Export Controls
Rensselaer Polytechnic Institute
Office of General Counsel
What are export controls?
• U.S. laws that regulate the distribution to foreign
nationals and foreign countries of strategically important
technology, services and information for reasons of
foreign policy and national security.
• Export control laws apply to ALL activities – not just
sponsored research projects.
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What Is An Export?
• Physical shipment of goods or items;
• Electronic or digital transmission of goods or items;
• Release of specific technical data to any foreign national;
• Access by a foreign national of any covered technology.
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Export Control Laws
Commerce Department
State Department
Treasury Department
Export Administration
Act
Arms Export Control
Act
Trading with the Enemy
Act, Int’l Emergency
Economic Powers Act,
& Others
Export Administration
Regulations (“EAR”)
15 C.F.R. Parts 700-799
International Traffic in
Arms Regulations
(“ITAR”)
22 C.F.R. Parts 120-130
Iraq Sanctions
Regulations, Terrorism
Sanctions Regulations,
& Others
31 C.F.R. Parts 500-599
Commerce Control List
U.S. Munitions List
List of Specially
Designated Nationals &
Blocked Persons
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Categories – EAR (dual-use)
• 0-Nuclear Materials, Facilities & Equipment (and Misc.
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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Categories – ITAR (military)
• I-Firearms, Close Assault Weapons and Combat
Shotguns
• II-Guns and Armament
• III-Ammunition/Ordnance
• IV-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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Categories – ITAR (military)
• 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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Differences Between ITAR and EAR
• ITAR:
– Covers military items (munitions/defense articles);
– Includes most space related technologies due to
application to missile technology;
– Includes technical data related to defense articles and
services (furnishing technical assistance including
design, engineering and use of defense articles);
– Very strict, not much latitude, few exemptions.
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Differences Between ITAR and
EAR (cont.)
• EAR:
– Regulates “dual use” items - items designated for
commercial purposes but that can have military
applications (computers, pathogens, civilian aircraft,
etc.);
– Covers goods, test equipment, materials and the
technology (technical data and technical assistance)
and software;
– Commerce Department easier to work with – more
exemptions available.
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OFAC Restrictions
• OFAC prohibits the transfer of anything of value and the
provision of services to countries subject to U.S.
sanction programs, boycotts, etc. without a license.
• Sanctions are complicated and vary across countries.
• Examples: conducting surveys and interviews in
boycotted countries; providing marketing and business
services to persons in boycotted countries. Once, even
editing by US citizen of a technical article originating in
an embargoed country was deemed a violation (IEEE
example)
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OFAC Restrictions by Country
Balkans, Belarus, Burma, Cote d’Ivoire, Cuba, Democratic
Republic of The Congo, Iran, Iraq, Former Liberian Regime
of Charles Taylor, North Korea, Sudan, Syria and Zimbabwe.
For full, up to date listing, see OFAC website:
http://www.treas.gov/offices/enforcement/ofac
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Deemed Exports
• Export controls cover transfers of goods and technology
within the U.S. to a foreign national who is not a U.S.
citizen or permanent resident (“green card” holder);
• Applies to technology transfers under the EAR and
ITAR’s technical data and defense services;
• Applies to research assistants, students, visiting foreign
researchers, or even faculty who do not yet have green
cards.
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Deemed Exports (cont.)
• In the absence of an exclusion, a license must be
obtained from Commerce or State to share controlled
technical information with a foreign person in the U.S. or
abroad.
• Methods of disclosure include:
– Fax
– Telephone discussions
– E-mail communications
– Computer data disclosure
– Face-to-face discussions
– Training sessions
– Tours which involve visual inspections
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Export Control Exclusions
License Requirement for Dissemination of Information
does not apply if one of four exclusions applies:
1.
2.
3.
4.
Public Domain Exclusion (ITAR, EAR)*
Education Exclusion (ITAR, EAR)
Fundamental Research Exclusion (ITAR, EAR)*
Employment Exclusion (ITAR only)
*Under the ITAR, the Fundamental Research Exclusion is a
subset of the Public Domain Exclusion
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Public Domain Exclusion (ITAR, EAR)
Export controls do not apply to information and research
results already published and publicly available from:
– Libraries, bookstores, or newsstands;
– Trade shows, meetings, seminars in the U.S. open to
the public;
– Published in certain patent applications;
– Websites accessible to the public;
– Courses listed in a university catalog of a general
nature.
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Education Exclusion (ITAR, EAR)
• ITAR: No license is required to share with foreign
nationals “information concerning general scientific,
mathematical or engineering principles commonly taught
in universities or information in the public domain”.
• EAR is similar but pertains to materials included in
courses found in the course catalogs of accredited
institutions.
• Students using controlled equipment to conduct
research should be registered for a research credit class.
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Fundamental Research Exclusion
(ITAR, EAR)
• No license is required to disclose to foreign nationals
information which is “published and which is generally
accessible or available to the public [through, for
example] fundamental research in science and
engineering ON SITE at US universities where the
resulting information is ordinarily published and shared
broadly in the scientific community”.
• NOTE: ITAR states “published” rather than “ordinarily
published”.
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Fundamental Research Exclusion
(ITAR, EAR) (cont.)
• The Exclusion is destroyed if the University accepts any
contract grant that:
– Forbids or requires pre-approval for the participation
of foreign nationals;
– Gives the sponsor a right to approve publications
resulting from the research; or
– Otherwise operates to forbid participation in research
and/or access to and disclosure of research results.
