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Export Control Compliancekworman@tamus.edu(979) 458-6124 Kristen WormanAssistant General Counsel

111/121System Policy 15.02System Policy 15.02 Export ControlsAdopted 2009, Re-certified 2012.Policy StatementSystem members must comply with ALL United States export control laws and regulations, including:Department of Commerce Export Administration Regulations (EAR);Department of State International Traffic in Arms Regulations (ITAR); andDepartment of Treasury, Office of Foreign Assets Control (OFAC) Embargoes and Sanctions. 211/122What are Export Controls?Export Controls are U.S. government regulations that govern the export of strategic technologies, equipment, hardware, software or providing technical assistance to Foreign Persons.

Export control laws apply to all activities not just research projects.

311/12Why do we have Export Controls?Advance foreign policy goals;Restrict export of goods and technology that might contribute to the military expertise of adversaries;Prevent the proliferation of Weapons of Mass Destruction (WMD);Fulfill international obligations (e.g., treaties); andPrevent terrorism.411/12Why should Universities be concerned?9/11 changed everything:

There is a growing intersection of cutting edge research with national security and foreign policy.

Many foreign students seek educations from U.S. universities.

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Universities have become a focal point for export control compliance.11/12Developing a Compliance Program611/12Export Control ComplianceTo have an effective compliance program, an organization must establish and maintain an organizational culture that encourages ethical conduct and a commitment to compliance with the law.

U.S. Federal Sentencing Guidelines 8B2.1(a)(2)711/12Federal Sentencing GuidelinesEstablish a culture of complianceIdentify and assess the risksDevelop written policies and procedures to address the riskProvide training and educationKeep lines of communication openMonitor complianceRespond to instances of noncompliance811/12What does this mean?System Policy 15.02 requires system members to:Understand the regulatory frameworkIdentify the risksAppoint an Empowered OfficialAdopt a rule for export control complianceDevelop procedures to address the risk

911/12Understanding the Regulatory Framework1011/12Keys to Understanding Export ControlsWho?What?When?Where?Why?How?11

11/12WHO regulates export controls?Three federal agencies govern U.S. export controls:

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Department of State

Department of Commerce

Department of Treasury11/12U.S. Department of StateDirectorate of Defense Trade Controls (DDTC)Arms Export Control Act of 1976, 22 U.S.C. 2778International Traffic in Arms Regulations (ITAR), 22 C.F.R., Part 120US Munitions List, 22 C.F.R., Part 121

1311/12About the ITARCovers military items, e.g., munitions, defense articles or defense services.Regulates goods and technology designed to kill people or defend against death in a military setting.Defense articles include technical data, which encompasses software, furnishing assistance such as design, engineering and use of defense articles.Defense services include the transfer of information, even if in the public domain.Also includes space-related technology and research; increasing applicability to other research areas such as nanotechnology, new materials, sensors and life sciences.1411/12USML Categories (The ITAR)IV Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines VExplosives and Energetic Materials, Propellants, Incendiary Agents, andTheir ConstituentsVIVessels of War and Special Naval EquipmentVIIIAircraft and Associated EquipmentIXMilitary Training Equipment and TrainingXProtective Personnel Equipment and SheltersXIMilitary ElectronicsXIIFire Control, Range Finder, Optical and Guidance and Control EquipmentXIVToxicological Agents, Including Chemical Agents, Biological Agents, andAssociated EquipmentXVSpacecraft Systems and Associated EquipmentXXSubmersible Vessels, Oceanographic and Assoc. EquipmentXXIMiscellaneous Articles (Software, components, etc.)

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11/12U.S. Department of CommerceBureau of Industry and Security (BIS)Export Administration Act of 1979, 50 U.S.C. 2401-20Export Administration Regulations (E.A.R.), 15 C.F.R., Parts 730-74Commerce Control List (CCL), Supplement No. 1 to Part 774 of the E.A.R.1611/12About the E.A.R.Covers dual-use items, or items designed for a commercial purpose that might also have a military application, e.g., computers, pathogens, civilian aircraft.Covers goods, test equipment, materials, technology, including technical data and assistance, and software.10 categories of different technologies on the Commerce Control List (CCL).Also covers re-export of U.S. origin items outside the U.S.1711/12Commerce Control List (CCL) CategoriesNuclear Materials, Facilities & Equipment, and Misc.Materials, Chemicals, Microorganisms & ToxinsMaterials Processing (i.e., making plastics, metals)Electronics DevelopmentComputer (development and programs)Telecommunications and Information SecuritySensors and LasersNavigation and AvionicsMarinePropulsion systems, Space Vehicles and Related Equipment

1811/12U.S. Department of TreasuryOffice of Foreign Asset Control (OFAC)Trade Sanctions and Embargoes prohibitions on trade with certain countries, e.g., Iran, Syria, Sudan, Cuba, North Korea.Restrictions on travel, financial transactions or transfers to certain end-users.19

11/12NEW Embargoes and SanctionsIran Threat Reduction and Syrian Human Rights Act of 2012 (ITRA) Signed into law on August 10, 2012Prohibits foreign subsidiaries of U.S. companies from engaging in transactions that a U.S. company cannot engage in.Implements visa restrictions for Iranian citizens seeking higher education in the energy, nuclear science, nuclear engineering or related fields.

2011/12Identify the Risks2111/12WHO is a Foreign Person?For export control purposes a Foreign Person includes:Persons in the U.S. in non-immigrant status (e.g., H-1B, H-3, L-1, J-1, F-1 Practical Training, L-1) Persons unlawfully in the U.S.It does NOT include:U.S. CitizensPermanent Residents (i.e., green card holders)Persons granted asylum or refugee status

2211/12WHAT is an Export?Any item, technology or software that is sent from the United States to a foreign destination:E-mail, phone, mail, travel, package, conference presentation, face-to-face, visual inspection, hand carried items laptop, memory devices23

11/12Exports in a University SettingThese items may include:Unpublished research findingsFunds that are transferred to restricted countries, entities or personsBiological specimensChemicalsElectronics ComputersTelephonesSensors

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11/12WHAT is a deemed export?A deemed export is the release of controlled information, technology or software to a foreign person in the United States.

