Export Controls: An Introduction
Gene Stein
Director, Sponsored Research Development
What Are ITAR and EAR?
• ITAR : International Traffic in Arms Regulations
• EAR: Export Administration Regulations
These regulations apply to all of SDSU’s activities,
not just sponsored projects.
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Why Do They Exist?
The U.S. government wants to make sure that
strategically important technology, services, and
information don’t get into the hands of foreign
nationals and foreign countries. Some of the
regulations have been around for decades, but there
is more concern since Sept. 11, 2001.
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Three Government Agencies Involved
• Department of State: Controls defense articles and
services; technical data; most space-related articles (ITAR)
• Department of Commerce (Bureau of Industry
and Security): Controls “dual-use” items—goods and
technology with both civilian and military uses (EAR)
• Department of the Treasury: Controls trade
embargoes and the Customs Service
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What if SDSU Doesn’t Do Sensitive
Defense Work?
We’re not building tanks or missiles. Why worry?
• Some research that faculty members do can be
defense-related or have a dual use (toxins/microorganisms, lasers, computer design)
• If we’re going to engage in this work we may need
to get a license, which can take months and $$
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Why Must We Comply?
• Possible fines and imprisonment for violators
• Possible civil and criminal penalties for
individuals, SDSU, and SDSURF
• Loss of export privileges
• Loss of research grants and contracts
• Bad publicity
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How Is “Export” Defined?
• An actual shipment of items (equipment, data,
software, information) subject to ITAR or EAR out
of the U.S.
• Performing technical assistance for, or on behalf of,
a foreign person or company, whether in the U.S. or
abroad
• Re-exporting or shipping U.S.-origin goods or
technology from one foreign country to another
foreign country.
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Defining “Export” (cont’d)
• Releasing (including oral or visual disclosure)
technical data or technology to a foreign person,
whether in the U.S. (“deemed export”) or abroad.
Important
If a foreign student sees or discusses sensitive data in a
faculty member’s lab, it is considered a deemed export and is
the same as sending the data or technology to that student’s
home country.
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What Is A Deemed Export?
• In the absence of an exclusion, a license must be
obtained from the U.S. Dept of State or Commerce
to disclose controlled technical information to a
foreign person in the U.S. or abroad.
• Methods of disclosure include: Fax; telephone
conversations; e-mail communications; computer
data disclosure; face-to-face discussion; training
sessions; tours with visual inspection.
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Who Is A “Foreign Person”?
A foreign person is everyone other than a:
• U.S. citizen;
• permanent resident alien;
• legal immigrant with a green card; or
• “protected individual” (refugee/someone with asylum)
A business that is not incorporated in the U.S. is a
considered a foreign person.
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“Foreign Person” Problem/Solution
Problem: How can a university check the
nationality of every student who goes into a lab?
It’s not realistic, impairs education, and restricts the
free flow of information.
Solution? Say that the visas and scrutiny students
got before coming to the U.S. are sufficient.
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Categories of Items under ITAR
ITAR covers military items (listed I–XXI) such as:
I.
II.
Firearms, assault weapons, shotguns
Guns and armament
III. Ammunition/ordnance
IV. Guided missiles, bombs, torpedoes
(It goes down to Item XXI.)
Item XIV is Toxicological, Biological, Chemicals
Aside from Item XIV, this won’t affect SDSU.
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EAR (Military & Civilian Use)
0. Nuclear materials, facilities, equipment
1. Chemicals, microorganisms, toxins
2. Materials processing
3. Electronics design, development, production
4. Computers
5. Telecomm. and information security
6. Sensors and lasers
7. Navigation and avionics
8. Marine
9. Propulsion systems, space vehicles
We MAY need a license on these
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Implications of Export Laws
There will be no effect on most university research,
at SDSU and elsewhere. But there will be a potential
impact on:
• Ability of foreign researchers or students to participate
in research involving controlled technology
• SDSU’s ability to provide some training (mainly in
controlled equip.) to foreign persons
• Ability to send controlled equipment to foreign
countries
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Exemptions (Some Good News)
A license is not required to disseminate information if
one of three exemptions applies:
• Fundamental Research Exemption (ITAR, EAR)
• Employment Exemption (ITAR only)
• Education Exemption (ITAR, EAR)
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Fundamental Research Exemption
This is important:
No license is required to disclose to foreign
persons information that is in the public domain,
meaning it is published and is generally accessible or
available to the public through books, news, libraries
open to the public, unrestricted subscriptions,
conferences, etc.
