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General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
General Instructions On Export Controls In Pdf Policies 8 3 2009
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General Instructions On Export Controls In Pdf Policies 8 3 2009

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Corporate Research and Development, Colleges and Universities encounter somewhat unique circumstances in the conduct of their activities and this material will help ensure that US government …

Corporate Research and Development, Colleges and Universities encounter somewhat unique circumstances in the conduct of their activities and this material will help ensure that US government compliance rules are not overlooked (including disclosures made in the USA as well as Exported and Technical Data disclosed to unauthorized non-US personnel.

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  • 1. TRAINING AND COMPLIANCE CONTROLS FOR SPECIAL ORGANIZATIONS: An Introduction to the fundamental rules and regulations that deal with United States Government Control over Technology, Research Information, Restricted Parties, related Trade Sanctions, Prohibitions, and Embargos applicable to Educational Organizations and Research Universities INTRODUCTION The United States Government has established a series of controls that are intended to enhance the national security of the USA, address issues of potential misuse of technology developed by persons (e.g. Citizens, Legal Residents, and Other Authorized Parties) in the United States or by enterprises under the control of a ―United States Person.‖ These regulations are issued and promulgated by a number of Departments and Agencies that have authority over the subject matter. In some instances we are also dealing with ―dual use‖ articles; things that may have a Civil and Military application and therefore must also be subject to controls on access to the technology. Universities, Colleges and other educational organizations have additional responsibilities because they have ―fundamental research‖ capabilities that are both funded by government grant programs or contracts and may also enroll employees and students from other nations. In the case where work is performed in the United States, and not physically exported from our domestic sites, this can be defined as a ―deemed export‖ as the technology has been communicated with parties that may subsequently pass along the information or return to their primary country of citizenship or residency that may be dis-allowed without the issuance of an ―export license‖ issued by the appropriate government agency. THE SYSTEM OF CONTROLS OF THE UNITED STATES I. THERE ARE THREE BASIC SETS OF EXPORT CONTROLS AND TRADE SANCTIONS AND EMBARGO REGIMES ESTABLISHED BY AGENCIES OF THE UNITED STATES GOVERNMENT: A. The International Traffic in Arms Regulations (ITAR), controlled by the United States Department of State, Established under, Title 22 Code of Federal Regulations, Sections 120 through 130. 1. The ITAR Regulations Covers ―Munitions‖ and other Military Application Technologies, both offensive and defensive as determined by the Directorate of Defense Trade Controls (DDTC); intent doesn‘t apply as the sole element for control. 2. Export Review and Issuance of Specific Licensing of such goods is done by the Directorate of Defense Trade Controls (DDTC). Copyright - Export Experts LLC - 2009 1
  • 2. I. THERE ARE THREE BASIC SETS OF EXPORT CONTROLS AND TRADE SANCTIONS AND EMBARGO REGIMES ESTABLISHED BY AGENCIES OF THE UNITED STATES GOVERNMENT (Continued): B. Most Exports fall under the scope of the Export Administration Regulations (EAR), controlled by the United States Commerce Department, Bureau of Industry and Security (formerly known as the Bureau of Export Administration [BXA]) under Title 15, Code of Federal Regulations, Sections 730 through 774. 1. Common elements to be aware of are identified as ―Dual Use Technologies‖ meaning that they have a Primary Commercial Application, but also have the potential of Military Use (hence the phrase ―Dual Use Application.‖ 2. The preponderance of all licenses issued is done by the Licensing Section of the Bureau of Industry and Security (BIS), (as noted above, formerly referred to as the BXA). C. Additional controls, and all too often overlooked are those promulgated by Office of Foreign Assets Control (OFAC) Regulations, a section of the Treasury Department of the United States Government, found under Title 31 Code of Federal Regulations, Sections 500 et seq. 1. OFAC is responsible for the Imposition of Trade Sanctions, Restrictions, and Trade and Travel Embargoes Aimed at Controlling Terrorism, Drug Trafficking and Other Illicit Activities (as defined by statue, policy declaration, or other law or regulation.) 