International research activities often involve the exchange of information or technology. It is vital to understand that export controls do not always apply to a physical shipment of a “thing,” but can also be the exposure of technological knowledge to foreign persons, entities, or countries, both on foreign or domestic soil. This is called a “deemed export.” While this may seem a little overwhelming, certain exclusions apply to research activity.
The intent of this section is to provide an overview of the structure and content of regulations commonly called export controls, to describe their relevance to research, and suggest some potential approaches to an export control compliance program.
Export Controls: A Brief Description
Export controls refer to federal regulations that apply to the export of oral, written, electronic, or visual disclosure; or shipment, transfer, or transmission of goods, technology, services, or information to anyone outside of the United States, a non-U.S. entity, or a non-U.S. individual (regardless of location). Export controls have existed for decades, but renewed focus on them increased dramatically after September 2001 and has been stimulated by the risk and speed with which technological advances occur.
In the export control context, the term “export” applies not only to the shipping or personal delivery of technology, information, or funds outside of the United States, but also to the deemed export or disclosure of technology or information to a foreign entity or foreign national on U.S.-soil. Examples of a deemed export could include a tour of laboratory spaces, research involvement, hosting observers or other types of visitors in laboratory or research space, or through discussions or lectures of sensitive research.
The three primary sources of export control regulations are the U.S. Department of Commerce Export Administration Regulations (EAR), the U.S. Department of State International Traffic in Arms Regulations (ITAR), and the U.S. Department of the Treasury Office of Foreign Asset Control (OFAC). There are other regulations (such as those of the U.S. Department of Transportation, International Air Transport Association (IATA), Center for Disease Control, U.S. Fish and Wildlife Services, U.S. Drug Enforcement Administration, etc.) that may also apply to shipping materials outside of the United States, but EAR, ITAR, and OFAC are the key components of federal export controls. The purpose of these regulations is to control proliferation of certain military technologies, and some non-military technologies that have the potential for military applications (called dual use because they have both commercial and military applications), protect certain U.S. commercial technology advantages, and enforce U.S. Department of State opposition to financial flows from the United States to embargoed countries, entities, and persons.
EAR is a set of U.S. government regulations on the export and import of most commercial items. Many of these items are dual-use items. To determine if EAR is applicable, an item can be verified on the Commerce Control List (CCL), also known as the dual-use list.
ITAR regulations apply to the export or import of defense-related articles or services listed in the U.S. Munitions List (USML) for military applications, including deemed exports. Manufacturers and distributors are required to register with the Directorate of Defense Trade Controls (DDTC).
OFAC regulations govern economic and trade sanctions to support foreign policy objectives and national security. Organizations should continually check the the Specially Designated Nationals and Blocked Persons List (SDN), which is published by OFAC, to ensure that they are not doing business with anyone listed. In addition, transactions with boycotted or embargoed countries or countries where trade sanctions exist are also subject to OFAC regulations.
The United States adopted two laws that seek to counteract U.S. citizens from participating in other nations’ economic boycotts or embargoes. These anti-boycott laws are the Export Administration Act (EAA) and the Tax Reform Act (TRA). They were adopted to keep U.S. firms from being used to implement foreign policy that runs contrary to U.S. policy. The TRA is designed to penalize through tax benefits for certain types of boycott-related agreements.
Export control violations are serious concerns for both individuals and organizations. Depending on the circumstances, these violations can result in fines, jail time, or both. Violations can be criminal or administrative. Criminal penalties range from 10-20 years in prison and up to one million dollars in fines for individuals or one million dollars or five times the value of the exports involved for organizations. Administrative penalties can include fines to $250,000 per violation, denial of export privileges, revocation of export licenses, and/or exclusion from practice.
Export Controls and Academic Research
The conventions of modern academic research commonly involve sharing information, equipment, materials, and funds with foreign collaborators both domestic and abroad; and many of these common research transactions are subject to export controls.