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FRE (cont’d.)
Even more importantly for Universities
No license is required when the work is fundamental
research.
Fundamental Research is “basic and applied
research in science and engineering at universities where
the resulting information is ordinarily published and
shared broadly in the scientific community.”
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FRE (cont’d.)
Rough translation for implementation:
• If a faculty member is allowed to publish his/her
research findings in the open literature, the
Fundamental Research Exemption applies and a
license is not needed.
• If publishing restrictions are accepted, and/or
foreigners are not allowed to participate or see the
research, it is not fundamental research. These
restrictions destroy the exemption.
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National Security Decision Directive-189
Reagan Administration issued in 1985
It establishes the following policies:
• To the maximum extent possible, the products of
fundamental research should remain unrestricted
• Where national security requires control of
federally-funded fundamental research in science
and engineering at universities and labs, control
should be through security classification
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NSDD-189 (cont’d.)
• “No restrictions may be placed upon the conduct
or reporting of federally-funded fundamental
research that has not received security
classification, except as provided in applicable
statutes.”
• In 2001, former National Security Advisor
Condoleeza Rice reaffirmed NSDD-189.
Problem: Many federal contract officials don’t know
about NSDD-189.
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More on FRE
The FRE is destroyed if SDSU accepts any contract
clause that:
• Forbids participation by foreign persons;
• Gives the sponsor the right to approve
publications resulting from the research; or
• Restricts participation in research and/or access to,
and disclosure of, research results.
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FRE (cont’d.)
A “side deal” between the PI and sponsor (not to
publish) can destroy the FRE and may also violate
university policies.
NOTE: Sponsors are allowed to request temporary
delays in publication (30-90 days) to allow time to
review for patentable or confidential information
without destroying the FRE.
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FRE (cont’d)
If the sponsor requires the PI to delete certain
information, or if the PI is required to get the
sponsor’s consent before publishing, the FRE is
destroyed.
NOTE: Accepting a restriction on one project
does not destroy the FRE on others. Even a
restriction on one part of a project doesn’t destroy
the FRE on the total project.
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Strategies
• Protect the FRE by negotiating the elimination of
all contract clauses or language that restrict
university control over publications, or limit access
to, or participation by, foreigners in research.
• Do not accept any research projects that restrict
the ability to publish or share information with
everyone.
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Strategies (cont’d.)
On federal projects or on subcontracts from industry,
do not accept these clauses:
• DoD Clause 252.204-7000 (Disclosure of Information)
• FAR Clause 52.227-17 (Rights in Data, Special Works)
• Army Clause 52.005-4401 (Release of Information) Also,
AR 530-1 and AR 360-1
• DFARS Air Force Clause 5352.227-9000 (Export
Controlled Data Restrictions)
• Army Corps of Engineers, 52.000-0-4017
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Strategies (cont’d.)
With industry, it may be necessary to see the
company’s prime contract to make sure about flowdown clauses
With industry, we may only be able to accept a
portion of the workscope, so that the export-controlled
part is done by the company, with SDSU’s part being
fully publishable
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Strategies (cont’d.)
If SDSURF and SDSU decide to accept an
award that requires the PI to receive exportcontrolled information, we must consider
whether the information is:
• Central to the project (probably making the whole
project export-controlled); or
• Tangential, in that the PI needs the information but
others on the project don’t.
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Strategies (cont’d.)
