Export Control And Universities

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Presented at the August 2007 meeting of the Allegheny Chapter of the Society of Research Administrators

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Export Control And Universities

  1. 1. Presented at the August 2007 meeting of the Allegheny Chapter of the Society of Research Administrators Export Controls & the University Presented by Kathy Volz
  2. 2. What are Export Controls? Shorthand for a collection of regulations related to national security & foreign policy • International Traffic in Arms Regulations– ITAR • Export Administration Regulations – EAR • Office of Foreign Assets Control – OFAC
  3. 3. International Traffic in Arms Regulations • Department of State • Military technology • US Munitions List
  4. 4. Export Administration Regulations • Department of Commerce • Dual use technology • Commerce Control List
  5. 5. Office of Foreign Assets Control • US Department of the Treasury • Economic and trade sanctions • Foreign policy and national security • Country Sanctions List • Specially Designated Nationals List
  6. 6. OFAC • No “work around” • Sciences vs Humanities • Location, location, location • Export definition
  7. 7. Conferences • 22 CFR 120.11: Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the United States • Outside the United States • “Side bar” conversations
  8. 8. Relationships between Regulations • ITAR and EAR relate to technology • OFAC relates to diplomacy ITAR EAR OFAC
  9. 9. Export Controls Continuum • Basic → Applied → Developmental • Public Domain → Sensitive → Classified • Commercial Use → Dual Use →Military Use • Open Participation → Access Controlled • Free to Publish → No Right to Publish • University → Industry → Gov’t Facility • US → NATO member → Embargoed country
  10. 10. National Security Environment • Limiting access to technology & information • Restricting information flow • Protecting national security and maintaining foreign relations
  11. 11. University Research Environment • Open access to labs & facilities • Sharing and disseminating information • Open forum for education and communication
  12. 12. University Dilemma with Export Control • Execute mission • Protect national security • Support foreign policy initiatives
  13. 13. Regulatory Dilemma with Universities • Middle of the continuum • Indistinguishable from small defense contractors • Organization and facilities are designed for open access • Don’t appear compliant
  14. 14. Critical Question How does the University perform the research it wants to in a way that fulfills its mission and supports national security initiatives and US foreign policy?
  15. 15. Choices for Engagement • Accept only unrestricted work • Accept export control restrictions – Accept restriction wholesale – Accept restrictions on a limited basis
  16. 16. Export Control Touch Points • Nature of Research: Defense-related • Source: Sponsors • Rules of Engagement: Terms & Conditions • Geography: Place of performance and/or subject country
  17. 17. Nature: Defense-related Research • Procurement – for governmental use • Assistance – advancing the state of the practice
  18. 18. Nature: Penn State Defense Research Fiscal Year 04/05 • Defense Related Research Units had $142M in research expenditures • Penn State received $145M in Department of Defense research funding • Penn State received $13M in Department of Energy research funding
  19. 19. Source: Federal & Defense Sponsors • Clear models for procurement & assistance • Public mandate • Conservative
  20. 20. Source: Industry Sponsors • Federal and B2B procurement • No model for assistance • For-profit business model • No exemptions available • Intermediary layer between University & Federal sponsor • Work-for-hire model
  21. 21. Rules of Engagement: Terms & Conditions • Terms & conditions can invoke export controls where they otherwise wouldn’t apply • Touch points – Proposal stage – Award stage
  22. 22. Fundamental Research Exemption If a project qualifies as fundamental research: • Exempt from ITAR & EAR export controls • Anyone can work on the project • Free to publish
  23. 23. Fundamental Research 22 CFR 120.11(8) 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….
  24. 24. How Exemption is Lost Terms & conditions include: • Access restriction – a restriction of who can work on the project • Dissemination restriction – a publication restriction.
  25. 25. How Exemption is Lost • Mandate – research must be export controlled because of the nature of the work (relates to military/national security) • Forfeit – accept terms and conditions that are not necessary for national security reasons
  26. 26. Mandated Loss of Exemption Research for military use/application • DFAR 252.204-7000 • Other agreement language from the Government
  27. 27. Voluntary Loss of Exemption Publication or access restriction on work unrelated to national defense • Prior approval of publication • Prior approval of foreign national participation • Industry and the work-for-hire model
  28. 28. Handling Terms & Conditions Do what is appropriate to the situation • Accept • Negotiate • Remember that OFAC is always there and not subject to negotiation
  29. 29. Consequences of Acceptance • Must conduct a review to determine if the project is subject to ITAR and/or EAR • May not be able to use foreign nationals on project • May have to implement a security plan
  30. 30. Negotiation Strategies Negotiate from a position of strength • Acknowledge importance of export controls • Investigate nature of research • Investigate applicability of regulations • Understand who you’re negotiating with
  31. 31. Who are you negotiating with? • Faculty Contract Technical • Industry Agency • Agency Industry University
  32. 32. Who says it’s not fundamental? 22 CFR 120.11(8) University research will not be considered fundamental research if: (i) The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity, or (ii) The research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.
  33. 33. It’s not a real publication restriction. • Publication not allowed • Approval required before publication • Delay for review and comment ≠ restriction • “Review and comment” ≠ restriction • Intent is immaterial
  34. 34. I’m not exporting anything. “Export” is a term of art that includes: • Actual shipment of goods • Electronic transmission of information • Verbal communication with a foreign national • Visual “inspection” by a foreign national • Use of controlled technology abroad
  35. 35. Examples of Exports • Talking about a project with a foreign national • Giving a foreign national a tour of your facility • Having an e-mail exchange with a foreign national • Taking a controlled technology abroad – like a laptop computer or GPS system
  36. 36. Negotiating with Industry • You haven’t started yet? • So? • Really! • Okay…. • Oh well.
  37. 37. Negotiating with Agencies • Not on my watch • University risk profile • Continuum • Distinguish • Carve out portion of scope
  38. 38. Impacts of Export Controls • University mission • Promotion & tenure • Graduate student participation • Foreign nationals • Annual Compliance Certification to OVPR • Award processing • Sanctions
  39. 39. Graduate Student Participation • About 60% of Penn State’s engineering & science graduate students are foreign nationals • International student enrollment in US schools up for first time since 2001
  40. 40. Graduate Student Participation • Publication of graduate thesis is a degree requirement • Thesis defense must be open to the public
  41. 41. Graduate Student Participation • Embargoed countries – Currently includes Cuba, Iran, North Korea, Sudan, and Syria • ITAR – Chinese students can not participate • EAR – Participation depends on specific technology & country • At best, licenses are expensive & postpone project start
  42. 42. The Name Game Elliott Yamin Amy Winehouse Jeremy Hernandez Satveer Chaudhary Melky Cabrera Wilson Betenit Gordon Brown Stephen Harper Keith Ellison Chaka Fattah Koji Steven Sakai Alberto Gonzales Xiaodong Sheldon Meng
  43. 43. “War” Stories • Department of Homeland Security • Understanding the SOW • FDP and export controls • Visiting scientists • Industry sponsors – negotiation with and through • Extra-contractual assurances
  44. 44. Contact Information Kathy Volz Negotiator The Pennsylvania State University Office of Sponsored Programs 110 Technology Center Building University Park, PA 16802 814-865-6875 kjv10@psu.edu

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