2. OFAC Prohibits Payments, the Providing Services or Anything of Value to Nationals of Sanctioned Countries and Some Specified Entities/ Individuals (foreign nationals and U.S. citizens may be sanctioned or embargoed), and identified as ―Denied Parties or Denied Persons.‖ 3. OFAC may also Prohibit Travel and Other Activities with Sanctioned or Embargoed Countries and Individuals (as may depend on the terms of the sanctions issued or embargo declared). Such restrictions may be issued even when an exclusion (or exception) to the ITAR and EAR regulations may appear to be applicable. II. GOALS AND OBJECTIVES OF THE OF EXPORT CONTROLS, TRADE SANCTIONS, RESTRICTIONS AND EMBARGOES ISSUED BY THE DEPARTMENTS AND AGENCIES OF THE U.S. FEDERAL GOVERNMENT A. The primary purpose of these activities is to advance the goals set by the Foreign Policy of the United States of America. Copyright - Export Experts LLC - 2009 2
  • 3. II. GOALS AND OBJECTIVES OF THE OF EXPORT CONTROLS, TRADE SANCTIONS, RESTRICTIONS AND EMBARGOES ISSUED BY THE DEPARTMENTS AND AGENCIES OF THE U.S. FEDERAL GOVERNMENT (Continued) B. The additional purpose for the export controls and related sanctions is the restriction on the ―Transfer or Distribution of Goods and Technologies‖ that could contribute to the advancement of the military capabilities or potential and/or economic superiority of other countries. These controls apply to both friendly nations (example: Singapore) and adversaries (example: Iran.) C. The primary objective to be attained is the prevention of the proliferation of Weapons of Mass Destruction (WMD) (e.g. nuclear, biological, chemical technology.) D. Further, such controls and prohibitions act to prevent of Acts of Terrorism, Espionage, and other illicit activities (e.g., drug trafficking.) E. The system of sanctions, prohibitions, limitations and restrictions act in alignment with the Treaty Obligations of the United States, execution of Executive Agreements, comply with Bi-Lateral Agreements and such actions as necessary to fulfill other International Obligations of the United States. E. In the ―Post September 11, 2001 environment‖, such ―Export Controls & Trade Sanctions‖ that are seen as necessary for effective anti-terrorism tools – including significant increased focus on Research Universities – and on enforcement of special areas of concentration: 1. Greater Focus on the Life Sciences – Dealing with biological agents and toxins. 2. Export Controls coupled with provisions of the USA PATRIOT Act (2001) and the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 Governing Biologicals and Chemical items. a. Export Controls of the United States government cover a wide range of Biologicals and Chemicals than on a select group of agents or toxins (including compounds.) b. All involved persons are responsible and must personally educate, evaluate and comply with all statutory and regulatory regimes that have been established and apply. Copyright - Export Experts LLC - 2009 3
  • 4. II. GOALS AND OBJECTIVES OF THE OF EXPORT CONTROLS, TRADE SANCTIONS, RESTRICTIONS AND EMBARGOES ISSUED BY THE DEPARTMENTS AND AGENCIES OF THE U.S. FEDERAL GOVERNMENT (Continued) G. ―Export Controls‖ are such controls that are introduced and imposed for a large number of reasons, including: National Security, Chemical and Biological Weapons Non-proliferation, Missile Technology Control, Anti- terrorism, & Crime Control. III. BACKGROUND: THE BASICS OF GOVERNMENT REGULATION A. ITAR and EAR Cover U.S. Origin Items (e.g., equipment, chemicals, biological, and other products and materials, software code, computers – ―Items or Materials‖) that might be located anywhere if; 1. Identified on the United States‘ Munitions List (Reference: ITAR, Title 22 Code of Federal Regulations, Section 121.1) and even if not contained on the USML, anything with a ―military application‖ as shall be determined by the United States‘ State Department‘s Directorate of Defense Trade Controls (DOS/DDTC) Such determination shall not be made by the intend of the researcher but only by DOS/DDTC. OR 2. If the article or material or substance is identified on the Department of Commerce, Bureau of Industry and Security‘s (DOC/BIS) Commerce Control List (EAR, Title 15 Code of Federal Regulations, Section 774) AND RELATED ELEMENTS OF CONTROL 3. Activities that are defined as ―Defense Services‖ (covered by ITAR): e.g., training (such as lectures or consulting) on how to use defense articles (under the authority of Title 22 Code of Federal Regulations, Part 120.9), and 4. ―Technologies and/or Technical Data‖ (applicable under both the EAR and ITAR): such information beyond basic and general marketing materials on use, development, or production of controlled items or materials (as may be referenced in Title 15 Code of Federal Regulations, Sections 772 and 774, and Supplements 1 and 2; and as may be referenced in Title 22 Code of Federal Regulations, Section 120.10. Copyright - Export Experts LLC - 2009 4
