Trying to Understand Export Control

Laws*

Milton T. Cole, Ph.D.

Assoc. V.P. for Research and Sponsored Projects
Villanova University

*(Borrowing heavily from the expertise and

websites of the University of North Carolina and
The Pennsylvania State University

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Why must we be concerned with
Export Control Laws?
 Certain export control laws may apply to
research activities here and abroad.
 Failure to comply may result in serious
criminal and civil penalties for both
institutions and individual researchers
 Federal Government has increased
enforcement and investigations of
universities since 9/11/2001
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What are Export Control Laws?
Export control laws (“ECL”) are
U.S. federal laws and regulations
that regulate the export of
strategically important products,
services and technologies to foreign
persons.
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Who/What is a “Foreign Person”?

 Any foreign government;

 Any foreign corporation or organization that is not

incorporated or organized to do business in the U.S.;

 Any individual who is not a U.S. citizen or lawful

permanent resident of the U.S. (green card holder)

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What is an “Export”?
 Transfer of controlled technology,
information, equipment, software or services
to a foreign person in the U.S. or abroad by
any means. For example:

 actual shipment outside the US

 visual inspection in or outside the US
 written or oral disclosure
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Recognize Potential Export Control
Issue. Seek Guidance.
 Export control laws are not intuitively obvious.
 All researchers are ultimately responsible for their
own individual compliance.
 At a minimum, researchers need to know how to
recognize that an export control issue may exist,
and then whom to contact for assistance.
 This presentation is a summary designed to provide
sufficient information for researchers to be able to
spot export control issues.
 Contact information for export control experts and
links to online resources appears at the end of this
presentation.
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What is the Intent of Export Control
Laws?

 Restrict exports of goods and technology that could

contribute to the military potential of adversaries
 Prevent proliferation of weapons of mass
destruction (nuclear, biological, chemical)
 Prevent terrorism
 Comply with U.S. trade agreements and trade
sanctions against other nations

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What are the Export Control Laws and
their Federal Agencies?
 State Department: International Traffic in Arms
Regulations (ITAR), which pertain to inherently
military technologies
 Commerce Department: Export Administration
Regulations (EAR), which pertain to “dual use”
technologies (civilian or military use)
 Treasury Department, Office of Foreign Assets Control
(OFAC): Prohibits certain transactions with countries
subject to boycotts, trade sanctions and embargoes

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International Traffic in Arms
Regulations (“ITAR”)

 Covers controlled technologies of an inherently

military nature
 Exporters of defense services or related technical
data are required to register with the federal
government and may need export licenses.
 List of ITAR controlled technologies (“Munitions
Control List”) is available at this website

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Technical Data regulated by ITAR
 Technical Data -- information required for the design, development,
production, manufacturing, assembly, operation, repair, testing,
maintenance or modifications of defense articles on the MCL -- are
regulated by ITAR.

 Examples of Technical Data:

 Blueprints, drawings, plans, instructions, diagrams,
photographs.

 Technical Data Exclusion: “Technical Data” does not include

information concerning general scientific, mathematical or
engineering principles commonly taught at universities or information
in the public domain.
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Export Administration Regulations
(“EAR”)
 EAR covers equipment, materials and other
technologies with both commercial and
military applications, the so called “dual use”
technologies (e.g., chemicals, satellites,
software, computers, etc.)

 EAR’s list of controlled technologies is called

the Commodity Control List (CCL) and is
available at this website
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Office of Foreign Assets Control
("OFAC") Regulations
 OFAC enforces economic and trade sanctions
against specific foreign countries, terrorists,
international narcotics traffickers, and those
engaged in weapons of mass destruction
proliferation.
 Countries currently sanctioned are the
Balkans, Burma, Cuba, Iran, Iraq, Liberia,
Libya, North Korea, Sudan, Syria, and
Zimbabwe.

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Sanctions Programs Enforced by
OFAC can be Highly Restrictive
 Sanctions Programs may restrict:
 Payments (compensation, honoraria, contracts) to
embargoed countries/nationals/entities
 Attendance at/planning of international
conferences
 Surveys and services to embargoed
countries/nationals/entities
 Editing or joint authorship of articles with
nationals of sanctioned countries

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OFAC Enforces Country-Specific
Sanctions Programs
 Before traveling to a sanctioned country, or trading
with or providing services to persons in sanctioned
countries, individuals must first educate themselves
on the specific sanctions program for that country to
determine whether such transactions are permitted.

 OFAC’s website contains up-to-date information on

each of the sanctions programs
 http://www.treas.gov/offices/enforcement/ofac/

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Potential Impact of Export Control
Laws on Research
 If a research project involves controlled technologies,
the researcher may be required to obtain a government
license before:
 Equipment, chemicals or technologies subject to
EAR or ITAR may be sent or taken outside the U.S.
 Foreign researchers or students – even if located in
the U.S. on your campus – may participate in
research involving equipment, chemicals or
technologies subject to EAR or ITAR (known as a
“deemed export”)
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General Rule:
 General Rule: Faculty and employees may not
send or take export-controlled equipment,
chemicals or technologies to foreign persons
without a license from the U.S. Government, unless
an exclusion applies.

 Fortunately, the majority of research will be covered

under an exclusion to the ECL requirements.

 What are the exclusions?

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Exclusions 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, etc.
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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 school, colleges or universities.

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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 the results of which are restricted for
proprietary reasons.
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The Fundamental Research Exclusion
Is Destroyed if:
 The University accepts any contract clause in the
sponsored research contract that:
 Gives the sponsor the right to withhold from
publication information resulting from the research;
 Forbids the participation of foreign nationals; or
 Otherwise operates to restrict participation in research
and/or access to and disclosure of research results.

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University Policy is to Protect
Fundamental Research Exclusion

 By refusing to accept research contract

provisions that:
 limit the researcher’s right to publish or present
research results (a limited prepublication review
by sponsor is ok); or
 limit access or participation in the research by
foreign nationals.

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Applying for and Obtaining an Export
Control License
 The process of determining if a license is
required takes time.
 After applying for a license, it can take several
months to obtain a license from the Commerce
or State Department.

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 Laptop Baggage Exception for
Temporary Export
 Faculty and students who need to take their laptops
out of the country in connection with university
fundamental research may do so under the baggage
exception for temporary export so 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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Export Control Violations Subject to Severe
Penalties Against Institutions and Individuals
 Penalties for ITAR Violations:
 Criminal (Entities): Up to $1M

 Criminal (Individuals): Up to $1M / 10 years prison

 Civil Fines: Up to $500K and Forfeitures

 Penalties for EAR Violations:

 Criminal (Entities): Up to $1M

 Criminal (Individuals): Up to $250K / 10 years prison

 Civil Fines: $10K - $100K

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 Severe Export Control Violation
Penalties (cont.)
 Penalties for OFAC violations:
 Criminal (Entities): Up to $1M

 Criminal (Individuals): Up to $1M / 10 years prison

 Civil Fines: $12K - $55K per violation

 Institution also subject to administrative penalties:

 Termination of export privileges (EAR and ITAR;
and/or
 Suspension and/or debarment from government
contracting (EAR and ITAR)
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