ONLINE SELF-STUDY

Export Control Basics

Course Outline

Introduction

Key Terms and Exports Defined

Overview of Basic Regulations

Exclusions from Export Control Laws

Case Studies

Additional Information

Penalties and Enforcement Activities

Summary and Additional Resources

Post Test

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Introduction

Why Regulations Were Imposed?

Export control regulations do the following:

Restrict exports of goods/technology that could aid our

adversaries

Prevent proliferation of weapons of mass destruction

(nuclear, biological, chemical)

Aid in complying with U.S. trade agreements and

sanctions against other nations

Prevent terrorism

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Introduction

It is the policy of the University of North Carolina at Chapel Hill that all personnel, including employees, visiting scholars and students comply with all United States export control laws and regulations, including the Department of Commerce's Export Administration Regulations (EAR), the Department of State's International Traffic in Arms Regulations (ITAR), and the regulations administered by the Treasury Department's Office of Foreign Assets Control (OFAC).

For the complete UNC-Chapel Hill policy on Export Controls, click here: http://ehs.unc.edu/ih/biological/ec

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Key Terms and Concepts

Controlled - Subject to export control regulations

Export License - Authorization for the government to

engage in specific export activity

Deemed Export-Any transfer to a citizen or

permanent resident of a foreign country, regardless

of where the transfer occurs, is deemed by the U.S.

Government to be an export to that person’s home

country. This does not include U.S. Citizens, individuals

granted permanent resident status, or protected

individuals

KEY TERMS AND EXPORTS

DEFINED

Key Terms

Defense Service - 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.

Technology-Specific information necessary for the

“development”, “production”, or “use” of a product. (EAR)

Key Terms

• Dual Use Item – items that have both

commercial/scientific and military or proliferation

applications.

• Re-export – when a material is exported to a foreign

entity which then transfers it to another foreign entity.

If you are aware that a re-export will occur you are

responsible for making sure the re-export transaction

complies with U.S. export control regulations.

Exports Defined

Export controls cover ANY shipment, transfer, or transmission out of the US of the following items:

• Physical Goods

• Technology (technical data, information)

• Software/source code(commercial or custom)

• Disclosure of specific information and types of services to foreign nationals inside the U.S. (deemed exports)

• The transfer can occur by physical, electronic, oral, or visual means.

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Exports Defined

• Shipping research materials internationally

• Personally taking research materials abroadPhysical

• Teaching a foreign national in your laboratory to develop, build or construct certain items or software

• Presenting research at international conference or symposiumOral

• Showing controlled written documents or blue prints to foreign nationals, whether in the US or abroadVisual

• Emailing or faxing controlled information

• Storing information in ‘the cloud’Electronic

• Use of controlled information or items in research

• Research Agreement/Contract Issues: including restrictions on publications, restrictions on foreign nationals working on a project, export control language (sometimes incorporated by reference)

Other

OVERVIEW OF BASIC

REGULATIONS

Export Regulations

Export Administration Regulations

(EAR)

International Traffic in Arms Regulations

(ITAR)

Office Of Foreign Assets Control

(OFAC)

Department of Commerce

Bureau of Industry and Security (BIS)

Bureau of Industry & Security implements and enforces the Export Administration Regulations (EAR), which regulate the export and re-export of most commercial items.

Items subject to the EAR are listed on the Commerce Control List (CCL)

The inherent capabilities and design, not the end use, determines whether the item falls under the EAR

The EAR controls commodities as well as technology that pertain to these commodities. For example, teaching a foreign national graduate student the technology to develop integrated flight instrument systems, is subject to the EAR.

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Department of Commerce

Bureau of Industry and Security (BIS)

Questions to Ask Yourself Before

Exporting…

• What is my item? (classification)

• Where is it going? (country of ultimate destination)

• Who will receive it? (ultimate end user)

• What will they do with it? (ultimate end use)

• What else do they do? (conduct of end user)

Department of Commerce

Bureau of Industry and Security (BIS)

Examples of Controlled Commodities

• Marine and Oceanic Equipment

o Scuba Gear

o Underwater cameras

• Aerospace Equipment

• Computers/Tablets/iPads

• Laboratory Equipment

• Encryption Software and Source

Code

• Lasers

• Biological material

o Toxins

o Bacteria

o Viruses

o Genomic Material

• Chemicals

• GPS

• Digital Cameras

• Reagents

Office Of Foreign Assets Control

(OFAC)

OFAC Enforces economic and trade sanctions against specific

countries, terrorists, narcotics traffickers, and those engaged in

weapons of mass destruction proliferation.

