Happy Groundhog Day!!

OREC – The good, the bad, the ugly

& the ?.2 Feb 2012

Admin Stuff Intro Cell Phones

Be considerate, turn them off or silence the ring tone A lot of information and acronyms

Ask questions if you don’t know, may not be able to answer but will find an answer for you

If you fall asleep, do it quietly, no big ZZZZ’s

We’re glad you are here!

What you get:

The Ugly & the Bad stuffPenaltiesAccess requirementsCountry problems & the big “4”

The Good stuffFundamental researchPublic domainExemptions

The ?The regsWho is in the sandboxWhy?

Don’t call Washington!

Penalties – EAR

Criminal – enforced under the 50 U.S.C. – International Emergency Economic Powers ActCriminal fine up to $1,000,000.00 Jail time up to 20 years

Criminal liability for anyone who “willfully conspires to commit or aids or abets in the commission of” an unlawful act described in the statute

AdministrativeStrict liability – knowledge is not prerequisite for

imposition of an administrative penaltyAdministrative violations must be proven by a

preponderance of the evidence - 51%

Penalties – EAR cont’d

5 year statue of limitations on administrative enforcement cases.

Civil fines up to $250,000.00 per violation or twice the amount of the transaction that is the basis of the violation

Denial of export privileges. Can be any length of time, there is no limit on length they can deny export privileges.

Penalties – ITAR

CriminalEach violation, fine of not more the $1,000,000.00, or

imprisonment of not more than 20 years, or bothCivil

Each violation a fine of not more than $500,000.00

Cases

Prof. J. Reece Roth found guilty 0n 18 counts of export violations, conspiracy and fraud for passing sensitive information to two foreign research assistants from China & IranAlso accused of taking reports & related studies on a laptop to

China during a lecture tour in 2006UTs Export Officer informed Roth that graduate students could

not work on the projectConviction upheld January 2011 by 6th Circuit Court of Appeals4 years in jail and USAF scrapped the research

Dr. Thomas Butler convicted on 47 of a 69 count indictment – 2 export control related, March 2004Unauthorized shipment of Yersinia pestis to TanzaniaTwo years in jail, $37,400 civil penalty & denial of export

privileges for 10 yrs.

Access requirements

EAR & ITAR are differentCitizenship

LPRPhysical Information

Lists and more listsDenied persons list http://www.bis.doc.gov/dpl/default.shtmThe entity list http://www.bis.doc.gov/entities/default.htmEmbargoed Countries

http://www.pmddtc.state.gov/embargoed_countries/index.html

Exclude/Debarred parties list system https://www.epls.gov/Specially designated nationals and blocked persons list

http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx

Statutorily debarred parties http://www.pmddtc.state.gov/compliance/debar.html

Unverified parties list http://www.bis.doc.gov/enforcement/unverifiedlist/unverified_parties.html

Country problems

The big “4” - C, I, S, & SState sponsors of terrorism - DOS

EAR – Supp. 1 to Part 738ITAR – Section 126.1

30 countries on list for various reasonsCheck on-line for latest updates

How to ease the pain

Fundamental research exemptionPublic DomainExemptions

™

Fundamental Research

EAR states – Fundamental research is basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community. (734.8)

ITAR – Fundamental research is defined to mean basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly with in the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls. University research will not be considered fundamental if: The University or its researchers accept other restrictions on

publication of scientific and technical information resulting from the

Cont’d

project or activity, orThe research is funded by the USG and specific access and

dissemination controls protecting information resulting from the research are applicable (120.11)

Publicly Available – EAR (772.1)P.A. Information - Information that is generally accessible to the

interested public in any form and, therefore , not subject to the EAR

P.A. technology and software – Technology and software that are already published or will be published; arise during, or the result from fundamental research; are educational; or are included in certain patent applications. (Educational information must be released by instruction in catalog courses and associated teaching laboratories of academic institutions.

More –

Public domain – ITAR Information which is published and which is generally

accessible or available to the public: Through sales at newsstands and bookstores Through subscriptions which are available to any individual who

desires to obtain or purchase the published information Through second class mailing privileges granted by USG At libraries open to the public or from which the public can obtain

documents; Through patents available at any patent office; Through unlimited distribution at a conference, meeting, seminar,

trade show or exhibition, generally accessible to the public in the U.S.

Through public release in any form after approval by the cognizant USG department of agency

Exemptions

EAR – 16 License exceptions, varied, must consult CCL

ITAR - License to export goods & services for a specified time or value

Licenses are the permission to perform an action related to export control.

May come with stipulations, NDA requirements, reporting

The ?

RegsWho is in the sandbox?Why EC?

What is an export?

An export is a shipment or transmission of items out of the United States.An item, which is collective term, per EAR is a commodity

(something you can hold, has substance, etc.), software or technology.

Then there are also reexports which are also controlledA reexport is a shipment or transmission of items subject

to the EAR from one foreign country to another. This rule causes a lot of foreign companies to “design out”

controlled U.S. commodities from their products.Technology and information – non-tangible can also be

exported.

EAR – Export Administration Regulations

Implements the Export Administration Act of 1979 as amended

International Emergency Powers Act as amendedApplies to dual use & commercial items

Dual Use – items that have both commercial and military or proliferation applications

Informal term to describe items that are subject to the EARVery broad jurisdictional area BUT narrow licensing

requirementsWhy EAR?

National securityForeign policy (anti-terrorism, crime control, regional stability)Non-proliferation (nuclear & chem/bio weapons, missiles)

ITAR – International Traffic in Arms Regulations

Arms Export Control Act of 1976USML – U.S. Munitions List

List of articles, services and technology that are defense related per the USG and subject to ITAR

Gives the President the authority to control the import and export of defense articles and services

Governs arms sales – foreign military and direct commercial

Mandates the registration and licensing of any person, company or entity that engages in the manufacturing , exporting and brokering of defense articles and services.

Statues

EAR – 15 CFR Commercial and Foreign Trade parts 300 to 799Pertinent sections 730-744Printed copy – GPO telephone 866-512-1800 or online

http:www.access.gpo.gov/bis/earorder.htmlCFR online – www.bis.doc.gov or

http://ecfr/gpoaccess.gov Online is your best bet, searchable and most up to date

ITAR – 22 CFR parts 120-130Online

http://www.pmddtc.state.gov/regulations_laws/itar_official.html

Who is in the sandbox

Dept of Commerce – oversight of the EAR & CCLBureau of Industry and Security (aka BIS)Census Bureau – yes that’s right they get into the act too,

for statistics (don’t ignore them, they will get you into jail)Dept of State – oversight of ITAR

Directorate of Defense Trade Controls (aka DDTC)Dept of Treasury

Office of Foreign Asset Controls (aka OFAC) Prepare denied persons & entities lists – who you can not do

business with Also home to the Cuba sanctions and others

Others – DHS (I-129), DOE, NRC, FDA, Interior

Why?

National securityForeign policy (anti-terrorism, crime control, regional

stability)Non-proliferation (nuclear & chem/bio weapons, missiles)SanctionsEconomic & Technology

Don’t call Washington!!!!!!

If you have a question or a problem, do not call Washington

Call ORS, 325-8682 or e-mail – nelewis@fso.msstate.edu

Call University Legal Counsel, 325-8131

Questions?????

Coming Attractions

WebsiteMore training plus an inspection & audit

Baseline of where we areLate March 2012

Remember:

What all else fails, and this is a personal observation, things go better with…...