  • 5. III. BACKGROUND: THE BASICS OF GOVERNMENT REGULATION (Continued) a. An important point to make is that not all export controlled items or materials are controlled for ―use technology‖ purposes, B. Most Research and Teaching on College and University Campus sites in the United States are impacted -- some information transfers that take place on site (e.g. on educational campus locations and laboratories) and also transfers made abroad – may possibly qualify for a ―Regulatory Exclusion‖ or ―License Exemption‖ status (subject to confirmation prior to disclosure.) C. However, due to a number of protected proprietary restrictions, fewer commercial business activities may qualify for such exclusions and /or exemptions from controls. D. When a determination is made that an exclusion(s) and/or exemption(s) does not apply to the circumstances and a government license (i.e. ―export license‘) is required it is an absolute requirement that such a license must be obtained prior to any disclosure or transfer. 1. Important and critical information includes the fact that before ―Export‖ (or ―Re-Export‖) – the transferring abroad in any medium -- to anyone regardless of Nationality – such controlled items, information or materials -- or such controlled ―Technologies‖ and/or ―Technical Data‖ And 2. Before an activity determined to be considered a ―Deemed Export‖: e.g. transferring to foreign nationals (other than permanent residents of the United States) or to Embassies in the United States (even if located on an educational site, College or University campus), in any Medium -- controlled information and/or Technologies and/or Technical Data — Is ―Deemed‖ to equate with s transfer to the person‘s Country of Citizenship (nationality.) and is subject to control. a. ―Deemed Exports‖ apply to such controlled technologies and/or technical data and/or software code -- not to related controlled items or materials without any accompanying Information b. The requirement of the regulations is that sufficient security must be Implemented on facilities, educational locations, College and University campus sites in the United States to prevent unlicensed ―Deemed Exports,‖ Copyright - Export Experts LLC - 2009 5
  • 6. III. BACKGROUND: THE BASICS OF GOVERNMENT REGULATION (Continued) F. If the license is required and denied, then the export or ―Deemed Export‖ is disallowed and therefore prohibited 1. Understand, exporting is a privilege -- not a right, G. Violations of the laws and regulations are subject to Civil and Criminal Penalties Against Individuals and Institutions – results that can also result in the loss of funding, loss of export privileges, and loss of deemed export privileges (for substantial periods of time.) Such references can be found within the following: 1. Department of State (ITAR): (Individual and Entity) in Title 22 United States code, Section2778 (c) and (e)) a. Criminal Fines of up to $1M per count and/or up to 10 Years in Prison for each count or violation b. Civil Fines of up to $500K per count and forfeitures for each count or violation 2. The United States Department of Commerce (Export Administration Regulations, in Title 15 Code of Federal Regulations Section 764.3(a) and (b)): a. Criminal Fines for organizations of up to $1M per count or charge, or up to 5 times the Value of the Export (Note: There are proposed changes that would increase penalties to $5M or 10 times the value) b. Criminal Fines for Individuals are currently set at up to $250K per count or charge and/or up to 10 Years in prison for each violation (Note: There are proposed changes would increase fiscal penalties to $1M per violation) c. Civil Fines can range from a minimum of $10K up to $120K per violation (Note: There are proposed changes would increase such fines to $500K per violation) Copyright - Export Experts LLC - 2009 6
  • 7. III. BACKGROUND: THE BASICS OF GOVERNMENT REGULATION (Continued) 3. The Office of Foreign Assets Control (OFAC), Department of the Treasury Regulations, found in Title 31 of the Code of Federal Regulations, Section 501.701), includes the following fines and penalties, a. Criminal Fines for organizations or entities can range up to $1M per violation. c. Criminal Fines for Individuals can range up to $250K per charge and /or up to 10 Years in prison per charge or violation. d. Additionally, there can be Civil Fines ranging from $12K to $65K per violation. H. It is of importance to note that violations affect reputations of individuals, organizations, enterprises, educational institutions and more and can also result in the suspension and loss of federal contracting privileges for these individuals and institutions. I. The regulations of the United States government are complex – and as such require both technical and regulatory awareness, knowledge, and expertise to apply correctly at all times, J. If possible it is best to attempt to qualify for exclusions from the controls – Educational Institutions, Laboratories, Colleges and Universities focus on t these opportunities: 1. Evaluate all information transfers and or data and technology disclosures under the rules for potential exclusions first. 