Countries with sanctions currently include: the Balkans, Belarus,

Burma, Ivory Coast, Cuba, Democratic Republic of the Congo,

Former Liberian Regime of Charles Taylor, Iran, Iraq, Lebanon,

North Korea, Somalia, Sudan, Syria, and Zimbabwe.

Note: Parties sanctioned under OFAC are not located only in

these comprehensively sanctioned countries. Some restricted

parties are located in countries friendly to the US and some

even located within the US.

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Office Of Foreign Assets Control

(OFAC)

Before traveling to a sanctioned country, or trading with that country you must educate yourself on the specific sanctions programs for that country to determine whether such transactions are permitted.

OFAC’s website contains up-to-date information on each of the sanctions programs: www.treas.gov/offices/enforcement/ofac/

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Office Of Foreign Assets Control

(OFAC)

OFAC maintains Specially Designated Nationals List

(SDN). Includes over 5,800 individuals, entities,

universities, vessels and banks with whom or with

which transactions are prohibited. The list can be

found here: http://sdnsearch.ofac.treas.gov/

When exporting, it is very important to know your

recipient and their intended use for your item.

EHS can provide assistant with screening your

intended recipients.

Department of State

International Traffic and Arms Regulations

ITAR is administered by the U.S. Department of State.

ITAR regulates items on the U.S. Munitions List (USML).

The USML lists the defense articles and services(technical assistance - includes design, engineering and use of defense articles) which are controlled for export.

The USML is based on whether an article or service is deemed to be ‘inherently military in character’.

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Department of State

International Traffic and Arms Regulations

ITAR Requires Export Licenses For ALL EXPORTS of

Defense Articles, Defense Services, and/or Technical Data

to Foreign Persons wherever located.

Technical data is information required for the design,

development, production, manufacturing, assembly,

operation, repair, testing, maintenance or modifications of

controlled articles regulated by ITAR.

Foreign nationals working on ITAR controlled items must

do so under an approved deemed license .

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Department of State

International Traffic and Arms Regulations

Examples of Defense Items and Defense Services

• Weaponized biological or

chemical agents

• Drones

• Military vehicles and tanks

• Providing training to foreign

military

• Infrared Cameras

• Militarized nuclear detection

equipment

EXCLUSIONS FROM

EXPORT CONTROL LAWS

Exclusions from Export Control Laws

Not all export activities require licenses. There are ‘carve outs’ written into the regulations that allow for transfers without obtaining export licenses.

Exclusions/Exemptions from Export Control Laws

Public Domain Exclusion (ITAR, EAR)

Education Exclusion (ITAR, EAR)

Employment Exclusion (ITAR only)

Fundamental Research Exclusion (ITAR, EAR)

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Public Domain Exclusion

No license is required to export or transfer information and research results that are generally available to the interested public through:

– Libraries, bookstores, or newsstands,

– Trade shows, meetings, seminars in the U.S. open to the public,

– Published in certain patent applications, or

– Websites accessible to the public.

Note: the public domain exclusion applies to information and research results -- not physical equipment, substances, computer programs etc.

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Employment Exclusion

No license is required to share information subject to

export control laws with a foreign national if the

foreign national:

– is a full-time, bona-fide employee of the University;

– is not a national of certain countries of concern;

– has a permanent address in the U.S. while employed at

the University; and

– has been informed in writing not to transfer the

information to other foreign nationals.

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Fundamental Research Exclusion

No license is required for fundamental research, defined as basic or applied research in science or engineering

– at an accredited institution of higher learning in the U.S.; and

– resulting information is ordinarily published and shared broadly in the scientific community.

Fundamental research is to be distinguished from research where the results are restricted for proprietary reasons.

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Education Exclusion

No license is required to transfer information to

students, including students who are foreign nationals,

concerning general scientific, mathematical or

engineering principles commonly taught in schools,

colleges or universities.

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CASE STUDIES

Case Study #1

• A marine biologist, in connection with her research off the coast of

Madagascar, takes with her to Madagascar seafloor navigation

equipment for depths exceeding 1000 m and positioning accuracy

within 10 m of a given point.

– The "Public Domain" exclusion applies only to information, not to

equipment such as the seafloor navigation equipment.

– The "Fundamental Research" exclusion does not apply because the

research is to be conducted abroad.

– The seafloor navigation equipment with the specifications listed is

regulated under EAR's CCL and there is no license exception.

A license is required to take this equipment out of the US to

Madagascar.

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Case Study #2

A computer scientist is working on encryption strategies with a

graduate student who is a Pakistan national and is not a

permanent resident of the United States.

Some encryption technologies my not be in the public domain and their

development may not be considered fundamental research under either

EAR or ITAR.

