export control regulations and associated problems

Export Control Regulations and

Associated Problems

Sponsored by University Research Council

Presented by

Neta Fernandez Pamela Wood Steve Horan

“War demands secrecy; science thrives onopenness. How can a free society balancethose competing demands?”

Sherwood Boehlert (R-NY)House Science Committee ChairmanOctober 10, 2002

What is Export Control

• Federal laws to protect items, technical data, and information important to U.S.

• More important during times of war or heightened national security

Purpose of Export Control

• security

• economy

• foreign policy

Main objectives are to protect U.Snational:

Export Control Regulations

• In place for > 20 years

• More prominent since 9/11

• Heightened scrutiny

Increased concern since 9/11 that

open publication of scientific and

technological results may provide

unwitting assistance to nations or

terrorist groups in developing

weapons of mass destruction.

Concern

Large presence of foreign students andscientists in U.S. universities increase thechance that the educating and training ofthese foreigners in basic skills may be transferred to other countries when these students return to their home countries.

Also a problem when U.S. citizen is inforeign country (emails, phone, etc)

Foreign Students/Scientists

Examples of Concern

2000,Co-operative Research Center forBiological Control of Pest Animals (CRC0) in Australia inadvertently geneticallymodified mousepox virus to be able toinfect mice that had previously been vaccinated. Research results were openly published.

During an interview, the CEO of CRCSaid:

“If we genetically modified Smallpox in a similar way to the way we modified MousePox, there’s every chance it would become a more virulent and probably a more lethal virus than it is at the present moment.”

Would terrorists be interested in this info?

2002, article published by researchersat the State University of NY at StonyBrook assembled functional poliovirusfrom chemical sequences ordered out ofa scientific mail-order firm. Lead scientistdescribed the experiment as graphic proofthat bioterror agents can be made withouta terrorist ever having access to dangerousmicrobes.

Example of Concern

Would terrorists be interested in this info?

2001, the full genome of Yersinia pestis,The bacteria that causes bubonic and Pneumonic plague, was published in the Journal Nature.

Would terrorists be interested in this info?

Example of Concern

A symposium where researchers will share

information on biological agents. People

from all over the world have been invited.

Symposium will take place in Albuquerque.

Would terrorists be interested in this info?

Example of Concern

1. Department of Commerce (EAR)

• 15 CFR 730-774; controlled technologies are at 15 CFR 774, supplement I

Who Controls and Enforces

Two departments control export control:

2. Department of State (ITAR)

• 22 CFR 120-130; controlled technologies are at 22 CFR 121.1

Who Controls and Enforces

Department of Commerce (EAR)

• Controls export of all commodities, technologies, and software

• Maintains Commerce Control List

– lists technologies and countries where these items cannot be

exported

Department of State (ITAR)

• Controls export of “defense articles and defense services”

• Includes data and Intellectual Property as well as physical devices & software

• Provides and maintains the U.S. Munitions List (in conjunction with DOD)

U.S. Munitions List

Includes items such as:• firearms, ammunition, explosives• military vehicles (land, air, sea)• spacecraft (including nonmilitary)

• military and space electronics• protective personnel equipment• guidance and control equipment• components and auxiliary equipment• miscellaneous articles related to military equipment

U.S. Munitions List

Export of any item or technology on list

REQUIRES specific authorization from

State Department

It is the policy of the United States to

deny licenses, other approvals, exports

and imports of defense articles and

defense services to certain countries

ITAR Restricted Countries

• Includes countries such as Afghanistan, Belarus, Cuba, Iran, Iraq, Libya, North Korea, etc*

• Countries with respect to which the United States maintains an arms embargo (for example, China)*

• Exports and sales prohibited by United Nations Security Council embargoes

• Exports to countries which the Secretary of State has determined to have repeatedly provided support for acts of international terrorism (such as Cuba, Iran, Iraq, Libya, etc)*

*These are not complete lists of countries and they change on a daily basis!

