Export Controls: An Overview

Export Controls of the United States: A Brief Overview For

“Special Organizations”

International Trade Compliance Training MeetingAugust 19 - 20, 2009

EXPORT EXPERTS, LLC - A Non-Profit International Trade Business Training and Advisor Organization HTTP://WWW.EXPORTEXPERTSLLC.COM

Export Controls: An Overview

What are the U.S. Export Controls?

“Export Controls” are the laws established by the

United States government agencies and

departments responsible for control of items of

technology, products, and data distribution to

foreign countries and foreign nationals of

strategically important technology, services and

information for reasons of foreign policy and the

national security of the United States.

Export Controls: An Overview

What is the definition of an Export?

1. Transfer of controlled technology, data or

information, equipment, software or services to a

foreign person (e.g. Legal Resident or Citizen) in

the United States or abroad.

2. An export to a foreign person inside the United

States is considered a “deemed export”.

Export Controls: An Overview

Responsible U.S. Government Departments and Agencies

The State Department

International Traffic in Arms Regulations (ITAR)

The Department of Commerce

Export Administration Regulations (EAR)

The Treasury Department

Office of Foreign Assets Control (OFAC)

Other Agencies: Department of Homeland Security, Customs and Border Protection, Department of Energy, Food and Drug Administration, The Census Bureau….

Export Controls: An Overview

This Communication Is To Make Clear:

The Laws and Regulations of the United

States Government dealing with

“Exports” are technical & complex and

the penalties to individuals and

organizations can be very severe.

Work with the Head of Compliance, always.

Export Controls: An Overview

Typical “Unique Organizations, Hi-Tech Corporations, Colleges and Universities”

•Fundamental Research

•Educational Information

•Public Domain/Publicly Available Information

Export Controls: An Overview

“Fundamental Research” Exclusion

“Fundamental research” means basic and applied

research in engineering and the sciences, 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 are ordinarily restricted/controlled for proprietary

or national security reasons.

Reference: National Security Decision Directive 189

Export Controls: An Overview

Educational Institution Exclusion(s)

Such exclusions are applicable when the

information in question consists of general

scientific, mathematical or engineering

principles commonly taught in colleges and

universities or information that is now

available within the public domain.

Export Controls: An Overview

Public Domain & Publicly Available Information

The controls over such publicly available

information is referred to as “Public Domain”

and these exclusions are applied when the

information is already in the public domain

(i.e. available in a Library) and does not have

restrictions on who may come and access

this data or information.

Export Controls: An Overview

BEWARE: There Are Areas of Risk!

Many college & university activities are

subject to US Federal Export Controls and

the exclusions may not always apply. i.e.•Defence Contracts/Services

•International Projects

•Access to Controlled Equipment (ITAR v. EAR)

•Development (Activities)

•Proprietary Research & Related Information

Export Controls: An Overview

Export Control Violation Penalties

•Administrative penalties • Loss of US Government funding & debarment

• Loss of export privileges

•Monetary fines• Up to $1 Million per violation

•Prison Sentences (Incarceration) • Up to 20 years per violation

Export Controls: An Overview

Why Care About U.S. Export Controls?

• Increasingly more college and university research

projects are subject to U.S. Export Controls.

• Investigations by multiple agencies with related

enforcement actions are on the rise.

•Voluntary Disclosures by colleges & universities:•Violation related to ITAR controlled information released via

a University’s Research Department website

•Possible EAR/OFAC violation; computers send to Cuba

Export Controls: An Overview

Examples of Licenses Secured and Pending Export License Applications

•3 ITAR licenses received for equipment shipments

to Belize, Costa Rica and Spain. (DSR)

•2 EAR licenses and 1 application pending for

shipping materials & equipment overseas. (EHS)

•Request of an Institutional License from OFAC for

certain types educational travel to Cuba. (UFIC)

Export Controls: An Overview

Other Export Control Points of Control and Control Officials to be Involved

• University’s International Center•Controls related to international travel restrictions

• Organization’s Purchasing and Asset Management•Recording of controls on all controlled assets

•Determining or obtaining the correct ECCN or USML category on

goods and materials purchased

• Environmental Health and Safety Department•Administration and compliance with all shipping and transfer of

controlled biologics and chemicals

• The Legal Department; Office of the General Counsel•Assists export controls processes in an advisory role

Export Controls: An Overview

Understand The General Prohibitions & Organizational Policies

•Questions?•1st Inquire Within Your Own Organization,

College or University about established

points of contact and control for direction•2nd Contact an outside resource that

specializes in Export Control Regulations:HTTP://WWW.EXPORTEXPERTSLLC.COM

E-mail: Information@ExportExpertsLLC.com

General Information Telephone: (714) 875-6546

International Trade Specialist Attorney: Michael Doram (626) 296-9161