools, colleges and
universities, or
 basic marketing information on function or purpose or general
system descriptions of defense articles
22 CFR§120.6 and 120.10
ITAR: Defense Services
(1) “The furnishing of assistance (including training) to foreign persons,
whether in the United States or abroad in the design, development,
engineering, manufacture, production, assembly, testing, repair,
maintenance, modification, operation, demilitarization, destruction,
processing or use of defense articles;” or
(2) “The furnishing to foreign persons of any technical data controlled
under this subchapter (see § 120.10), whether in the United States or
abroad.”
(3) “Military training of foreign units and forces, regular and irregular,
including formal or informal instruction of foreign persons in the
United States or abroad or by correspondence courses, technical,
educational, or information publications and media of all kinds,
training aid, orientation, training exercise, and military advice.”
22 CFR§120.9
EAR: Commerce Control List
Categories
0- Nuclear Materials, Facilities & Equipment & Miscellaneous
1- Materials, Chemicals, Micro-organisms and Toxins
2- Materials Processing
3- Electronics Design, Development and Production
4- Computers
5- Telecommunications & Information Security
6- Sensors and Lasers
7- Navigation and Avionics
8- Marine (ships & vessels)
9- Propulsion Systems, Space Vehicles and Related Equipment
EAR: Exports Determination
 Export Control Classification Number (ECCN)
 Technical performance characteristics
 Type of control
 End user
 including nationality
 End use
EAR: “Deemed” Export
 Any release of technology or source code subject to
the EAR to a foreign national within the U.S or
abroad.
 Such release shall be “deemed” to be an export to
the country or countries of origin of the foreign
national.
Export can occur in the United States or abroad.
15 CFR§734.2(b)
EAR: Technology
 Specific information (or source code) necessary for the
“development”, “production”, or “use” of a product listed
on the Commerce Control List
 EAR
 Use: Operation, installation (including on-site installation),
maintenance (checking), repair, overhaul and refurbishing of
controlled items
 ITAR
 Use: Design, development, production, manufacture, assembly,
operation, repair, testing, maintenance or modification of
defense articles
15 CFR§772
EAR: Technical Assistance and Data
 Technical Assistance
 may take forms such as instruction, skills training, working knowledge,
consulting services.
 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.
15 CFR§772
OFAC: What is a Sanctioned Transaction?
 Importation or exportation of goods or services of value
to a sanctioned country, entity, or specially designated
national.
 Engaging in a financial transaction with a sanctioned
country, entity, or specially designated national.
 Travel to sanctioned countries
 Sanctioned transactions generally do not apply to
activities with foreign nationals from sanctioned
countries lawfully admitted to the US
OFAC: Sanctioned Countries
List Based Sanctions
Comprehensive Sanctions
 Cuba
 Iran
 Sudan
 North Korea
 Syria
• Balkans
• Belarus
• Burma
• Cote D’Ivoire
• Democratic Republic of Congo
• Iraq
• Lebanon
• Liberia: Former Liberian Regime of Charles Taylor
• Somalia
• Zimbabwe
• Anti-Terrorism
• Diamond Trading
• Counter Narcotics Trafficking
• Non-Proliferation
Other Restricted Parties Lists
In addition to export and sanctioned countries, there are
also restricted entities and individuals:
Department of Commerce Denied Persons [BIS]
Department of Commerce Entity List [BIS]
Department of Commerce "Unverified" List [BIS]
U.S. Treasury Department Specially Designated Nationals and
Blocked Persons, including Cuba and Merchant Vessels, Iran,
Iraq and Merchant Vessels, Sudan Blocked Vessels [OFAC]
 Department of State Designated Terrorist Organizations
 Department of State Terrorist Exclusion List (TEL)
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Other Countries of Concern
 STATE (ITAR 126.1)
 Policy of Denial: Belarus, Burma, China, Cuba,
Eritrea, Iran, Lebanon, Liberia, North Korea, Sierra
Leon, Sudan, Syria, Venezuela
 Case-by-case Review: Afghanistan, Democratic
Republic of the Congo, Haiti, Iraq, Libya, Vietnam,
Somalia, and Sri Lanka
Who and What is NOT Impacted?
Higher Learning Exclusions
Many university activities and research projects are
NOT subject to export controls/ foreign national
restrictions due to regulatory exclusions:
 Public Domain Information
 Educational information
 Bona fide Employee
 Fundamental research
Public Domain or Publically
Available Information
 Materials available in newspapers and libraries,
presented at publicly available conferences, trade
shows
 Websites accessible to the public for free and
without the host’s knowledge or control of who
visits
22 CFR §120.11 and 15 CFR §734.7
Educational Information
 General science, math, and engineering commonly
taught at schools and universities
(ITAR)
 Information conveyed in courses listed in course
catalogues and in their associated teaching labs of
any academic institution (EAR)
22 CFR §120.11 and 15 CFR §734.9
“Bona fide Employees” (ITAR only)
 No license is required to share covered technical
data with a foreign national who
 Is not a national of certain countries;
 Is a full-time, bona fide MU employee;
 Has a permanent address in the US while employed; and
 Is advised in writing not to share covered technical data
with any foreign nationals.
 NOTE: this does not apply to post-doctoral
appointees or graduate/undergraduate students!
