Export Controls and CSU
Export Control Administrator
scot.allen@colostate.edu
Why Have Export Controls?
The U.S. Government’s larger interests:
o Protecting military technology from distribution abroad.
o Protecting the domestic technology that was funded and
conducted to further U.S. economic security.
o Tracking the distribution of allowed exports to uncover wider
individual or organizational behaviors that threaten U.S.
interests.
o Furthering U.S. foreign policy.
Once Upon a Time…
o Export Control Act (July 5, 1940)
o Japanese occupation of Indo-China
o All airplane parts, aviation fuel, scrap
o Extended in 1949 as greater economic and foreign policy tool
o Arms Export Control Act of 1976
o Cold War
o Focus on large and powerful enemies/allies, military technology
o Post-9/11
o Shift to collecting information on sub-national groups and networks,
dual-use technology
Export Controls Today
“Export Controls” generally include several federal laws and regulations:
o Arms Export Control Act
o Export Administration Act
o International Traffic in Arms Regulations (ITAR)
o Export Administration Regulations (EAR)
o Treasury/OFAC Regulations
o Dept. of Energy Regulations
Through these laws, the federal government seeks to control the export of goods,
money, and technology to certain countries, corporations, and individuals.
Under certain circumstances, a license must be applied for and received from an
agency prior to an export. In some cases, a license will be denied.
What is an Export?
An export can be any of the following:
o actual shipment of any covered goods or items;
o the electronic or digital transmission of any covered goods, items, or related
goods or items;
o any release or disclosure, including verbal disclosures or visual inspections, of
any technology, software or technical data to any foreign national wherever
located; or
o actual use or application of covered technology on behalf of or for the benefit
of any foreign entity or person anywhere.
What are Export Controls?
There are three primary areas of attention for CSU:
(1) International Traffic in Arms Regulations (ITAR), created by the
Department of State under 22 CFR §§ 120-130. Enforced by the Directorate
of Defense Trade Controls (DDTC).
• The ITAR covers defense related articles and information used for military
purposes such as: explosives, chemicals delivery systems, and biological
agents. These items and technologies often appear in sponsored research
from federal agencies or private contractors.
• “Defense Service” was recently defined by the DDTC to include “mere
access” to a defense article.
What are Export Controls?
(2) Export Administration Regulations (EAR), created by the Department of
Commerce under 15 CFR §§ 730- 774. Enforced by the Bureau of Industry
and Security (BIS).
• Included in this section are “dual-use” items. This means an item or
technology not primarily of a military nature, but which could be utilized or
incorporated into a military device or activity.
• Technically, all items not covered by ITAR are covered by the EAR, but
many do not require licenses.
• Deemed Exports apply only to “development, production, or use” of
controlled technology. “Use” defined as “Operation, installation,
maintenance, repair, overhaul, AND refurbishing.”
What are Export Controls?
(3) Economic Sanctions and Blocked Individuals, as enforced by the
Department of Treasury’s Office of Foreign Asset Control (OFAC).
• OFAC restricts trade with certain individuals and elements within particular
countries, as dictated by U.S. foreign policy. Additionally, U.S. citizens may
also be restricted from certain transactions. Blocked party lists are updated
regularly in the Federal Register.
• Emerging areas of concern include China, Iran, and Syria.
Fundamental Research
o The Fundamental Research Exclusions of EAR and ITAR state that no
license is required to disclose to a foreign person information that is:
“published and which is generally accessible or available to the public [through for example]
fundamental research in science and engineering at universities, where the resulting information is
ordinarily published and shared broadly in the scientific community.”
o The majority of University research falls in this category.
o Does NOT apply to:
o Physical equipment
o Research where there is no intent to publish/contractual restrictions on publication
o Research conducted outside the U.S.
Bona Fide Employee Exemption
o Only applies to the ITAR.
o Applies to the release of unclassified information to a non-U.S.
person who is a full-time, bona-fide employee, with a permanent
abode in the U.S. during employment.
o Employer must inform employee, in writing, about export
control issues to which they will be exposed.
o Applies to Technical Data only, not Assistance or Physical
Goods.
“Classroom” Exception
o Applies to educational information released by instruction in
catalog courses and associated teaching laboratories.
o Applies to courses available globally on-line (“distance learning”)
- but not to OFAC-embargoed countries.
o Does NOT apply to instruction or training regarding design,
development, engineering, manufacture, assembly, testing and
use of a defense article.
o Does not apply to encryption software.
o Dissertation research must meet the standards for “fundamental
research” to qualify under this exception as “publicly available”.
Not Just a Research Issue…
Export Controls in the University
Setting
o “Deemed Exports”
o Disclosing controlled technology to a foreign national in the U.S.
o Graduate Students/Employees
o International Visitors
o International Research
o Shipping or using technical equipment abroad
o International Collaboration
o Exchanging information with international research partners
o International Travel
o Taking information abroad, i.e. on a laptop or flash drive
Export Controls in the University
Setting
o Hiring/Human Resources
o Screening for hires/visiting scholars
o I-129 attestation forms
o Visa applications
o Purchasing
o Transactions with SDNs/Blocked Parties
o Transactions with Embargoed Countries
o Shipping
o Material destinations and end users
Deemed Exports – In Action!
