Export Controls at Penn
Missy Peloso
October 12, 2011
University of Pennsylvania
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What are the Export Control Laws “ECLs”?
Export Control Laws (ECLs) are federal laws that govern how
items, technology, and data may be exported from the U.S. or
shared with foreign persons within the U.S.
• Protect national security
• Prevent the proliferation of weapons of mass
destruction
• Further U.S. foreign policy and Trade agreements
• Preserve U.S. economic competitiveness
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What is an export?
• Shipment of goods out of the U.S.
• Electronic transmission out of the U.S.
• Release of technology to a foreign national
in the U.S. (deemed export)
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An important note!
Exports include:
Emails and calls to people who are not U.S., whether the
sender/caller realizes that or not
Carrying data abroad on a computer or portable storage
device (external hard drive, memory stick, etc.), whether
it is accessed or not
Remote access to a U.S. server from abroad
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What is a U.S. person?
The following individuals are U.S. Persons:
• A U.S. citizen
• A U.S. permanent resident (green card holder)
• An individual with formal asylum status in the U.S.
Additionally, businesses and organizations incorporated in
the U.S. (U.S. entities) are included in the definition of
U.S. persons.
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Three primary federal agencies are responsible for ECLs
• Department of State through the International Traffic in Arms
Regulations (ITAR) administered by the Directorate of Defense
Trade Controls (DDTC)
• Department of Commerce through the Export Administration
Regulations (EAR) administered by the Bureau of Industry and
Security (BIS)
• Department of Treasury through the Office of Foreign Asset
Controls (OFAC)
(also NRC and Department of Energy)
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Department of Treasury ("OFAC")
– OFAC administers and enforces economic and trade sanctions
against targeted foreign countries, terrorists, international
narcotics traffickers, and those engaged in activities related to the
proliferation of weapons of mass destruction.
– Sanctions are country specific and include financial
transactions
– Specially Designated Nationals are persons, businesses and
nations designated by OFAC for sanctions
In general, it is prohibited to provide anything of value to designated
parties.
Office of Foreign Assets Control (OFAC)
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OFAC “Specially Designated Nationals (SDNs)
• Nations with comprehensive trade sanctions:
Burma (Myanmar), Cuba, Iran, Sudan, Libya
• Nations with partial trade sanctions
Western Balkans, Belarus, Cote d’Ivoire, Iraq, Liberia, North Korea,
Sierra Leone, Syria, Zimbabwe, persons undermining the
sovereignty of Lebanon
• Individuals and Businesses
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OFAC Licenses
• Program specific, but within a program
– General licenses apply to the described activities within the
sanctioned nation and specific permission for the use of that
license is not required
– Specific Licenses may be granted for activities not covered by a
general license.
• No uniform licensing procedure
– Expect licensing process to be protracted
– No guarantee license will be granted
• Availability of licensing depends on the proposed activity
and the location
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Examples of OFAC PROHIBITED Activities:
– Sharing research materials
– Engaging the services of persons to develop new informational
materials or support of research activities (i.e., just hiring
Iranians to work on an archeological site may be prohibited!)
– Providing marketing and business services
– Performing analysis of research samples from a university in an
embargoed location
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Department of State (DDTC)
– Determines regulatory authority for new technologies through
Commodity Jurisdiction process
– Administers the ITAR (primarily military and listed on the United
States Munitions List (USML)).
• Defense articles
• Defense services
• Related technical data
– For a list of controlled technologies see 22 CFR 121.1
(http://www.pmddtc.state.gov/regulations_laws/documents/officia
l_itar/ITAR_Part_121.pdf )
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Examples
Defense Article: an unmanned aerial vehicle(UAV)
(drone) is developed with Department of Defense
funding for use in surveillance activities (USML Category
VIII a).
Defense Service: a foreign national graduate student is
part of the project team and has access to all information
related to the UAV. The provision of the technical
information about the UAV to the foreign national is a
defense service.
Technical Data: the design information including technical
specs, blueprints, etc. for the UAV.
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DDTC Export Licenses
• The export of defense articles, defense services or
ITAR controlled technical data requires a license
from DDTC.
• Applicable exemption for technical data:
A U.S. company may export unclassified controlled technical data to a
U.S. person employed by that company overseas. A U.S. company
employee may also travel abroad with such technical data so long
as the information is not shared with foreign nationals abroad.
A record of the export must be maintained including a
description of the data, method of transmission, and
date and time of the export.
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Department of Commerce (EAR)
The EAR covers
– technologies and technical information with both
commercial and military applications,
(chemicals, biologicals, telecommunications,
software, computers, etc.).
– military items not enumerated on the USML.
– Solely civil use items depending on the end
use/end user
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The Commerce Control List (CCL)
• The CCL is a positive list. Controlled items and
technologies are specifically enumerated and assigned
an export control classification number (ECCN)
• Any item not specifically enumerated is designated as
EAR99
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BIS Export Licensing
• Licensing requirements for items on the CCL depend on:
– What the item is
– Where it is going
– What it will be used for
– Who will be using it
• The ECCN provides the information needed to make the
determination of whether or not a license is required for
an export
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BIS license exceptions
• Many licensing exceptions exist under the EAR.