22 CFR §125.4(b)(10)
Fundamental Research
 Basic or applied research at an accredited institution of
higher learning in the U.S.
 No publication restrictions
 If federally funded, no access or dissemination
restrictions on results
As long as the above conditions are met, the results of
your research are not subject to ITAR/EAR restrictions
even if the subject area of the research appears on the
USML or CCL.
15 CFR §§734.2, 8 & 11 , CFR 22 CFR §120.11.a.8, and 125.1.a.1
I’m confused…
• Not all “exports” are controlled
• Information in the Public Domain is
“uncontrolled” and is eligible for unrestricted
dissemination
• Information subject to Export Control is restricted
for dissemination
• May require a license, or
• May be eligible for a license exception or exemption
How do we Protect this Work?
Conducting Restricted Research
 Student Participation
 Technology Control Plan
 Physical and Information Security
 Personnel Screening and Training
 Project Close-Out
Student Participation in Restricted Research
MU Graduate School Policy
Research Must Be Open to Public Disclosure
Students are prohibited from using research (data, results,
methods or other content) in their theses or dissertations that
could restrict subsequent publication or public disclosure of
these documents. Examples of restricted information include
classified or proprietary materials.
It is important to note that these restrictions do not apply to
nonthesis or nondissertation research that is approved by the
student's adviser and allowed by University of Missouri policies.
Questions regarding the applicability of this policy to thesis or
dissertation content should be referred to the Graduate School.
Technology Control Plan
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Institutional Commitment
Commodity Jurisdiction and Classification
Physical Security Plan
Information Security Plan
Personnel Screening Procedures
Project Completion Requirements
Annual Self-assessment Certification
Physical and Information
Security
 Minimum “one lock” principle for securing controlled
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items
Restricted work area – prevent visual and oral
disclosure, key control, custodian services escorts
Storage and Marking
Computer, Data Storage and Transmission
Encryption or Password Protection, recommend at
least 12 characters including #s & special characters
Personnel Screening and
Training
 All personnel with access to controlled items:
 are screened for nationality and restricted party lists
 are required to attend export training
 Includes graduate students, undergraduate students, technicians,
and IT managers
 Screening must include:
 subcontractors
 consultants
 international suppliers
Project Closeout
 Closeout procedures for destruction or returning of
items to sponsor
 Post-award monitoring of award activity (adding
personnel, change in SOW, etc.)
What Happens if we Break a Rule?
Penalties for Violations
ITAR (Defense-related)
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Criminal Fines: up to $1M and 20 years in prison
Civil Fines: up to $500K and Forfeitures
Debarment/Loss of Federal Funding
EAR/FACR (Dual-Use / Sanctions)
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Denial of export privileges
Debarment
Criminal Fines: up to $1M and 20 years in prison
Civil Fines: up to $250K or 5X value of exports
Penalties can apply to you (as an individual) and to the university!
Enforcement Actions
• ITAR
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Professor sentenced to 4 yrs in prison
University currently under criminal investigation
1 CY08 university directed disclosure
10 CY09 university voluntary disclosures
• EAR
• University nearing settlement over EAR99 violations with
Chinese entity
• Classified
• University currently under investigation for classified
material spillage
J. Reece Roth
Emeritus Professor of Electrical and Computer Engineering
University of Tennessee
Sentenced to 4 years in prison for “illegally
exporting military technical information
relating to plasma technology designed to be
deployed on the wings of drones operating as a
weapons or surveillance systems.”
Evidence included exports of technical data to
foreign national graduate students in his lab.
Monday, October 3, 2011 – U.S. Supreme Court
denied certiorari.
What else should we consider?
Shipping
 Any item valued at $2500 or greater may require an
Electronic Export Information submission to the
Bureau of Census
 Many items require export licenses or other
government approvals to ship outside of the US
 Consult your Office of Research prior to shipping or
taking UMSL property outside of the United States
Travel
Commerce and State have regulations that affect:
• Physically taking items with you on a trip such as
• Laptops
• Encryption products on your laptop
• Data/technology
• Blueprints, drawings, schematics
• Supplying certain technologies/data at a “closed”
conference or meeting
• Note-taking not allowed
• Not open to all technically qualified members of the
public
Travel
The Office of Foreign Assets Control (OFAC) has
regulations that affect:
 Money transactions and the exchange of goods
and services in certain countries – providing
“value”
 Travel to sanctioned countries
 Doing business with certain people or entities
 Commerce, State, and OFAC have “lists”
Travel
 A license could be required depending on what you
are taking and the country you are traveling to
 A license or technical assistance agreement would be
required if you were providing a “defense service” to a
foreign person
 A defense service means the furnishing of assistance
(including training) to a foreign person relative to a
defense article. It also includes furnishing any
technical data relative to a defense article.
 There are consequences if you violate the
regulations!
Travel
 In most cases, if you need to work abroad, a license
exception or exemption is available!
 EAR: “TMP” or “BAG”
 An exception/exemption is not needed if you are
taking a “clean” laptop to countries other than Cuba,
Syria, Iran, North Korea, or Sudan
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Items, software should be evaluated before travel
 Consider reviewing State Department advisories prior
to travel for information on your destination.