Export Control RegulationsOverview for Faculty and Research Scientists

Why Is Compliance Important?

Possibility of Substantial Fines and Imprisonment for Violators

Civil & Criminal Penalties for the Individual and the Institution

Limiting or prohibiting the participation of foreign nationals in University research is not realistic and contrary to policy

Three U.S. Export Licensing Programs

Cuba

U.S. Department of State (Office of Defense Trade Controls) controls defense articles,

defense services, and related technical data, including most space-related articles.

U.S. Department of Commerce (Bureau of Industry and Security) controls “dual-use” items – goods and technology with both

civilian and military/strategic uses.

U.S. Department of the Treasury oversees U.S. trade embargoes (Office of Foreign Assets Control) and enforces all three

programs at U.S. borders through the U.S. Customs Service.

What Is an Export?ITAR 120.17, EAR 734.2(b)

An actual shipment or transmission of tangible items subject to the EAR or ITAR (commodity, technical data, or software) out of the United States

Releasing (including oral or visual disclosure) “technical data” or software “source code” to a “foreign person,” in the United States (“deemed export”)

Performing technical assistance, training, or other “defense services” for, or on behalf of, a “foreign person,” (including foreign corporations) whether in the United States (“deemed export”) or abroad

“Foreign persons” means everyone other than a US citizen, a permanent resident alien, & certain ‘protected individuals’ (refugees and those with asylum); it includes any company not incorporated in the United States

EXAMPLES OF EXPORTS

Physical Shipments or Hand Carried Items

Release of technical data or software in a foreign country

Release of Source Code to a foreign national in the U.S.

Release of Technical Data to a foreign national in the U.S.

Inspections of U.S. Equipment and Facilities by a Foreign National

Demonstrations, Meetings, and Training

ITAR - U.S. Munitions List (USML)

I - Firearms II - Artillery Projectors III - Ammunition IV - Launch Vehicles, etc... V - Explosives, 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 XI - Military Electronics XII - Fire Control, Range Finder,

Optical and Guidance and Control Equipment

XIII - Auxiliary Military Equipment

XIV - Toxicological Agents and Equipment and Radiological Equipment

XV - Spacecraft Systems and Associated Equipment

XVI - Nuclear Weapons Design and Related Equipment

XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated

XVIII - Reserved XIX - Reserved XX - Submersible Vessels,

Oceanographic and Associated Equipment

XXI - Miscellaneous Articles

EAR - Commerce Control List (CCL)

Category 0 - Nuclear Materials, Facilities and Equipment and Misc.

Category 1 - Materials, Chemicals, Microorganisms and Toxins

Category 2 - Materials Processing

Category 3 - Electronics

Category 4 - Computers

Category 5 - Telecommunications and Information Security

Category 6 - Lasers and Sensors

Category 7 - Navigation and Avionics

Category 8 - Marine

Category 9 - Propulsion Systems, Space Vehicles and Related Equipment

EAR - Commerce Control List (CCL)

Within each category, items are arranged by group. Each category contains the same five groups. Each Group is identified by the letters A through E, as follows:

A - Equipment, Assemblies and Components B - Test, Inspection and Production Equipment C - Materials D - Software E - Technology (Specific information necessary for the

‘development’, ‘production’, or ‘use’ of a product, including ‘technical data’ or ‘technical assistance’. ‘Technical data’ may take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions.)

Examples of Items Covered by Category 1 Materials, Chem, Microorganisms, & Toxins

Category Example

Systems, Equip

& Components

Chemical Agents, including tear gas containing 1% or less of CS or CN, except containers net wt <20gm

Test, Inspection, & Prod. Equip.

Electrolytic cells for fluorine production with a production capacity >250 g of fluorine per hour

Materials Chemical precursors for toxic chemical agents (1C350) (Examples: benzilic acid; sodium bifluoride); human pathogens, zoonoses, and “toxins” (1C351) (Examples: Rickettsia rickettsii, Chlamydia psittaci); animal pathogens (1C352) (Example: goat pox virus); plant pathogens (1C354) (Example: Puccinia graminis)

Software “Software” for process control that is specifically configured to control or initiate “production” of chemicals controlled by 1C350

Technology Technical data for the development of production of any of the above items

Examples of Items Covered by Category 3 - Electronics

Category Example

Systems, Equip

& Components

Mass Spectrometers & Pulse Amplifiers

Test, Inspection, & Prod. Equip.

Equipment for the manufacturing of production semiconductor devices or material

Materials Hetero-epitaxial materials consisting of a “substrate” having stacked epitaxially grown multiple layers of: silicon, germanium, or compounds of gallium or indium

Software Computer-aided design software designed for semiconductor devices or integrated circuits having any of the following: design rules or circuit verification rules, simulation of the physically laid out circuits, or lithographic processing simulators for design

Technology Technical data for the development of production of any of the above items

Example: Shipment of Polygraph(Basic Steps)

Step 1 - Classification of item. Begin by looking in the Commerce Control List under the category of electronics (Category 3) and product group which covers equipment (Product Group A). Then read through the list to find whether your item is included in the list. The ECCN for polygraphs is 3A981.