2. Special attention to exports headed abroad consisting of physical items or materials require even greater reviews of applicability of Controls. K. All involved must understand and adhere to prerequisites for exclusions or controls that may be applied. IV. THE FUNDAMENTAL RESEARCH EXCLUSION A. The United States Government offers a ―Fundamental Research Exclusion‖ that can be found in both the Department of Commerce(EAR) and Department of State (ITAR) regulations; See: Title 22 Code of Federal Regulations, Section 120.11(8); and Title 15 Code of Federal Regulations, Sections 734.8(a) and (b)). These exclusions apply to the following: 1. Information -- Not to Items or Materials Copyright - Export Experts LLC - 2009 7
  • 8. IV. THE FUNDAMENTAL RESEARCH EXCLUSION (Continued) 2. Resulting From -- Or Arising During (Note, this is an Open Issue, dealing with Already Existing and Used During…(see below) 3. Basic and Applied Research in Science and Engineering 4. Activities Conducted at an Accredited Institution of Higher Education (DOC/EAR) or Higher Learning (DOS/ITAR) 5. Fundamental Research Performed at a site located in the United States. (Special Note: This exclusion does not apply abroad with limited, specific exceptions under DOS/ITAR for Satellites and Related Technology, and is subject to special conditions. (For reference, see Title 22 Code of Federal Regulations, Section 121.1 XV(a) or (e), 123.16(b)(10) (equipment), and 125.4 (services, information; instruction)) 6. The Fundamental Research Exclusion also applies where ―the Information Is ordinarily published and shared broadly In the scientific community.‖ And (caution); 7. The subject matter is not subject to proprietary or U.S. Government Publication or Access Dissemination Controls (e.g., re: approval of publications and foreign national participation) B. The Fundamental Research Exclusion also allows ―U.S. Universities to include Foreign Faculty, Students, and Visitors in Research Involving Creation of Controlled Information on Campus in the U.S. Without a License.‖ C. Once created in fundamental research, the information may be transferred abroad without application of U.S. export controls. D. The point to be made is that ―Fundamental Research Information Is Public In Nature – and Is Excluded (Not Just Exempted) From Controls‖ Copyright - Export Experts LLC - 2009 8
  • 9. IV. THE FUNDAMENTAL RESEARCH EXCLUSION (Continued) E. Based on the National Security Defense Document 189 (Issued: 1985) 1. Fundamental Research is ―Basic and Applied Research in Science and Engineering, the Results of Which Ordinarily are Published and Shared Broadly Within the Scientific Community, as Distinguished from Proprietary Research and From Industrial Development, Design, Production and Product Utilization, the Results of Which Ordinarily are Restricted for Proprietary or National Security Reasons‖ 2. The Classification Process is the Appropriate Means of Securing Information Related to ―Fundamental Research‖ by Colleges and Universities When Security is Warranted -- Otherwise, Except as Required by Statute, ―No Restrictions May Be Placed Upon The Conduct or Reporting‖ Of Fundamental U.S. University Research, Which Should Be Open and Freely Disseminated Because It Supports Our Nation‘s Security F. Commercial Companies and Independent Research Institutes have similar (Department of Commerce – EAR) (not Department of State - ITAR) Exclusion When Research Is Not Subject to Publication / Access / Dissemination Restrictions (See: Title 15 Code of Federal Regulations Section 734.8(d), (e)). V. ‘DEEMED EXPORTS’ IN FUNDAMENTAL RESEARCH A. The Department of Commerce Inspector General (Also Adopted by Energy, Defense and State Inspector Generals) Found the following to be the facts: 1. A ―Deemed Export License‖ is required for transfer of controlled ―Use Technology‖ (Controlled Information Beyond Basic and General Marketing On the Installation, Operation, Repair, Maintenance, Refurbishing, and Overhaul of Controlled Equipment or Software Code) In Any Medium (Even Through Careful Observation and/or Demonstration) to Foreign Nationals on Campus in Fundamental Research Projects 2. Concerns that already exist about Controlled Use Information (Not Information Created in Unrestricted U.S. Campus/Fundamental Research, Which Is Clearly Excluded From Controls) Copyright - Export Experts LLC - 2009 9