Export Regulations:
The Only Constant is Change
Removal of Myanmar, Afghanistan from most sanctions
Changes in Sudan
Daily changes to the disbarred/suspended entity lists
New OFAC sanctions on Iran
New advisory opinions and prosecutions show shifting nature of
agencies
o Sweeping transition between ITAR and EAR, 2009-201??
o Jan 3rd – President signed satellite export control reform bill
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Learn to spot “Red Flags”
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Restrictive terms in agreements
– Who can participate in the work
– What you can publish
– When you can publish
– How you can share, distribute, or use results
Work done abroad
Sending abroad information, material or equipment
Electronic sharing of software or other technology including
– Not publicly available
– Encryption software
– Defense article or service
Ultimate destination or use unknown (you send it overseas and the recipient sends it to someone
else)
Sending, transmitting or disclosing to a sanctioned country or a person or organization on the
restricted party lists
A Renewed Emphasis on Export
Controls
o Prior to 9/11, universities claimed that their operations fell completely under
the “Fundamental Research Exclusions” that are included within both EAR
and ITAR. As such most universities paid little thought to the issues
surrounding export controls.
o Post 9/11, the Department of Homeland Security and the various agency
enforcement arms are tracking the sponsored research from groups such as
DoD, NASA, and DoE, as well as Universities generally, much more closely
in the area of export-controlled technology.
o Advances in monitoring technology and a proliferation of agents are leading
to greater enforcement.
Penalties for Non-Compliance
o Institutional Liability and Personal Liability
o Criminal and Civil Penalties
o Example: University of Tennessee
o Department of State (Directorate of Defense Trade Controls)
o Personal and Institutional fine of up to $1,000,000 and up to 10 years in prison.
o Department of Commerce (Bureau of Industry and Security)
o “Willful” violation: Personal fine up to $250,000, and up to 10 years in prison.
Institutional fine up to $1,000,000. “Knowing” violation: $50,000 and up to 5
years in prison.
o Department of the Treasury (Office of Foreign Asset Control)
o Criminal: Fine up to $1,000,000. Civil: Fine up to $55,000 per violation.
CSUS Board of Governors:
Export Control Policy Statement
o Adopted 10/5/2012.
o “[CSUS] is committed to the highest level of compliance with all applicable
U.S. export control laws and regulations…”
o “Each institution shall develop specific policies and procedures as necessary
to comply with this Policy…and shall maintain such…to remain current with
changes in applicable laws.”
o CSU policy adopted 12/31/2012:
http://eid.colostate.edu/FileSharing/unsecuredownload.aspx?id=603a2430e6f5-4d11-9255-a5619b052e3b
CSU and Export Controls
Role of the Export Control Administrator:
o Help educate and protect P.I.s and other University personnel
o Protect the Institution
o Conduit between University personnel and federal agencies
o Be Practical and Facilitative
o Answer Inquiries Promptly and Give Full Assistance
Hypothetically…
o “You need to clear this with us before you publish…”
o Formal and informal permission restrictions on publication destroys the Fundamental
Research Exclusion.
o “No foreign nationals will work on this, right?”
o If accepted, even informal restriction of foreign project personnel destroys the Fundamental
Research Exclusion.
o “We need 60 days to review this for proprietary information before you
publish.”
o Review-only does not destroy Fundamental Research Exclusion.
o “DoD says this technology isn’t controlled.”
o What DoD thinks is irrelevant; only the enforcement agencies (DDTC, BIS) make
jurisdiction decisions. Relying on interpretations or claims from any other source puts you
at risk.
Hypothetically…
o “This equipment isn’t from the government, so it’s not controlled.”
o
It is the nature of the technology, not its source, that determines whether or not it is controlled.
o “My NDA says I can’t ever publish this health data I’m using.”
o
Restrictions on publication are fine if the data in question is not subject to export controls.
o “Let’s see what my foreign colleague thinks about this problem.”
o
The informal discussion or transmission of technical documents regarding a controlled project are an
export, even if the collaborator isn’t officially on the project.
o “I didn’t need a technology control plan on a prior similar project.”
o
The establishment of the Export Control program as mandated by the Board of Governors, along with
an increase in restrictive contract language on publication and other issues, has caused some projects and
technology that was previously uncontrolled to require attention going forward. The Export Control
Administrator will work with all faculty to ensure that any control process is as fast and unobtrusive as
possible. Early contact with the ECA will help minimize delays.
o In Sum: Contact the ECA when any red flags or questions arise, or just for
clarification on Export Control rules or procedures.
Hypothetically…
SCENARIO 1
o Professor X is performing fundamental research on how penguins play
underwater tag, using military sonar equipment and non-military GPS
equipment. He is on location in Argentina and Antarctica.
o Professor X has three graduate assistants. Two with her on assignment are
from Canada and China, although the Chinese student is now a citizen of the
U.K. .The third is back on campus crunching the numbers, and he is from
Iran.
o The research is funded by National Geographic, which is withholding
publication rights to the results in case there is something juicy, and they want
to use it on their penguin reality television show.
Hypothetically…
SCENARIO 2
o Professor Y runs a lab where his undergrads do assigned lab work, and his
graduate students do sponsored research. In particular, a high-powered
electron microscope is used, which is controlled by the Commerce
Department under the EAR.
o On the other side of the lab, another professor has a plasma thruster she uses
to test materials, which is controlled by the State Department under the
ITAR.
o Professor Y invites his colleagues from Germany, China, Pakistan, and Iran to
campus for a visit. They visit the lab, looking at all the projects taking place
there. Professor Y gives a draft of his new research paper in development to
all of his visitors on hyper-encrypted flash drives.
o The guests tour the local breweries and go home to their respective countries.
CSU and Export Controls
o Questions?
o Contact me: scot.allen@colostate.edu
o More Information:
http://web.research.colostate.edu/OSP/export.aspx