• This includes “side deals” that may be made outside the
terms of the award.
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Employment Exclusion (ITAR)
No license is required to share covered technical data
with a foreign national who:
– Is not a national of a prohibited country;
– Is a full-time, bona fide employee;
– Has a permanent address in the U.S. while employed;
and
– Agrees in writing not to share covered technical data
with any foreign nationals.
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Issues of Concern even if
Exclusions Apply
• Research projects directly with non-embargoed foreign
persons or entities (if Fundamental Research, must PUBLISH)
• Proprietary (non-public) information received from third parties
(e.g. NDA, MTA) is not encompassed by exceptions. This can:
– create a prohibited re-export to a foreign national even if the
project is fundamental research
– “taint” the project deliverable
• Delivery of controlled equipment or information to recipients
outside the US (or by email attachment) is not covered as well
• Travel to embargoed countries
• Travel to non-embargoed countries carrying controlled
information or items.
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Special Rules for Laptops (and
GPS devices)
Laptop Exclusion:
• Excluding embargoed countries, faculty who wish to take
their laptops out of the country to use in a university
project that qualifies as fundamental research may be
able to do so under the license exception for temporary
export (TMP) if the laptop meets the requirement for
“tools of trade” and is under the control of the faculty
member (15 CFR Part 740.9)
• BUT the laptop must remain within the person’s
reasonable control – does not include, for instance,
leaving the laptop in a hotel room while going out to
dinner.
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Use of EAR-Controlled Equipment
(Old Rule)
• There are no express exclusions that allow foreign
persons to use controlled equipment or software without
a license.
• Most universities historically relied on:
– The fundamental research exclusion, on the ground
that using equipment is part and parcel of conducting
fundamental research and/or
– The education exclusion when the program of
instruction required using equipment.
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Use of EAR-Controlled Equipment
(Recent History)
• BIS Report in 2004 criticized university handling of
controlled equipment and claimed that fundamental
research exception did not extend to use of controlled
equipment
• Issued proposed regulation which provided that any one
of the following would qualify as “use” of controlled
equipment which would require a license:
– Operation
– Installation
– Maintenance
– Repair
– Overhaul or
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– Refurbishing
Use of EAR-Controlled Equipment
– New Rule
- Firestorm of criticism from universities and industry. BIS
responded on 5/31/06 by withdrawing the harsh standard
on use
- New definition of “use” – needs ALL SIX of the following
activities:
– Operation
– Installation
– Maintenance
– Repair
– Overhaul and
– Refurbishing
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Use of EAR-Controlled Equipment
(cont.)
• REASON:
“The totality of these (listed) activities would provide the
foreign national with enough knowledge to replicate or
improve the performance of the controlled item. As such
all of the activities listed in the definition of “use” are
required to trigger a license requirement.”
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Use of ITAR-Controlled Equipment
• Not prohibited
– dissemination of basic marketing information on the
function or purpose, or general systems descriptions,
of defense articles
– Unclassified information about a defense article that is
information or software concerning general scientific,
mathematical or engineering principles currently in
the public domain
• Otherwise NO EXCEPTIONS
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Technology Control Plans
• Describes safeguards for protecting controlled
technology;
– IT access
– Building access
– Data access.
• Represents a commitment to a compliance program;
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Technology Control Plans (cont.)
• Physical security plan – locked labs, access control, visitor
logs, badges, etc.
• Information security plan – IT access, password control,
firewalls, data discussions, clean desk policy, data
discard/return;
• Personnel screening – review of denied persons lists,
background checks;
• Training and awareness (written memo is advisable);
• Self-assessment – corrective actions.
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Administrative Penalties for
Noncompliance
• Termination of export privileges (EAR and ITAR);
• Suspension and/or debarment from government
contracting (EAR and ITAR);
• Voluntary disclosure of violations serves a a “mitigating
factor” in deciding penalties.
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Penalties for EAR
Violations/Noncompliance
• Criminal (willful violations):
– Up to $1 million for the University or company;
– Up to $250K per violation for individuals and/or up to
10 years in prison.
• Civil:
– Up to $12K per violation for individuals and the
University/corporations.
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Penalties for ITAR
Violations/Noncompliance
• Criminal (willful violations):
– Up to $1 million for the University or company;
– Up to $1 million per violation for individuals and/or up
to 10 years in prison.
• Civil:
– Up to $500K per violation for individuals and the
University or company.
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Penalties for OFAC
Violations/Noncompliance
• Criminal (willful violations):
– Fine of no more than $1M for companies
– Fine of no more than $100K for individuals (including
corporate officers) and/or 10 years imprisonment
• Civil penalties:
– Fine up to $55K for each violation by any person.
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New development – Issuance of Deemed
Export Advisory Committee Report 12/07
•
http://tac.bis.doc.gov/2007/deacreport.pdf
•
The DEAC was appointed to review current deemed export policy and
ensure it continues to protect the national security of the United
States while promoting continued leadership in technological
innovation by U.S. academic institutions and industry.
•
The report concluded that the current deemed export policy and
regulations no longer effectively served their intended purposes and
proposed a new deemed export licensing process that the committee
believed will enhance both national security and economic
competitiveness.
•
Recommendations:
– “higher walls around fewer items”;
– annual “sunset” review of controlled items on the list;
– establish “Trusted Entities” and a streamlined licensing process.
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