Export Control Overview


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Overview of EAR and ITAR export control regulations. Supports blog post at blog.thehigheredcio.com on the topic.

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Export Control Overview

  1. 1. Export Controls Overview International Traffic in Arms Regulations/ Export Administration Regulations Jerry Bishop blog.thehigheredcio.com - - Export Controls by  Jerry Bishop  is licensed under a  Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License .
  2. 2. Disclaimer This material is intended only as an overview and does not provide all substantive information needed to make a responsible export decision. Please contact your legal council or external auditor for assistance in interpreting and applying U.S. export control laws and regulations to your specific export or import requirement. - -
  3. 3. OVERVIEW
  4. 4. Regulating Agencies <ul><li>International Traffic in Arms Regulations (ITAR) </li></ul><ul><ul><li>Dept of State - 22 CFR 120 </li></ul></ul><ul><ul><li>Controls Defense related items </li></ul></ul><ul><li>Export Administration Regulations (EAR) </li></ul><ul><ul><li>Dept of Commerce - 15 CFR 730 </li></ul></ul><ul><ul><li>Controls most other items including dual use technology </li></ul></ul><ul><li>Office of Foreign Assets Controls (OFAC) </li></ul><ul><ul><li>Dept of Treasury – 15 CFR 500 </li></ul></ul><ul><ul><li>Administers and enforces economic sanctions programs primarily against countries and groups of individuals </li></ul></ul>
  5. 5. Other U.S. Laws & Regulations <ul><li>Drug Enforcement Administration (21 CFR 1311) </li></ul><ul><li>Food and Drug Administration (21 USC 301) </li></ul><ul><li>Department of Interior (50 CFR 17.21,22,31,32) </li></ul><ul><li>Department of Energy (10 CFR 205.300, 10 CFR 110 & 810) </li></ul><ul><li>Others </li></ul>- -
  6. 6. What is Export Control <ul><li>Federal laws to protect items, technical data and information important to the U.S. </li></ul><ul><ul><li>Export Administration Regulations (EAR) </li></ul></ul><ul><ul><li>International Traffic in Arms Regulations (ITAR) </li></ul></ul><ul><ul><li>Office of Foreign Assets Control (OFAC) regulations. </li></ul></ul><ul><li>Laws have been in place for > 20 years </li></ul><ul><li>More prominent since 9/11 resulting in heightened scrutiny </li></ul>
  7. 7. Export - Definition <ul><li>The definition of Export includes </li></ul><ul><ul><li>The transfer of anything to a “FOREIGN PERSON” by any means, anywhere, anytime, or the knowledge that what you are transferring to a “U.S. PERSON”, will be further transferred to a “FOREIGN PERSON” </li></ul></ul><ul><ul><li>Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person whether in the U.S. or abroad or </li></ul></ul><ul><ul><li>Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the U.S., or abroad </li></ul></ul>- -
  8. 8. Technical Data is an Exportable Commodity <ul><li>Technical data is included as an export under the ITAR regulations (://pmdtc.org/reference.htm) </li></ul><ul><ul><li>Information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. </li></ul></ul><ul><ul><li>This includes information in the form of blueprints, drawings, process specifications, photographs, plans, instructions, and documentation. </li></ul></ul>- -
  9. 9. Challenges <ul><li>EAR is not as simple as just looking at the nationality. </li></ul><ul><ul><li>Very dependent upon the specific technology </li></ul></ul><ul><ul><ul><li>some countries can receive some items </li></ul></ul></ul><ul><ul><li>Time factor in determining requirements and then applying for and receiving licenses </li></ul></ul><ul><ul><ul><li>Can be as long as 90-120 days </li></ul></ul></ul><ul><li>ITAR is simpler in that it considers all foreign nationals equally as “dangerous”, however, specific technology is still a major consideration. </li></ul>