  • 10. V. ‘DEEMED EXPORTS’ IN FUNDAMENTAL RESEARCH (Continued) B. Colleges and Universities have reasonably inferred the ability to convey information on use of controlled equipment in fundamental research on campus as part of the exclusion because the NSDD 189 (1985) ruling extends fundamental research to conduct as well as output of University research conducted in the United States. 1. The Department of Commerce has not previously taken another position in the enforcement or regulatory questions and answers, but has been considering the issue for some time. 2. The Department of Commerce‘s ‗Deemed Export Advisory Committee‘ (DEAC) considered this and other issues raised In the 2004 Inspector General‘s Report to Congress. a. On December 20, 2007, the DEAC Report Was Issued. See http://tac.bis.doc.gov/2007/deacreport.pdf The Department of Commerce Is considering the recommendations on enhancement of controls. It Is undecided whether fundamental research will be redefined, and whether classification will continue to be the primary control for University research when a level of security Is warranted. C. A ―Deemed Export License‖ is not technically required for mere use of controlled equipment (without a transfer of related controlled ―Use Technology‖)—but would be required as a practical matter under the Inspector General‘s interpretation ―due to dynamic, spontaneous transfer of use information In research‖. Updated information is needed. D. The Department of Commerce has the potential position (based on initial analysis) of whether a ―Deemed Export License‖ Is required. This is based upon consideration of the following elements: 1. Is the equipment controlled? 2. If so, is it controlled for ‗Use Technology‘? 3. If So, for what ‗Aspects of Use‘ is it controlled (e.g., installation, repair, mere operation, maintenance, etc.)? 4. If So, is it controlled for ‗Use Technology‘ for all countries or just some Countries (Which Countries are covered by controls)? Copyright - Export Experts LLC - 2009 10
  • 11. V. ‘DEEMED EXPORTS’ IN FUNDAMENTAL RESEARCH (Continued) 5. Is the ‗Use Technology‘ already publicly available and addressed by specified EAR methods? [See below in Part VI of this document] 6. Is the ‗Use Technology‘ subject to a blanket license and/or exclusion (e.g., License Exception Designation of TUR) and, if so, is the license applicable to all Countries or just some (Which Ones)? E. The important point that has been reached and must be clearly understood is if it is controlled under notes1 and 2 above, then under the interpretation of the Inspector General(s), a ―Deemed Export License‖ Is required before use of the technology of the type controlled under note 3 (above) is conveyed within the United States to any national/citizen of a country that Is subject to controls identified in note 4 above, unless an exclusion applies under note 5 above or a license exception is applicable under note 6 above. 1. An export license would also be required before the use technology is sent abroad to anyone in a controlled country (as in note 4 above) or anywhere abroad to a national/citizen of a controlled country. VI. PUBLICLY AVAILABLE AND IN THE PUBLIC DOMAIN EXCLUSION A. The ―Public Domain/Generally Available Exclusion‖ referred to by the Department of Commerce as Publicly Available (EAR) or as Public Domain under the Department of State (ITAR) Information Exclusion (Refer to Title 22 Code of Federal Regulations, Section 120.10(5), 120.11, 125.1(b), 125.4; and Title 15 Code of Federal Regulations, Section 734.3(b)(3), 734.7-734.10) This applies to the following: 1. Information already published, not just ordinarily published, through specified means: a. Libraries open to the public, including most university libraries; unrestricted subscriptions, newsstands, or bookstores for a cost not exceeding reproduction and distribution costs (including a reasonable profit); b. Published patents; Copyright - Export Experts LLC - 2009 11
  • 12. VI. PUBLICLY AVAILABLE AND IN THE PUBLIC DOMAIN EXCLUSION (Continued) c. Conferences, meetings, seminars, trade shows, or exhibits held in the U.S. (ITAR) or anywhere (EAR), which are generally accessible by the public for a fee reasonably related to the cost and where attendees may take notes and leave with their notes; or d. Web sites accessible to the public for free and without the host tracking or controlling of who visits or downloads software/ information (clearly acceptable under EAR, and likely acceptable under ITAR). B. The broadest exclusion allowed as it can apply to information transfers in U.S. and abroad. VII. IMPORTANT ELEMENTS: PUBLICATION OR ACCESS, DISSEMINATION RESTRICTIONS DESTROY FUNDAMENTAL RESEARCH, PUBLICLY AVAILABLE, & PUBLIC DOMAIN EXCLUSIONS A. Faculty/Researcher Side Deals With Sponsors Destroy Exclusions B. Short (e.g., 30 - 90 days) Pre-publication Review Period (Not Approval) For Patent Protection or to Remove Sponsor-Proprietary Information Does Not Destroy Exclusions VIII. GOVERNMENT SPONSORED RESEARCH COVERED BY CONTRACT CONTROLS EXEMPTION A. EAR License Exemption for Government Sponsored Research Covered by Contract Controls (Title 15 Code of Federal Regulations Section 734.11) applies only to the following: 1. Information resulting from federally-funded research that includes specific national security controls in the government agreement (e.g., prepublication reviews or dissemination controls) 2. Does not qualify for fundamental research exclusion (Title 15 Code of Federal Regulations Section 734.8) but no license is required if in compliance with all specific national security controls contained within the contract. Copyright - Export Experts LLC - 2009 12