If we decide the information is tangential:
• Execute a nondisclosure agreement
• Require that the information be clearly marked
“export controlled”
• Work with the PI to make sure he/she safeguards
the information
• Ask PI sign a statement accepting responsibility
for protecting the information
Why?
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Penalties
• Liability is personal as well as institutional
• Penalties are severe:
•
•
Fines up to $1 million
Significant prison time
OPINION: Except in rare and unusual cases, SDSU should not accept
awards where export-controlled information is central to the project.
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II. Employment Exemption
No license is required to share technical information
with a foreign person who:
• Is a full-time, bona fide SDSU employee
• Has a permanent US address while employed,
provided that he/she is:
(a) not a national of certain countries
(b) is advised in writing not to share controlled
information with other foreign persons
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Employment Exemption (cont’d.)
The employment exemption does not apply to
students. They are not employees.
This means that certain foreign students cannot
have access to, or participate in, research involving
controlled information or technology.
How can a PI know what country every student is
from? PIs won’t check visas of their students
This is another reason not to accept awards with
export-controlled material, information, or data
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III. Education Exemption
Another exemption….
• If the controlled information concerns “general
scientific, mathematical, or engineering principles
commonly taught at universities, or is information
in the public domain,” no license is required to
share it with foreign persons
• Foreign students using controlled equipment to
conduct research should be registered for a creditbearing research class.
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Equipment Exemption?
ITAR and EAR prohibit training foreign persons in
the design, development, use, or testing of controlled
equipment without a license. BUT…
Most universities rely on:
• the FRE because equipment is part of doing
research; or
• the education exemption when instruction
requires use of equipment
… and faculty won’t check students’ visas.
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Laptop Exemption
Excluding countries under sanction (Iran, Iraq,
Myanmar, Cuba, Libya, Liberia, Syria, North
Korea), faculty can take a laptop out of the U.S. to
use on a project that qualifies as fundamental
research. There’s a license exemption for temporary
export (TMP) if the laptop can be considered a “tool
of the trade” and the PI retains control of it at all
times. Microsoft’s Web site tells which of their
software is controlled and needs a license.
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It Gets Confusing – Example I
SDSU faculty wants to take GPS systems to France
to train colleagues.
• GPS is covered under EAR, category 7 (Navigation and
Avionics). Maybe also under ITAR.
• Is a license needed? From which agency? PI and SDSU
need to figure it out.
• A license may be needed. Some colleagues may not be
French. Are some on list of denied people?
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Example II
Physics Dept. wants to hire a foreign national as a
tech assistant. Is an export license required?
• Maybe yes. If a foreign national is hired in a technical,
non-clerical position, his/her hire is considered a deemed
export. Transferring technology or data to the person is
the same as transferring the technology to the person’s
home country.
• If an export license is not required because of the person’s
nationality, he/she should sign a document agreeing to
comply with US export regulations.
• Licenses can take up to a year to obtain.
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What Can Hurt Us?
Research sponsored by corporations:
• Is the corporation in violation?
• Is our research subcontract part of a larger agreement that
contains export controls?
Also….
• Increasing federal scrutiny of university research and
deemed exports
• Troublesome FAR clauses restricting publication
• Material transfer agreements
• Interpreting national security vs. “openness”
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What Do We Have to Do?
• Educate SDSURF and key SDSU administrators
(including deans and chairs) about export control
issues and penalties
• Create an export control awareness program for
faculty and other researchers
• Designate someone in Graduate Division and/or
SDSURF to be point-person for information on
export control issues
• Be sure questions on routing form concerning
export control are answered by PI
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What Do We Have to Do? (cont’d)
• Train SDSURF staff to look for export control
issues in the contract review process. Does an
exemption apply? Are there hidden publishing
restrictions, etc?
• Select a person (VP for Research?) who has
authority to decide whether SDSU will accept
projects that require a license.
• Option: Decide that research projects without one
of the exemptions (esp. FRE) will not be accepted.
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