  11. 11. International Traffic in Arms Regulations (ITAR) <ul><li>22 CFR 120-130 </li></ul><ul><li>Administered by the Department of State (Office of Defense Trade Controls) </li></ul><ul><li>The United States Munitions List (USML) </li></ul><ul><ul><li>21 categories of “Defense Articles/Services” </li></ul></ul><ul><ul><li>“ Defense Article” - any item on the USML </li></ul></ul><ul><ul><ul><li>Including “ technical data ” </li></ul></ul></ul><ul><ul><li>If an item is listed, it is subject to the ITAR </li></ul></ul><ul><ul><ul><li>Example: Category IV - Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines </li></ul></ul></ul><ul><ul><ul><li>Example: Category XV - Spacecraft and Associated Equipment </li></ul></ul></ul>- -
  12. 12. United States Munitions List (USML) <ul><li>I - Firearms </li></ul><ul><li>II - Artillery Projectors </li></ul><ul><li>III - Ammunition </li></ul><ul><li>*IV - Launch Vehicles, etc. </li></ul><ul><li>*V - Explosives, Propellants, Incendiary Agents and Their Constituents </li></ul><ul><li>VI - Vessels of War and Special Naval Equipment </li></ul><ul><li>VII - Tanks and Military Vehicles </li></ul><ul><li>VIII - Aircraft and Associated Equipment </li></ul><ul><li>IX - Military Training Equipment </li></ul><ul><li>X - Protective Personnel Equipment </li></ul><ul><li>XI - Military Electronics </li></ul><ul><li>*XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment </li></ul><ul><li>* XIII - Auxilary Military Equipment </li></ul><ul><li>XIV - Toxicological Agents and Equipment and Radiological Equipment </li></ul><ul><li>*XV - Spacecraft Systems and Associated Equipment </li></ul><ul><li>XVI - Nuclear Weapons Design and Related Equipment </li></ul><ul><li>XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated </li></ul><ul><li>XVIII - Reserved </li></ul><ul><li>XIX - Reserved </li></ul><ul><li>XX - Submersible Vessels, Oceanographic and Associated Equipment </li></ul><ul><li>XXI - Miscellaneous Articles </li></ul>- -
  13. 13. ITAR DEFINITIONS - Export <ul><li>Export – disclosing (including oral or visual disclosure) or transferring in the United States any “ defense article” to an embassy, any agency or subdivision of a foreign government (e.g., diplomatic missions); or disclosing (including oral or visual disclosure) or transferring “ technical data” to a “ foreign person” , whether in the U.S. or abroad; or performing a “defense service” on behalf of, or for the benefit of, a “ foreign person” , whether in the U.S. or abroad. </li></ul>- -
  14. 14. ITAR DEFINITIONS - U.S. Person <ul><li>Important ITAR Definitions </li></ul><ul><ul><li>U.S. Person - a natural person who is a lawful permanent resident as defined in 8 U.S.C. 1101(a)(20) or who is a protected individual as defined by 8 U.S.C. 1324b(a)(3). </li></ul></ul><ul><ul><ul><li>It also means any corporation, business association, partnership, society, trust, or any other entity, organization or group that is incorporated to do business in the U.S. </li></ul></ul></ul><ul><ul><ul><li>It also includes any governmental (federal, state or local), entity. </li></ul></ul></ul>- -
  15. 15. ITAR DEFINITIONS - Foreign Person, Export <ul><li>Important ITAR Definitions </li></ul><ul><ul><li>Foreign Person - opposite of U.S. Person . </li></ul></ul><ul><ul><li>Export - sending or taking a “defense article” out of the U.S. in any manner, except by mere travel outside of the U.S. by a person whose personal knowledge includes “ technical data” ; or transferring registration, control, or ownership to a “ foreign person” of any aircraft, vessel, or satellite covered by the USML , whether in the U.S. or abroad; or </li></ul></ul>- -
  16. 16. ITAR DEFINITIONS - Technical Data <ul><li>Technical Data - information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of “defense articles”; </li></ul><ul><ul><li>classified information related to “defense articles”; </li></ul></ul><ul><ul><li>information covered by an invention secrecy order; </li></ul></ul><ul><ul><li>software directly related to “defense articles”. </li></ul></ul>- -
