CRA Export Controls

Foreign Corrupt Practices Act

The FCPA makes it unlawful to bribe foreign government officials to obtain or retain business. The FCPA prohibits: - paying, offering, promising ot pay money or anything of value to a foreign official, a foreign political party or party official, or any candidate for foreign political office. - payments made in order to assist the firm in obtaining or retaining business for or with, or directing business to, any person - corrupt payments through intermediaries

What is an export

transfer of controlled technology, information, equipment, software or services to a foreign person in the US (deemed "export) or abroad by any means such as: actual shipment outside the US visual inspections in or outside the US written oral disclosure

Violations and Penalties

Failure to comply with U. S. export control laws can result in severe penalties ITAR: (Individual and Entity) Criminal Fines: $1M and/or 10 Years in prison Civil Fines: $500K and Forfeitures EAR and OFAC (Individual and Entity): Criminal (Willful): $1M or 5X value of export and/or 20 years in prison Civil Fines: $250K per violation or 2x the value of the transaction, whichever is greater

Data

Federal Funds - Universities typically retain the right to use, publish, and claim copyright in all data first produced in the project (FAR 52.227-14, Alt IV) Non-federal funds - If a sponsor requests ownership of project data, consider the following: Universities must retain the right to keep a copy of the data for record retention and data integrity purposes. Universities musts retain the right to publish the data and use the data for non-commercial research and educational purposes.

Technology and Deemed Exports (EAR) (15 CFR § 772)

"Technology"- is specific information necessary for the development, production, or use of a product. The information takes the form of "technical data" or "technical assistance." "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.

ITAR - Proscribed Countries (22 CFR § 126.1)

Afghanistan* Burma Belarus Congo (Formerly Zaire) Cyprus* Haiti* Iran Iraq Ivory Coast* Lebanon (eff 8/11/06) Libya North Korea People's Republic of China Rwanda* *The ITAR Proscribed countries is subject to change

Exports defined

Any oral, written, electronic or visual disclosure, shipment, transfer or transmission of commodities, technology, information, technical data, assistance or software codes to Anyone outside the US (including US citizen) A non-US individual (wherever they are) A foreign embassy or affiliate License may be required to export

Defense Services and Deemed Exports (ITAR) (22CFR § 120.9)

Defense service means: "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 "The furnishing to foreign persons of any technical data controlled under this subchapter (see § 120.10), whether in the United States or abroad."

Applicable regulations for exports

Department of State: International Traffic in Arms Regulations (ITAR) - for military use ITAR covers items, technology and information on the U.S. Munitions List (USML) - things that are "weaponizable" Dept of Commerce Export Administration Regulations (EAR) - Dual use EAR covers items, technology and information on the Commerce Control List (CCL) Dept of the Treasury, Office of Foreign Assets Control (OFAC) - Sanctions OFAC Sanctions implement political and security sanctions

OFAC

Dept of treasury office of foreign assets control economic sanctions focus on end-user or country and may limit transfer of technologies/assistance to OFAC's list of embargoed countries in certain case, OFAC regulations "trump" other gov't agencies such as the BIS (for example shipping items to Iran) OFAC has a specially designated nationals and blocked persons list prohibits payments or providing value to nationals of sanctioned countries and certain entities

Export Restricted Countries ITAR (22 CFR § 126.1)

Exports of ITAR-restricted defense articles and technical data to any foreign country or foreign person requires a license or other approval (some exceptions- Canada, NATO) Per 22 CFR 126.1 a number of countries are proscribed countries and exports to these countries or to persons from these countries are prohibited

Differences between ITAR and EAR

ITAR covers military items includes most space related technologies because of application to missile technology includes technical data related to defense articles and services (furnishing assistance including design and use of defense articles) not much latitude, few exemptions will deny a license for exports/sales of defense service or articles to certain countries research must already be published ITAR has stricter proprietary review concerns has exemption for foreing nationals in full-time regular employee of a university EAR covers dual use items (found on the CCL) regulates items designed for commercial purposes but that can have military applications (computers, pathogens, civilian aircraft, etc) covers goods, test equipment, materials and teh technology and software differs on ordinarily publishable (EAR) vs published not as many license restrictions to certain countries dOC easier to work with - more exemptions available

Exclusions for Export regulations

Public domain exclusion Fundamental Research Exclusion (FRE)

EAR: Commerce Control List

0 Nuclear Materials, Facilities & Equipment & Miscellaneous 1 Materials, Chemicals, Microorganisms 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

Technical Data and Deemed Exports (ITAR) (22 CFR §120.10)

(1)"Information . . . required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation;...software directly relating to defense articles...including] but...not limited to the system functional design, logic flow, algorithms, application programs, operating systems and support software for design, implementation, test, operation, diagnosis and repair. (2) Classified information relating to defense articles and defense services; (3) Information covered by an invention secrecy order; (4) Software . . . directly related to defense articles; (5) This definition does not include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain . . . It also does not include basic marketing information on function or purpose or general system descriptions of defense articles."