ITAR Restricted Countries

WHAT IS AN EXPORT

Any oral, written, electronic or visual disclosure, transfer or transmission outsidethe US to anyone, including a US citizen,of any commodity, technical data, technology, or software

Transfer of a controlled commodity, technology, or software to a non US entity wherever located

What is Technical Data

• Information which is required for design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. Includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation

• Classified information relating to defense articles and defense services

What is Technical Data

• Information covered by an invention secrecy order

• Software directly related to defense articles

Software Includes

• System functional design, logic flow, algorithms, application programs, operating systems and support software for design, implementation, test, operation, diagnosis and repair.

• Export of software usually requires a technical data license

What is a System?

A combination of end-items, components,

parts, accessories, attachments, firmware

or software, specifically designed,

modified, or adapted to operate together to

perform a specialized military function.

Discussing or disclosing technology tosomeone in the US who is not a citizen or permanent resident is considered a“deemed export”

Big problem for University

Deemed Export

Examples

• Send to foreign national in foreign country

• Send to U.S. citizen in foreign country

• Disclose to foreign national in U.S.

NOTE: Includes email, phone conversations, reports or any means of communication

EAR Restricted Countries

*Not a complete list, changes daily. Also interesting to note that ITAR and EAR restricted countries are not the same

This list includes countries such as CubaIran, Iraq, etc*

Examples of Violations

Oral, written, electronic or visual disclosure, shipment, transfer or transmission outside the US to anyone (even US citizen) of any commodity, technology, (information, technical data, or assistance) or software codes

Examples of Violations

Oral, written, electronic or visualdisclosure, shipment,transfer or transmission to any person or entity of a controlled commodity, technology or software/codes with an intent to transfer it to anon-US entity or individual, wherever located (even to foreign student or colleague at NMSU)

Examples of Violations

Transfer of these items or information to a foreign embassy or affiliate

Examples of Violations

• Foreign researcher or foreign student walks through a lab and sees piece of paper with research results

• Can pertain to equipment within a lab

• Telephone calls, faxes, emails, etc

Good News

Institutions of higher education have been

granted an exemption from ITAR as long

as the project is fundamental research

What is Fundamental Research?

Basic or applied research in science and/or

engineering at accredited institution of

higher learning in the US where resulting

information is ordinarily published and

shared broadly in the scientific community

If restrictions on publishing research, youcannot:

• involve foreign students or faculty• discuss the research with others• share knowledge overseas, even with an American

(Without prior approval of the sponsor)

Restrictions

Key to IHE Exemption

Most important thing is:

University has publication rights!!

Research results reside in public domain

DO NOT ACCEPT RESTRICTIONS

ON PUBLICATION RIGHTS

Exception

If it involves export of license controlled

tangible items or software or if the

export is to an embargoed country, the

fundamental research exception may not apply

Public Domain 22 CFR 120.11

Information that is publishable and accessible to the public through:

• sales at newsstands and bookstores

• subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information

Public Domain (contd)

• second class mailing privileges granted by U.S. government

• at libraries open to public or from which public can obtain documents

• patents available at any patent office

Public Domain (contd)

• unlimited distribution at conference, meeting, seminar, trade show or exhibition, generally accessible to public in U.S.

• public release in any form after approval by cognizant U.S. government department or agency

• fundamental research

Bad News

• Export control laws place heavy responsibility on PI and administrator

• Violations of export control laws can result in fines and jail time for PI and/or administrator

• Ignorance does NOT protect the University or PI from liability

Really Bad News

Export control regulations apply whether

there is a specific reference in the award

or not!

This requires PI to be very knowledgeableabout export control regulations.

PI Responsibility

• PI responsibility to ensure that the end use and end-user of an export complies with U.S. export laws

• Determine if export is on the export controlled lists/requires license

• Know your customer

• Know the country of origin of your students

• Ignorance does NOT protect the University or PI from liability

PI Responsibility

Important Note

For Satellite research:

• Experimental is exempt

• Operational is NOT exempt

* TDRSS at NASA site is not exempt

Penalties and Fines

Both ITAR and EAR authorize stiff

penalties for violations and non-

compliance and include the following

administrative, civil and criminal

options

Civil penalties up to $500,000 each violation

Criminal penalties up to $1,000,000 each violation

Imprisonment up to 10 years

Dr. Horan

OR BOTH

Penalties and Fines

Both PI and administrator can be

fined and serve jail time

Who is Penalized

Effects of Export Control Laws

Export regulations have potential to:

• harm quality of university research

• restrict publication rights

• prohibit international collaboration

• prevent foreign students to assist

What Can We Do?