  17. 17. ITAR - Exclusions <ul><li>Public Domain - information which is published and which is generally accessible or available to the public </li></ul><ul><ul><ul><li>Fundamental research - is defined to mean basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community </li></ul></ul></ul><ul><ul><ul><li>Technical Data - does not include general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the “public domain” </li></ul></ul></ul><ul><ul><ul><li>Basic marketing information on function or purpose or general system descriptions of “defense articles” </li></ul></ul></ul>- -
  18. 18. ITAR PROSCRIBED COUNTRIES <ul><li>Proscribed Countries - 22 CFR 126.1 </li></ul><ul><ul><li>If a country appears on this list, it is (generally) U.S. policy to deny licenses, or other approvals, associated with exports and imports of defense articles and defense services, destined for or originating in that country. </li></ul></ul><ul><ul><li>ITAR License Exemptions are trumped if a “ foreign person ” from any of these counties is involved; i.e., a license must be applied for. </li></ul></ul>- -
  20. 20. Export Administration Regulations (EAR) <ul><li>Administered by the Department of Commerce (Bureau of Industry Security, BIS) </li></ul><ul><li>The Commerce Control List (CCL) </li></ul><ul><ul><li>List of “Dual Use” items </li></ul></ul><ul><ul><li>Commercial and military or prohibited use </li></ul></ul><ul><ul><li>Divided into ten (10) categories (0 to 9) </li></ul></ul>- -
  21. 21. Commerce Control List Categories Category 0 - Nuclear Materials, Facilities and Equipment and Misc. Category 1 - Materials, Chemicals, Microorganisms and Toxins Category 2 - Materials Processing Category 3 - Electronics Category 4 - Computers Category 5 - Communications, telecommunications Category 6 - Optics, Cameras, Lasers, radar Category 7 - Guidance, navigation, altimeters, avionics Category 8 - Submersible systems, scuba, marine equipment Category 9 - Propulsion Systems, space vehicles, - -
  22. 22. CCL Reasons for Controls <ul><li>National Security (NS) </li></ul><ul><li>Foreign Policy (FP) </li></ul><ul><li>Proliferation (MT, NP, CB) </li></ul><ul><li>Short Supply (SS) </li></ul><ul><li>Anti-Terrorism (AT) </li></ul><ul><li>Crime Control (CC) </li></ul><ul><li>High Performance Computer (XP) </li></ul><ul><li>Regional Stability (RS) </li></ul><ul><li>UN Sanctions (UN) </li></ul>- -
  23. 23. EAR DEFINITIONS <ul><li>Export - actual shipment or transmission of items subject to the EAR out of the United States; or release of technology or software subject to the EAR to a foreign national in the U.S . </li></ul><ul><ul><li>Controlled Technology - specific information required for the “development”, “production”, or “use” of a product which is itself “controlled”. The information takes the form of “technical data” or “technical assistance”. </li></ul></ul><ul><li>Technical Data - May take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on other media/devices (disk, tape, or read-only memories) </li></ul><ul><li>Technical Assistance - may involve transfer of “technical data” </li></ul>- -
  25. 25. Export Compliance Program <ul><li>Four key traits of any successful export compliance program are: </li></ul><ul><ul><li>An Export Compliance Policy Statement </li></ul></ul><ul><ul><li>Export Compliance Procedures </li></ul></ul><ul><ul><li>Education/Training on Export Controls and on the Procedures </li></ul></ul><ul><ul><li>Audit or Self-Review </li></ul></ul><ul><li>NISPOM – National Industrial Security Program Operating Manual </li></ul>