Who are Foreign Persons/ Foreign Nationals?

Foreign 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: H1B 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, instead refers to "foreign national". Foreign National: Any person who is not a citizen or national of the United States.

Fundamental Research

Fundamental Research means basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community Not proprietary research, or research from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons. The Fundamental Research Exclusion applies only to the dissemination of research data and information, not to the transmission of material goods.

Bona Fide Employee ExemptionITAR Specific (22 CFR § 125.4(b)(10))

ITAR exemption for access to ITAR-restricted technical data: 22 CFR § 125.4(b)(10) Full-time employees at U.S. institutions of higher learning; With a permanent abode in the United States throughout the period of employment Not applicable to Grad students or some post docs, etc. Not applicable to Embargoed/Sanctioned countries Not applicable to ITAR-restricted defense articles, components of defense articles or defense services (training)

Deemed Export (ITAR 22 CFR § 120.17(4)&(5));(EAR 15 CFR § 734.2(b)(ii))

ITAR: "Export" includes "disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the U.S. or abroad" and "performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad" EAR: "Any release of technology or source code subject to the EAR to a foreign national. Such release shall be deemed to be an export to the home country or countries of the foreign national."

Who Controls Exports?

International Traffic in Arms (ITAR) Department of State "Items that are inherently military in character" Export Administration Regulations (EAR) Department of Commerce "Items that are Dual Use (predominantly civil in nature with military applications) or strictly civil" Office of Foreign Asset Control (OFAC) Department of the Treasury "Financial transactions/travel to embargoed/ sanctioned countries" Other Agencies Involved: Dept. of Energy Nuclear Regulatory Commission Census Dept. of Homeland

Restricted Access Parties (May include US Persons and entities)

Key lists: 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 [OFAC] Department of State Designated Terrorist Organizations Department of State Terrorist Exclusion List (TEL)

Sanctioned Countries: OFAC  http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml

Limited Sanctions: Balkans Iraq Ivory Coast Liberia Zimbabwe Comprehensive Sanctions: Iran North Korea Sudan Syria

Fundamental Research Exclusion (FRE)

No license is required to disclose to foreign persons basic and applied research performed at universities in the US where the resulting information is ordinarily published and shared broadly in the scientific community The FRE is the most valuable of the 2 exclusions, because it allows universities to employ foreign persons on any unclassified research project, even tough the research results are: not yet in the public domain; and not yet a part of a university catalog course FRE is invalidated if: The institution accepts any agreement that: requires the sponsor's approval prior to publication or presentation of results; requires the sponsor's approval prior to the employing foreign nationals on the project work is done in a foreign country

OFAC Sanctions Lists

OFAC publishes lists of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.

Who are U. S. Persons? (ITAR § 120.15; EAR §§734.2(b)(2) & 772)

Persons usually (but not always) permitted to access export controlled information without restriction. U.S. Citizens U.S. Permanent Residents (Green Card) Other "Protected Individuals" (8 USC §1324b(a)(3)) Designated an asylee or refugee Temporary resident under amnesty provisions Any entity incorporated to do business in the U.S.

Export Restricted Countries: EAR

Restricted countries determined by the technology to be exported Particularly stringent controls apply to: China, former Soviet Union, Middle East, India, Pakistan, Eastern Europe, North Korea, Vietnam, embargoed or sanctioned countries (e.g., Cuba, Iran, North Korea, Sudan, and Syria)

What is an "Export"?