Export control regulations deem this transfer of information, technology or software to be an export to the home country of the foreign person.

2511/12Examples of Deemed ExportsDeemed Exports might include:

Visual inspection by foreign persons of U.S.-origin equipment and facilities;

Oral exchanges of information; or

Access to a computer that possessesexport controlled information/technology.

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11/12WHEN should I be concerned about export controls?NOW U.S. export control regulations affect many activities on university campuses, including:Student EnrollmentEmployee HiringResearchPurchasingTravelShipping27

11/12Red FlagsDoes your activity involve:Shipping equipment to a foreign country?Collaborating with foreign colleagues in foreign countries?Training foreign persons to use equipment?Working with a country subject to a U.S. embargo?An RFP marked "Export Controlled"?A sponsor who is requiring pre-approval rights over publications or the participation of foreign nationals?Sensitive technology that may have military applications?

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11/12Good News!Exemptions & ExclusionsPublic Domain/Publicly AvailableFundamental ResearchEducational InformationTools of the Trade29

11/12Exemptions & ExclusionsPublic Domain/Publicly Available already published, e.g., library books, magazines, etc.Fundamental Research results of basic or applied research conducted in the U.S., which are shared widely without restrictionEducational Information materials and information found in course curriculaeTools of the Trade materials or equipment that enable you to perform your job when travelling abroad3011/123111/12WHY do I Need to Comply with Export Control Regulations? WHY do I Need to Comply (contd)?ITS THE LAW!Severe criminal and civil noncompliance penalties and sanctions for individuals as well as institutions and corporations.Up to $1MM for institutions/corporations and up to $250,000 for individualsUp to 10 years in prisonTermination of export privilegesSuspension and/or debarment from federal government contractingLoss of federal funds

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11/12Recent Enforcement ActionsDr. J. Reece Roth, University of Tennessee charged with 15 counts of violating the Arms Export Control Act; sentenced to 4 years in prison

Dr. Thomas Butler, Texas Tech indicted on 69 counts; sentenced to 2 years in prison for making fraudulent claims and unauthorized exports (plague bacteria)

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11/12Personnel & Procedures3411/12HOW do I get started?THREE steps towards compliance:

Appoint an Empowered Official

Adopt a rule

Develop procedures to address the risks

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11/12Who do you call?

3611/12Appointing an Empowered OfficialThe Empowered Official is responsible for export control compliance and oversight for your agency or campus.They must be knowledgeable of the regulations (or, at a minimum, trainable);They must be aware of your agency/campus activities; andThey must have authority to stop any activity that may result in a violation of law.3711/12Adopting a RuleWhat should be included?The position title of your Empowered Official (e.g., Vice President for Research, Compliance Officer, CFO, etc.)Descriptions of how your agency/campus will handle potential export control risks and contact office (e.g. Restricted Party Screening; travel or shipping requests; research grants/contracts etc.)Less is More!3811/12Developing Procedures to Address RisksReview ProcessesTravel Who is going? Where? AND what are they taking?ShippingIn-House v. Third Party (UPS, Fed-Ex, etc.)Screening Procedures Visual ComplianceTechnology Control PlansEquipmentResearch Projects39

11/12WHERE do I look for guidance?You do NOT need to re-invent the wheel.

You just need to find the wheel that fits.

Remember: One size does NOTfit all!40

11/12Export Control ResourcesSystem Resources:

System OfficesSystem Ethics and Compliance OfficerOffice of General CounselTexas A&M Universityhttp://vpr.tamu.edu/resources/export-controls/resourcesTexas A&M University Corpus Christihttp://research.tamucc.edu/compliance/export.html TEEShttp://tees.tamu.edu/researchcompliance/export-controls/ OSRShttp://osrs.tamus.edu/contracts-and-grants/project-administration/compliance/ 4111/12Export Control Resources (contd)Federal Agency Websites:

U.S. Department of Commerce, Bureau of Industry and Security (BIS)http://www.bis.doc.gov/index.htmExport Management and Compliance Program (EMCP)BIS Compliance Guidelines: How to Develop an Effective Export Management and Compliance Program and Manual (166 pages)BIS Seminars and TrainingU.S. Department of State, Directorate of Defense Trade Controls (DDTC)http://www.pmddtc.state.gov/index.htmlU.S. Department of Treasury, Office of Foreign Asset Control (OFAC)http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx

4211/12Export Control Resources (contd)Higher Education Compliance Alliancehttp://www.higheredcompliance.org/

Other University Websites:Stanford Universityhttp://export.stanford.edu/University of Texas Austin http://www.utexas.edu/research/osp/export_control/University of Tennessee Knoxville http://research.utk.edu/exportcontrol/University of South Floridahttp://www.research.usf.edu/dsr/export-controls/export-controls.aspWayne State Universityhttp://research.wayne.edu/export-control/ 4311/12Contact InformationSystem Ethics & Compliance OfficerJanet Smalleyjanetsmalley@tamus.edu (979) 458-6008

Office of General CounselKristen Wormankworman@tamus.edu(979) 458-6124Texas A&M UniversityBrad Krugelbkrugel@tamu.edu(979) 458-1467Texas A&M University Corpus ChristiErin Shermanerin.sherman@tamucc.edu(361) 825-2497TEESSean Rubinosrubino@tamu.edu(979) 458-76524411/1244Questions?45

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