  26. 26. Export Management System - Compliance Program <ul><li>A documented set of policies, procedures, desk-top instructions and checklists (distributed and/or posted to website) that address all necessary elements of compliance including, but not limited to the following: </li></ul><ul><li>Policy statement reflecting commitment to export control </li></ul><ul><li>Overview of Regulations: EAR, ITAR, OFAC </li></ul><ul><li>Responsible Parties/Empowered Officials - ITAR </li></ul><ul><li>Proper Use of </li></ul><ul><ul><li>Fundamental Research Exclusion – EAR </li></ul></ul><ul><ul><li>Public Availability Exclusion – EAR </li></ul></ul><ul><ul><li>Public Domain Exclusion – ITAR </li></ul></ul><ul><ul><li>Educational Information Exclusion EAR/ITAR </li></ul></ul><ul><ul><li>Employment Exclusion - ITAR </li></ul></ul><ul><li>Nondisclosure Agreements EAR/ITAR </li></ul><ul><li>Prohibited party/entity screening EAR/ITAR </li></ul><ul><li>Jurisdiction determination – ITAR </li></ul><ul><li>Defense Services – ITAR </li></ul><ul><li>Classification for dual use destination controls - EAR </li></ul>
  27. 27. Core of a Compliance Program continued… <ul><li>Deemed Exports to controlled foreign nationals – EAR/ITAR </li></ul><ul><li>Licensing/export authorizations and exemptions – EAR/ITAR </li></ul><ul><li>Technical Data Transfer – EAR/ITAR </li></ul><ul><li>Procurement – EAR/ITAR </li></ul><ul><li>Collaborations: research institutions/corporations – EAR/ITAR </li></ul><ul><ul><li>International </li></ul></ul><ul><ul><li>Domestic </li></ul></ul><ul><li>Technology Control Plan (IT access, physical security, visitor, travel, courier, hand-carried) – EAR/ITAR </li></ul><ul><li>Re-exports and retransfers- EAR/ITAR </li></ul><ul><li>Shipping hardware/AES compliance – EAR/ITAR </li></ul><ul><li>Encryption management – EAR/ITAR </li></ul><ul><li>Timely problem notification – EAR/ITAR </li></ul><ul><li>Internal audit – EAR/ITAR </li></ul><ul><li>Training – EAR/ITAR </li></ul><ul><li>OFAC prohibitions. </li></ul>
  29. 29. President’s Export Council <ul><li>Identified Criteria December 6, 2005 </li></ul><ul><li>Controlled NT must have clear military significance or potential for sensitive use. </li></ul><ul><li>NT export controls must be multilateral in order to be effective. </li></ul>
  30. 30. Competing Concerns <ul><li>Government Concerns for Protection of Information </li></ul><ul><li>Military – significantly increase precision and effectiveness </li></ul><ul><li>Homeland Security – detection and identification of threats </li></ul><ul><li>Economy – protection from counterfeiting </li></ul><ul><li>Terrorism – bio and chemical WMD </li></ul><ul><li>Civilian Concerns for Free Disclosure </li></ul><ul><li>Maintaining competitiveness in world markets </li></ul><ul><li>Economic growth – profits, job creation </li></ul><ul><li>Standard of Living – Military monopoly would cause society to forego benefits of NT and place under control of Pentagon </li></ul>
  31. 31. Implications for NT Industries <ul><li>Appoint knowledgeable person to handle export compliance. </li></ul><ul><li>Assess control status of technology in possession. </li></ul><ul><li>Establish a written export controls and economic sanctions compliance program. </li></ul><ul><li>Conduct business in a manner that facilitates future compliance requirements should existing items become controlled or develop new items that are controlled. </li></ul><ul><li>Understand the scope of restrictions imposed under DoD funding. </li></ul><ul><li>Export controls on NT will be strongly influenced by applications. </li></ul>
  32. 32. RESOURCES
  33. 33. Useful Links <ul><li>International Traffic in Arms Regulations (ITAR) </li></ul><ul><ul><li>United States Munitions List (USML) </li></ul></ul><ul><ul><li>Country Policies and Embargoes </li></ul></ul><ul><li>Export Administration Regulations (EAR) </li></ul><ul><ul><li>Commerce Control List and Country List </li></ul></ul><ul><li>Office of Foreign Assets Control (OFAC) </li></ul><ul><li>National Industrial Security Program NISPOM </li></ul><ul><li>Export Management Compliance Guide </li></ul>
  34. 34. University Examples and Samples <ul><li>Google .edu search </li></ul><ul><li>Google search of EDUCASE </li></ul><ul><li>Univ of Wisconsin Export Training Slides </li></ul><ul><li>Univ of Washington Export Control Program </li></ul>
  35. 35. QUESTIONS <ul><li>Jerry Bishop </li></ul><ul><li>blog.thehigheredcio.com </li></ul>