Sending or taking an item, software or information out of the U.S. except by mere personal knowledge, or transferring registration, control, or ownership in the U.S.; Disclosing (including oral or visual disclosure) controlled info to a Non-U.S. Person, in the U.S. (also known as a deemed export) or abroad; Performing technical assistance, training, or other defense services for, or on behalf of a Non-U.S. Person, whether in the United States (also known as a deemed export) or abroad; and Re-exporting from foreign countries items or info of U.S. origin (including some foreign-made items that incorporate U.S.-origin components or technology).

export control regulations responsible federal agencies

State dept inherently military technologies - international traffic in arms regulations (ITAR) commerce dept dual-use technologies (primary civil use) - export administration regulations (EAR) treasury dept, office of foreign assets control (OFAC) prohibits transactions with countries subject to boycotts, trade sanctions, embargoes

Office of Foreign Assets Control ("OFAC")

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States OFAC itself was formally created in December 1950, following the entry of China into the Korean War, when President Truman declared a national emergency and blocked all Chinese and North Korean assets subject to U.S. jurisdiction.

Fundamental Research Exclusion is destroyed if...

The institution accepts any contract clause that: Forbids the participation of foreign persons Gives the sponsor a right to approve publications resulting from the research; or Otherwise operates to restrict participation in research and/or access to and disclosure of research results. NOTE: "Side deals" between a PI and Sponsor destroy the fundamental research exclusion and may also violate institutional policies on openness in research

ITAR: U.S. Munitions List (22 CFR § 121)

There are 21 categories of technologies controlled by the US Munitions List under ITAR. Here are some examples: I Firearms, Close Assault Weapons, and Combat Shotguns II Guns and Armament III Ammunition/Ordnance

Deemed Exports

U.S. export controls cover transfers of technology to a foreign national within the U.S. (the transfer outside the U.S. is deemed to apply when a foreign national receives the information in the U.S.) Applies to technology transfers under the EAR and the provision of ITAR technical data and defense services Includes source code (not encrypted source code) Unless the fundamental research exclusion applies, a university's transfer of controlled technology to a non-permanent resident foreign national who is not a full-time university employee in the U.S. may be controlled and/or prohibited

ITAR

US Munitions list (USML) enumerates the defense articles and services (furnishing technical assistance - including design, engineering and use of defense articles) which are controlled based primarily on whether an article or service is deemed to be inherently military in character licensing handled by the directorate of defensese trade controls (DDTC)

Export Controls

US laws that regulate the distribution of strategically important products, services and information to foreign nationals and foreign countries for reasons of foreign trade policy and national security

Deemed Exports

access to controlled technology or defense service by a foreign national in US

who is a foreign person

any person who is not a lawful permanent resident of the US any foreign corporation or other entity or group that is not incorporated or organized to do business in the US any foreign government

material transfer agreement

covers transfer of incoming and outgoing research materials UBMTA - uniform biological material transfer agreement

Sanctioned / Embargoed services under OFAC

creating new information or materials at the behest of persons in sanctioned country engaging the services of persons in the sanctioned country to develop new information or materials

public domain

includes information that is published and generally available to the public: -through sales at bookstands and stores -through subscriptions available without restrictions -through patents etc

EAR

export administration regulations the commerce control list (CCL) contains commodities, technology and software subject to the EAR; identified by an Export Classification Control Number (ECCN) licensing handled by Bureau of Industry and Security (BIS) the inherent capabilities and design, not the end use, determines whether the item falls under the ITAR or the EAR

fundamental research exclusion

fundamental research means basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community, 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 reasons University based research is not considered fundamental research if the university or its researchers accept restrictions on the publicatoin of the results of the project

export exclusion

items in public domain artistic or non-technical publications (maps, children's books, sheet music, calendar, film)

export licensing and exclusions

license may be required before a controlled item or technical data about controlled item may be exported if a license is required and denied, export or deemed export is prohibited most university research and teaching qualifies for regulatory exclusions or license exemptions

public domain exclusion

published information available to the public: through sales in bookstores and through subscriptions at public libraries through published patents through unlimited distribution at a conference in the U.S. Education materials are excluded no license is required if "information concerning general, scientific, mathematical, or engineering principals commonly taught in universities or information in the public domain" through educational materials related to catalog courses in associated labs and univerisities

deemed exports

the EAR defines a deemed export as the release of technology or source code subject to the EAR to a foreign national (no green card) in the US such release is deemed to be an export to the home country of the foreign national situations that can involve release of US technology or transfer include tours of labs foreign students or professors conducting research hosting foreign scientists emails, visual inspections, oral exchanges unless the fundamental research exclusion applies, a univerity's tranfer of controlled (on the CCL) technology to a non-permanent resident foreign natioanl may require a license an/or be prohibited