  • 13. VIII. GOVERNMENT SPONSORED RESEARCH COVERED BY CONTRACT CONTROLS EXEMPTION (Continued) 3. However, if all of the contract controls are not followed, then the fundamental research exclusion is not available or allowed – consequently, if a license was then required and not obtained, a violation of the federal regulation occurs. 3. A most likely Department of Commerce viewpoint is that the exemption does not extend to existing controlled technology on ―Use‖ of such equipment -- only to results of such research performed. IX. OTHER EXCLUSIONS OR EXEMPTIONS A. The ―Educational Exclusion‖ found in both Department of Commerce and Department of State regulations (EAR/ITAR) (Titles 15 Code of Federal Regulations 734.3(b)(3)(iii), 734.9, and Title 22 Code of Federal Regulations 120.10(5)) applies to the following topic areas: 1. General Science, Math, Engineering Commonly Taught at schools and universities (ITAR - Subject Matter Focused), or 2. Information conveyed In courses listed in University course catalogs and In the associated teaching labs of any qualified academic institution - EAR – ―Venue Focused‖ but doesn‘t cover encrypted Software issues. C. Bona Fide full-time ‗Employee License Exemption‘ is an ITAR-Only exemption option. See Title 22 Code of Federal Regulations Section 125.4(b)(10); and it applies only to the following conditions: 1. Unclassified technical data provided to bona fide full-time regular employees of accredited United States-based institutions of higher learning with permanent sites and facilities located in the United States, throughout their period of employment. 2. The institution of higher learning must Inform all applicable employees in writing that they are not permitted or allowed to transfer such information to other foreign nationals. This document should be signed and retained in the Compliance Record. 3. The exemption does not apply to students with F-1 Visas or others with Visas only allowing part-time work to be performed. 4. The exemption does not apply to nationals of ITAR-Prohibited or Embargoed Countries. Copyright - Export Experts LLC - 2009 13
  • 14. X. IF A QUALIFIED EXCLUSIONS AND/OR EXEMPTIONS DOES NOT APPLY – IS A LICENSE REQUIRED? IS A LICENSE OBTAINABLE? A. If Exclusions and/or Exemptions do not apply and - 1. If the items or materials are on the Commerce Control List (CCL) – all related technologies and technical data may also be controlled; a. Therefore a Department of Commerce EAR License may be required, and must be investigated further, before any ―Export‖ or ―Deemed Export‖ activity is undertaken, depending on the type of commodity listed and the destination or national citizenship of the person receiving the data or technology [1] Most Department of Commerce EAR licenses are considered on a case-by-case basis, however further review of Section XI.B. (below) with regard to commodities that have an Export Commodity Control Number (ECCN) of EAR 99 in the CCL listing [2] Where Chemicals and/or Biologicals are involved: a] An Export License is required for all countries if listed in the ―Reason For Control‖ as CB (chemical and/or biological controls) purpose b] An Export License is required for all non-Chemical Weapons Convention (CWC) Countries if the ―Reason For Control‖ listed as CW (CWC) compliance purposes and the export is to only non-CWC destination countries c] Furthermore, as noted, an Export License is for the most part considered on a case-by-case review if the item or technology is listed in the CCL for CB or AT (anti-terrorism) Purposes – and an Export License will be denied by the Department of Commerce if the item or technology is identified in the CCL for CW purposes and the export is to Non-CWC Countries Copyright - Export Experts LLC - 2009 14
  • 15. X. IF A QUALIFIED EXCLUSIONS AND/OR EXEMPTIONS DOES NOT APPLY – IS A LICENSE REQUIRED? IS A LICENSE OBTAINABLE? (Continued) d] An Export License will be denied, as an example, to Syria and other Embargoed Countries and so identified End Users -- and, as for example, Ricin D and E and CWC Chemicals and/or Toxins for those countries that are not a party to the Chemical Weapons Convention 2. If Items or Materials are on the Department of Commerce‘s Commerce Control List (CCL) with an ECCN of EAR 99; (no other ECCN) a. Therefore it is likely the activity will need an EAR Export License if, [1] The destination-foreigner‘s nationality is on the EAR entities list – Refer to Title 15 Code of Federal Regulations Section 744, Supplement 4 , [2] The End User is on ―Denied Person List‖ http://www.bis.doc.gov/DPL/Default.shtm [3] The Destination-Foreigner‘s Nationality is an OFAC Embargoed Country [4] The Destination and/or Foreigner‘s Nationality is another US Embargoed Country (Example: Rwanda, OFAC Embargo List) [5] The individuals and/or institutions involved are on an OFAC Prohibited List (e.g., the Specially Designated Nationals List, Certain Individuals Associated with War Crimes in the Balkans or the Taliban in Afghanistan), or [6] The special activity or project is associated with a Weapons of Mass Destruction Program, a Missile Program or there are indications of a possible diversion (General Prohibition ―red flag‖) (Reference: Title 15 Code of Federal Regulations Section 732, Supplement 3) b. Otherwise, the activity does not need an Export License (But it is important that all aspects of the Export Documentation and Procedures are complied with. Copyright - Export Experts LLC - 2009 15
  • 16. X. IF A QUALIFIED EXCLUSIONS AND/OR EXEMPTIONS DOES NOT APPLY – IS A LICENSE REQUIRED? IS A LICENSE OBTAINABLE? (Continued) C. If subject items or materials that are listed on or covered by the Department of State ITAR United States Munitions List (USML) – ―Related Technical Data or Defense Services Controlled‖, and Even if the subject items or materials are not listed on or covered by Control Lists, if there is reason to know that items or materials will be used In a prohibited manner, such as for Weapons of Mass Destruction, or Even if the subject items or materials are not listed on or covered by Control Lists, if items or materials, technical data is designed or (could be) modified for military use (As shall be determined by The Department of State, and the determination is not to be left to the researcher or other unauthorized person. An ITAR License will be required in advance and before any ―Export‖ or ―Deemed Export‖ (or discussion) is undertaken. The Department of State has established the following: 1. The Department of State will Not Issue a License: a. If the identified destination and/or foreigner‘s nationality is identified as an ITAR Prohibited Country. b. If the ECCN of the article includes sufficient National Security cause for denial for any non-US location. 3. It is possible that an Export License may otherwise be issued after a comprehensive review is concluded, but this may take time (months and months). XI. THE FOLLOWING TOPICS AND COMMENTS ARE OF CRITICAL IMPORTANCE AND ALL PERSONS SHALL BE BEWARE OF THE FOLLOWING: A. Export Controls may apply to the situation and failure to comply become a Violation without appropriate licenses being issued in advance: 1. When Research Equipment, e.g. -- Biological Samples – Computers containing research data or encrypted or proprietary software – are hand-carried or shipped abroad without a License Copyright - Export Experts LLC - 2009 16
  • 17. XI. THE FOLLOWING TOPICS AND COMMENTS ARE OF CRITICAL IMPORTANCE AND ALL PERSONS SHALL BE BEWARE OF THE FOLLOWING: (Continued) 2. When Corporate Research and Development Groups, Colleges or Universities or Researchers have reason to know (or strongly suspect) that Sponsors or Collaborators are violating United States‘ controls (Reference: Title 15 Code of Federal Regulations, Section 736.2(b)(10)). 3. When Sponsors provide controlled proprietary or confidential information to Corporate Research and Development, Colleges or University‘s Researchers who then share it with anyone abroad or with foreigners in U.S. (without prior vetting.) 4. If ‗Exclusive Material Transfer Agreements‘ or Intellectual Property Licensing Agreements‘ impose publication restrictions, access- dissemination restrictions and the materials and/or related technologies and/or technical data are controlled – ―Deemed Export‖ -- and export controls apply. 5. When technology transfer disclosures of controlled information are made abroad before a patent issues (i.e. Becomes Public) -- Except when directly related to applying for a Foreign Patent. B. OFAC Trade Sanctions/Embargoes May Apply to: 1. U.S. Citizens as well as Foreign Nationals. 2. Payments (i.e. Compensation, Honoraria, Contracts) to embargoed Countries and/or Nationals and/or Entities and/or Individuals. 3. Attendance at and/or planning of international conferences in or with Embargoed and/or Sanctioned Countries, Nationals, and/ or Entities. 4. Surveys and/or Services to Embargoed and/or Sanctioned Countries and/or Nationals and/or Entities and/or Individuals 5. Editing or joint authorship of articles of-or-with Nationals of Embargoed Countries or Individuals. i. Issued, December 17, 2004, there is an OFAC General License for Cuba, Sudan and Iran that allows most editing and/or joint authorship with Nationals of these countries (NOTE: But not the Governments or Government Employees of these Nations) (Reference: Title 31 Code of Federal Regulations, Sections 515, 538, & 560) Copyright - Export Experts LLC - 2009 17