The graduate student may be able to qualify for ITAR's employment

exclusion, but EAR has no corresponding exclusion.

Sharing the encryption technology with the graduate student may

constitute a "deemed export" of that technology and may require a

license.

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Case Study #3

A plant biologist working on genetic control of plant

development receives funding from a corporate

sponsor who exercises substantive prepublication

review. The biologist sends samples of puccinia

striiformis to colleagues in Canada for analysis.

The "public domain" exclusion applies only to information, not to physical

objects such as the samples.

The "fundamental research" exemption does not apply because of the

sponsor's substantive prepublication review.

Puccinia striiformis, along with several other plant pathogens, is listed on

the EAR CCL, and there is no applicable license exception.

Sending this sample to Canada will require an export license.

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ADDITIONAL

INFORMATION

Census Bureau

The Census Bureau monitors U.S. export activity.

Exporters are required to file Electronic Export

Information (EEI) with the Census Bureau when:

Any single item in a shipment is valued over $2,500

or

An export license is needed for an item

or

Your destination is a restricted territory (country facing

strained relations with the U.S.)

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Census Bureau

Most carriers (FedEx, UPS, World Courier, etc.) can

file the EEI for you for a fee.

EHS can file it for you for no charge. We will need a

copy of your commercial invoice at least one day

PRIOR to shipping.

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Census Bureau

DO NOT UNDER VALUE items on your commercial

invoice to avoid customs fees at your destination!

Unusually low values are flagged by the Census

Bureau and can result in an audit. If you are found

under valuing your items you could be subject to

monetary penalties and/or loss of export privileges.

If customs officials at your destination catch you under

invoicing you may be subject to fines or even cargo

seizure. In extreme cases you may be barred from

exporting to that country in the future.

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Destination Considerations

Always check with your collaborator regarding

import permits for your destination.

If an import permit is not required always check if

there are other relevant documents needed.

Keep in mind duties and taxes for your destination

as well. These can be checked in advance at:

http://export.gov/logistics/eg_main_018130.asp

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Record Keeping

The exporter must create and maintain records for 5

years from date of export

Records include the following:

Commercial Invoice Required for all international shipments

Air Waybill

Electronic Export Information

EAR/ITAR Export License

Dangerous Goods Declaration

Destination Country Import Permit

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What about Laptops?

Faculty and students who need to take their laptops

out of the country in connection with university

fundamental research may do so as long as:

the country of travel is not under U.S. sanctions;

the laptop is a "tool of trade"; and

the laptop remains in their possession and control at all

times.

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What about Laptops?

Make sure the laptop does not contain any controlled

information on the hard drive. If it does and you take

it out of the country you have just exported that

information and may be in violation of export control

laws.

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PENALTIES AND

ENFORCEMENT ACTIONS

Penalties

• Penalties for violating export control

laws can be severe. They can be levied

against individuals, institutions, or both.

• Violations of any of the regulations can

result in up to $1M fines and/or 10

years in prison per violation.

• Controlled export transactions are often

subject to more than one regulation so

the punishments can be even worse for

multiple violations.

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Penalties and Enforcement Actions

University of Tennessee Professor

John Reece Roth (2009)

– Convicted and sentenced for export control

violations

– Violations included:

• transferring technical data relating to

drones to foreign graduate students,

• Having ITAR controlled technical data

information on his computer during a

trip to China

Penalties and Enforcement Actions

University of Massachusetts Lowell (2013)

• Two-year suspended penalty of $100k for

unlicensed export of an atmospheric sensing device

and related equipment to a Pakistani company on

BIS Entity list.

SUMMARY AND

ADDITIONAL RESOURCES

Summary

Not all items need an export license. Classification of

items should be conducted by Export Control

Specialist (ECS) before exporting.

Environment, Health and Safety is authorized filer of

ALL export licenses for the university.

Contact EHS with as much lead time as possible – the

determination and licensing process can take 6 weeks

or more.

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Summary

Know your recipient!

Export control regulations apply to physical items as

well as the technology it takes to develop those items.

Be aware of research agreement terms and abide by

all restrictions.

Fines for non compliance can be levied against

individual researchers, Principle Investigators as well

as the university.

Report any export control violations to the ECS.

Resources

UNC-CH Resources

• UNC Export Control Homepage

• Shipping Biological and Hazardous Materials

Governmental Resources

• Bureau of Industry and Security

• Office of Foreign Assets Control (OFAC) Regulations

• International Traffic in Arms Regulations (ITAR) Regulations

Contact

For any questions or further information on export

controls contact the Export Control Specialist:

Tel: 919-962-3829

Email: shipping@ehs.unc.edu

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