Step 2 – License requirements. These list the reason that the item is controlled. Polygraphs are controlled for “CC”, or crime control.

Example: Shipment of Polygraph(Basic Steps)

Step 3 – Destination Country. Check to see if a license is required for the country.

Example: Shipment of Polygraph(Basic Steps)

Step 4 – Screening. Certain individuals and organizations are prohibited from receiving U.S. exports. Entity List – BIS list of organizations identified as

engaging in activities related to the proliferation of Weapons of Mass Destruction (WMD.)

Specially Designated Nationals and Blocked Persons List – OFAC list of individuals and organizations representing restricted countries or known to be involved in terrorism or narcotics trafficking.

Unverified List – BIS list of firms for which it was unable to complete an end-use check.

Technical Data & TechnologyITAR 120.10, EAR 772.1

ITAR 120.10 defines “technical data” as

Information . . . required for the design, development production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles; Invention covered by secrecy order; and Software directly related to defense article.

EAR 772.1 defines “technology” as Specific information necessary for the

“development,” “production,” or “use” of a product. “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.

What is Not Controlled (And Is Within the Safe Harbor)

Technical Data & Software (ITAR 120.10, EAR 772.1)

What is not export controlled, “technical data” or “software”?

Publicly available technical data and software

Published for sale, in libraries open to the public, or through patents available at any patent office

General scientific, mathematical, or engineering principles commonly taught in colleges and universities

Available through unlimited distribution at a conference, meeting, seminar, trade show, or exhibition (provided no previous government or industry restrictions on distribution applied)

Arises during or results from fundamental research, where no restrictions on publication or access accepted

Non-technical contract or business documents

What is ‘Fundamental Research’?

The export regulations, both EAR & ITAR, define fundamental research as:

Basic and applied research in science and engineering conducted at US universities, the results of which ordinarily are published and shared broadly within the scientific community.

See Supplement No. 1 to Part 734 for extensive explanatory questions and answer regarding what is not subject to the EAR in the context of University and research laboratory activities.

What is Not Fundamental Research?

Given this definition of fundamental research, University research will not qualify as fundamental research if The university or research institution accepts any

restrictions on the publication of the information resulting from the research, other than limited prepublication reviews by research sponsors to prevent inadvertent divulging of proprietary information provided to the research by the sponsor or to ensure that publication will not compromise patent rights of the sponsor; or

The research is Federally-funded and specific access and dissemination controls regarding the resulting information have been accepted by the University or researcher.

What are the export rules for Software?

Software (except encryption software) is only controlled at the point of export from the U.S. Inside the U.S., any person, including foreign nationals, may purchase and use software.

Distribution inside the U.S. of the software source code is export controlled (“deemed” to be an export to the home country of the foreign national.)

Software is exempt from the export licensing requirements (and, thus, may be shipped out of the country), and “source code” is exempt from licensing requirements (and, thus, may be transferred to a foreign national inside the U.S.), if it qualifies as “publicly available”.

What is “Publicly Available”Software?

Software (and technical data) is published and publicly available when it is available for general distribution either for free or at a price that does not exceed the cost of reproduction and distribution.

If the source code of a software program is publicly available, then the machine readable code compiled from the source code is software that is publicly available.

Special rules apply to encryption software.

What can you take with you overseas?Exception TMP: “Tools of Trade”

Usual and reasonable kinds and quantities of tools of trade (commodities and software) for use by the exporter or employees of the exporter in a lawful enterprise

The tools of trade must remain under the effective control of the exporter or the exporter’s employee (retain physical possession of the item, locked in hotel safe, or guarded)

Encryption commodities and software may be pre-loaded on a laptop, handheld device or other computer or equipment

All tools of trade may accompany the individual departing from the U.S. or may be shipped unaccompanied within one month before the individual’s departure from the U.S., or at any time after departure

License Exception TMPTemporary: “Tools of Trade”

All commodities and software, if not consumed or destroyed in the normal course of authorized temporary use abroad, be returned as soon as practicable but no later than one year after the date of export

No tools of the trade may be taken to Cuba or Sudan

Reference 15 CFR Part 740.9(a)(2)(i) for TMP “Tools of Trade” License Exception

Take Home Messages

Do’s and Don’ts

Do NOT ship any item outside the U.S. without first checking the ITAR and EAR lists to determine if the item is controlled; secure license approval or verify license exception PRIOR to shipment for all controlled items

Do NOT enter into secrecy agreements or otherwise agree to withhold results in project conducted at the University or that involve University facilities, students or staff

Review any Confidentiality/Non-Disclosure Agreements carefully to insure that UC and you are not assuming the burden of restricting dissemination based on citizenship status or securing licenses

Do’s and Don’ts

Do NOT travel to Cuba, Iran, Iraq, North Korea, Sudan, or Syria for research or educational activities without first contacting the campus VC-Research to secure a license from the Office of Foreign Assets Control. These are embargoed countries. A general license for Cuba may cover you; all other countries require a specific license.

Questions?