Applicability depends on the ECCN and the destination.
Ones commonly used in the academic environment
include:
– TMP: temporary exports of equipment or technical data
– APP: exports of some computers
– BAG: export of personal items
• Work with the Export Compliance office to determine if a
license exception is applicable to your activity.
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Public Domain Exclusion
Information in the public domain is not subject to controls.
Examples include information
• available at newsstands or bookstores
• Available in libraries or online
• Available for subscription purchase without restriction on who may
purchase
• Patents
• Software made available at cost (not encryption)
• Conferences, exhibitions, and trade shows that are generally
accessible to the public
– Anywhere for the EAR
– In the U.S. for the ITAR
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Educational exclusion
Educational Information is generally excluded from the
ECLs, but is important to understand the related
definitions:
ITAR: information concerning general scientific, mathematical or
engineering principles commonly taught in schools, colleges, and
universities.
EAR: information released by instruction in catalog courses and
associated teaching laboratories of academic institutions.
University teaching activities are thus generally not subject
to these regulations, but still need to be aware of OFAC.
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Fundamental Research
Fundamental research means basic and applied research
in science and engineering, the results of which
ordinarily are published and shared broadly…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 concerns.”
-National Security Decision Directive 189
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Fundamental Research Exclusion (EAR)
University based research. Research conducted
by scientists, engineers, or students at a
university normally will be considered
fundamental research
(“University” means any accredited institution of
higher education located in the United States.)
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Fundamental Research Exclusion (ITAR & EAR)
University research will not be considered fundamental
research if:
1. The University or its researchers accept restrictions on publication
of scientific and technical information resulting from the project or
activity, or
2. The research is funded by the U.S. Government and specific access
and dissemination controls protecting information resulting from the
research are applicable.
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Examples of Specific Controls
• Requirement of pre-publication review AND approval
• Limitation on participation to U.S. persons or citizens
• Requirement of prior approval for foreign person
participation
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Fundamental research
True or false:
Because Penn performs fundamental research, the ECL’s
do not apply to research activities at Penn!
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Caution!
Not all university research without publication restrictions is uncontrolled.
Existing
Information
or
Technology
University
Research Activities
Research
Results
If the pre-existing information is in the public domain, and there are no
restrictions on who may participate, then the entire project is
fundamental research.
If the pre-existing information is in the public domain but there are
restrictions on who may participate, then the research activities are
controlled, even though the results may be freely published.
If the pre-existing information is not in the public domain (proprietary),
then it is controlled, and the activities using that information are
controlled, even though the results may be freely published.
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Identifying Controlled Research
• Use of equipment or materials enumerated in the CCL or ITAR
(required to sign statement relating to export controls)
• Language in the RFP, BAA or award documents identifies export
controls
• There are restrictions on publication or on who might participate
• Proprietary information is being used in the conduct of the research
• International collaboration
• International travel or presentation at international conferences
outside the U.S.
• Presentations at closed conferences or meetings
• Contracts with government sponsors such as DoD, DOE, DARPA,
etc. funding research with potential military applications
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What does this mean for Penn researchers?
1. It is important for you to identify research subject to
ECLs and verify if the fundamental research
exclusion applies.
2. It is important that you understand that international
shipments are always subject to applicable ECLs
3. It is important for you to verify that international
travel and financial transactions are permissible
under existing ECLs.
It is the responsibility of PIs to identify potential
controls and work with export control staff and
ORS to make sure that ECLs are not violated.
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Process for export control evaluation
Who has
jurisdiction?
Is a license
required?
How is license
obtained?
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Assistance in determining if activities are controlled
If you need assistance in making a determination of
whether or not your activity is controlled and if so under
which regulations, contact the Director of Export
Compliance at 215-746-0234 or expctrl@lists.upenn.edu
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If your Activities are controlled
Contact the Director of Export Compliance for assistance
with developing an appropriate Technology Control Plan
(TCP). The TCP:
• Identifies the reasons for control
• Identifies who is responsible for the controls
• Establishes security procedures to prevent inadvertent
export of the controlled technology
• Ensures compliance with ECLs at Penn
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Steps for Exporting Research Materials
• Verify that shipments are permissible (perform restricted
party screening)
• Identify what controls are applicable for the proposed
shipment
• Identify licensing requirements or applicable exception
and recordkeeping requirements
• Obtain licenses as required
• Register the export if necessary
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International Travel and Hosting International Visitors
• Check to make sure you are not doing business with
banned parties
• Make sure lab tours and other activities are compliant
with ECLs
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Violations of ECLs
Violations of the ECLs can result in both institutional and individual
penalties including:
• large fines,
• imprisonment
• debarment from future export activities.
Penalties associated with violation of the ECLs are mitigated by selfreporting the violation.
If you become aware of an ECL violation at Penn please contact one of
the following:
Director, Export Compliance: Elizabeth Peloso (215-746-0234)
Office of General Counsel: Robert Firestone (215-746-5266)
Compliance hotline: (215-P-COMPLY) or
http://www.upenn.edu/215pcomply
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Further information
http://www.upenn.edu/researchservices/exportcontrols.html
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