Pay close attention to proposals from:

• NASA• DOE• DOD• Industrial contractors to these

agencies• USDA (effective 6/2003)

USDA

Plum Island Animal Disease Center, which conducts research on animal

disease agents, will be transferred

to Department of Homeland Security.

Other Transfers

• Chemical, biological, and nuclear programs currently in National Nuclear Security Administration• Biological and computing programs currently in Office of Science• Radiation measurement laboratory currently in Office of Environmental Management from DOE

All scheduled to transfer on 6/1/03

What Can We Do?

• Ensure University has right to publish

• Attach letter (See attachment A) with each proposal saying as University, we do not accept restrictions on publishing of research results

• Educate faculty and administrators of risks

What Can We Do?

• Not accept proposal or award clauses that place controls on foreign nationals in research

• Require open, immediate dissemination of technical information about space research projects in order to continue to qualify for the public domain exception in ITAR– allowing all foreign nationals to participate

What Can We Do?

• Refuse to attend “US citizen only meetings” or to sign the DD2345, all of which undercut any fundamental research exemption and lead to fragmentation within the research community

• Create committee to review/screen manuscripts prior to publication

NMSU Procedure

• Review RFP closely for requirements

• Include in proposal the verbiage from Attachment A*

• PI signs the Export Control Assurance, at award stage (Attachment B)

* If electronic submission, include in terms and conditions

Dangerous Clauses

The following pages contain clauses

that can cause problems to the

University

Example

The parties agree that research findings and technologydevelopments in optical interferometry technology under thisagreement may constitute a significant enhancement to the national defense, and to the economic vitality of the U.S.Accordingly, access to important technology developments under this agreement by Foreign Firms or Institutions mustbe carefully controlled. The controls contemplated in thisarticle are in addition to, and are not intended to change orsupersede, the provisions of the International Traffic in ArmsRegulation (DoD 5220.22-R) and the Department of CommerceExport Regulation (15 CFR pt.770 et seq.)

Example

The Recipient shall comply with all U.S. export control lawsand regulations, including the International Traffic in ArmsRegulations (ITAR), 22 CFR Parts 12-130, and the ExportAdministration Regulations (EAR), 15 CFR Parts 730 through799, in the performance of this award. In the absence of available license exemptions/exceptions, the Recipient shall beresponsible for obtaining the appropriate licenses or otherapprovals, if required, for exports of hardware, technical data,and software, or for the provision of technical data orsoftware.

The Recipient shall be responsible for obtaining export licenses,if required, before utilizing foreign persons in the performanceof this contract…..

Example

Army Regulations AR530-1 and 360-1 prescribe Departmentof the Army policies and clearance procedures with respect to release of any information on Army contracts. This informationcan include news stories, articles, sales literature, advertisements,Radio-TV spots, etc., on unclassified contracts as well as on the Classified contracts. Army Materiel Command Supplement 1 To AR 530-1 requires Operations Security review and approval prior to public release of an information on AMC contracts.

Example

The Army requires the Contractor to obtain ContractingOfficer’s review and approval prior to making any publicRelease of any information on the project funded by thisContract.

Example

Contractor agrees to employ only American citizens andpermanent residents of the U.S. on this project. Foreignnationals with proper visas may be considered for assignmentson this project, but only after receiving approval from NASA.Detailed background investigations and security clearanceswill be required before such approval can be given.

Helpful Websites

Missile Technology Control Regime (MTCR) Annex is at http://www.fas.org/nuke/control/mtcr/text/

Good ITAR page is at http://usexportcompliance.com/Click on regulations to get to ITAR page

ITAR CFR (has the US Munitions List) is at http://www.pmdtc.org/reference.htm#ITAR

Editorial in New Scientist

“That this mind-boggling quantity of

information is going to transform medicine

and biology is beyond doubt. But could some of it, in the wrong hands, be a recipe

for terror and mayhem?”

Bioethicist Arthur Caplan (University of Pennsylvania)

“We have to get away from ethos that knowledge

is good, knowledge should be publicly available,

that information will liberate us…Information

will kill us in the techno-terrorist age, and I think

it’s nuts to put that stuff on Web sites.”