  • 18. XI. THE FOLLOWING TOPICS AND COMMENTS ARE OF CRITICAL IMPORTANCE AND ALL PERSONS SHALL BE BEWARE OF THE FOLLOWING: (Continued) B. OFAC Trade Sanctions/Embargoes May Apply to: (Continued) ii. Issued by OFAC, on April 2, 2004, the authorization letter allowing peer Review and/or copy with style editing of Libyan Nationals‘ articles. (Reference: http://www.treas.gov/offices /enforcement / ofac/rulings/ia040504.pdf ) iii. These restriction raise 1st Amendment Issues that are as of yet unresolved by the Supreme Court of the United States. C. Licenses can take weeks – months — or longer to obtain — compliance is critical so advance planning and application is essential. 1. Apply early through the corporate legal department, export control department (or other organization identified by a corporate directive), or for colleges and research university‘s established organizations covering grants or sponsored research. 2. Encourage open and public research under the ―Public Availability‖ / ―Public Domain‖ and ―Fundamental Research‖ Exclusions - recognizing that openness is a more natural instinct than security in academia or research environments; 3. Organizations must have established policies and capabilities and protocol for the administration and oversight of compliance, with such policies promulgated on a repeated basis, including incorporation with new employee orientation programs. Records of such instruction shall be maintained in personnel files. 4. A common and long established instance of an established policy is a Corporate or Institutional Promulgated Policy that prohibits sponsor- based restrictions on the publication of or on any to access and/or dissemination, without the prior written approval of the Corporate Officer or Institutional official, or their designee as stipulated by the Board‘s directives. 4. Expert (on the topic and regulations) Legal Counsel, either inside or outside the organization supports the decision of the Chief Compliance Officer. Copyright - Export Experts LLC - 2009 18
  • 19. XI. THE FOLLOWING TOPICS AND COMMENTS ARE OF CRITICAL IMPORTANCE AND ALL PERSONS SHALL BE BEWARE OF THE FOLLOWING: (Continued) Licenses can take weeks – months — or longer to obtain — compliance is critical so advance planning and application is essential. (Continued) 5. In the case of ―primary research‖ in both corporate R&D and educational institution (e.g. Colleges and Universities) normally have established programs that emphasize the fact that faculty and staff must be sufficiently educated on the system of controls established by the United States government and should know without being qualified as “Export Experts” how to secure the needed and necessary information that might qualify the technology or data or information for an applicable exclusion (e.g. The Compliance Officer/Official) and must be directed, without exception to seek the assistance and authorization/approval (documented) as this may trigger a possible control (e.g. license) and expose the organization to a serious risk of non-compliance if ignored. 6. Recordkeeping and documentation of the Compliance Program, including the implementation and training efforts, and all such related steps and processes to uncover gaps or inadequacies in compliance efforts is important. This is an internal audit and SOX-related duty. 7. Management and organizational leadership must encourage the prompt disclosure of all potential violations to Chief Compliance Officer or their designee in order that a knowledgeable, prompt and timely response including through the appropriate process a self-disclosure to the applicable Federal Agency to help to mitigate assessment of penalties; 8. It is directed that reference be made to the organization‘s Chief Compliance Officer and the published and document ―Export Control Compliance Program and Departmental Guidelines‖. Such information is optimally promulgated (published and kept current) on the organization‘s web site or intranet site. Copyright - Export Experts LLC - 2009 19
  • 20. XII. FURTHER REFERENCES AND ADDITIONAL RESOURCE INFORMATION A. Department of Commerce, Bureau of Industry and Security http://www.bis.doc.gov/ B. Department of State, ITAR Regulations http://www.pmddtc.state.gov/regulations _laws/ITAR.html C. United States Treasury, Office of Foreign Asset Control, OFAC Listing http://www.treas.gov/ofac/ D. Department of Homeland Security, Customs and Border Protection Service http://www.cbp.gov/ and http://www.customs.gov/ and http://www.dhs.gov/ E. Department of the Treasury (Index of Agencies) http://www.ustreas.gov/ F. Department of Defense (index of Offices) http://www.defenselink.mil/ G. Non-Profit Business Advisory Services and Business Consulting for International Trade, Import & Export, Customs/Duty Drawback, and Global Logistics Operations http://www.ExportExpertsLLC.com Copyright - Export Experts LLC - 2009 20

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