Challenges for Research Organizations
Some items are clearly within the scope of covered technologies, such as nuclear- and weapon-related research. However, some items listed in the CCL are not as clear-cut. In some cases, these items are even part of another product, such as ball bearings, lasers, or even encryption software on a laptop. In these cases, it can be difficult to determine if a controlled export license is required, as you many need to contact manufacturers or even federal agencies for their determinations. Depending on the complexity, you may need to engage outside counsel with expertise in this area. Another challenge is the flow of information. Collaborators are no longer just the laboratories next door, but they are laboratories across the globe. Information and technology are easily transferred within seconds, both intentionally and unintentionally. The challenge is not just how to be compliant with export control regulations, but it’s more important to know how to recognize when and where it is happening within your organization.
Regulatory Options for Export Control Management in Academic Research
There are exclusions from the export control requirements. These include:
Fundamental Research Exclusion
Educational Information Exclusion
Publicly Available/ Public Domain Exclusion
National Security Decision Directive 189 (NSDD 189) defines fundamental research as “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.”
Research projects conducted as fundamental research, as defined above, generally meet the Fundamental Research Exclusion criteria and are not subject to export control laws and regulations unless they have other mitigating factors. For example, research results meet the exclusion criteria and would not require an export control license. However, transferring information, materials, or technology outside of the United States, even to the research collaborator, does not meet the exclusion criteria, except under limited circumstances. Research projects that do not qualify for the exclusion include those that are classified, are completed for a military application, are funded through a foreign sponsor, or have restrictions on publication or foreign national participation restrictions.
Fundamental research is essential to an open academic environment. Research institutions need to be cautious that they do not diminish the exclusions provided through fundamental research. Instances that invalidate the exclusion include contractual restrictions on foreign national participation in the research, publication restrictions, or restrictions on dissemination of the research results. Be aware of agreements outside of the formal contract that are made between the sponsor and researcher to side-step these requirements. It is recommended that these side agreements be addressed in a policy.
The Educational Information Exclusion includes information that is part of a published curriculum of commonly taught courses in mathematics, science, and engineering ,or in teaching labs connected to these courses.
The Publicly Available/Public Domain Exclusion refers to information that is available to the public through the public domain and includes technology and software. As a note, this does not apply to encrypted software. The public domain includes already published materials that can be purchased through commercial means, obtained from a library, searched on the internet, or which have been provided for public or unlimited distribution. A detailed legal definition of what the “public domain” means can be obtained at.
Identifying and Mitigating Risky Areas for Potential Export Control Risks
Export control regulations are complex. Educating your research community on how to identify export control issues is critical to minimize risk and exposure to government actions. In your normal course of business, some common business practices will be easier to monitor, while others might involve a little more effort.
Identified here are some of those more difficult areas, but each organization has a unique workflow with unique risk areas. As you assess your organization for export control catch points, realize that the process of getting an export control license can sometimes take months, so start early and build in time for delays. There is no guarantee a license will be granted.
Train researchers to recognize red flags that may expose their research to export control regulations and to initiate early contact for help mitigating potential problems.measures for non-compliant aspects of a research project. Here are some recommendations to stay compliant with export control regulations:
For research that is part of a grant application, identify areas that would require an export control review, such as an international site or collaboration.
Train personnel who draft and approve contracts to recognize export control language and negotiate on behalf of the institution to stay compliant with export control regulations and retain fundamental research exclusions. Work with your general counsel or outside counsel who specialize in export controls to draft templates to help facilitate this process.
Identify high-risk research areas (i.e., cutting-edge technologies, biologics, nuclear materials, space exploration and navigation, or GPS tracking technologies, etc.) within your institution for education and training purposes. This information is essential for the researchers as well as the supporting research infrastructure. The more individuals who can identify export control risk, the better chance you have to prevent violations.
Review procedures with shipping departments likely be involved with the research community when shipping internationally. Evaluate the carriers your institution uses to validate their practices and ensure they are compliant with export control regulations.
Additionally, require staff to obtain training through IATA or a similar course, for the proper method and packaging for transportation of materials. When we think about shipping items, we tend to only consider that items will be shipped via a professional carrier in a manner that can be somewhat monitored. However, it is recommended that you incorporate into your policy and training the dangers of carrying items subject to export control regulations in luggage or on one’s person.
Similarly, researchers who travel with data and equipment are also subject to export control regulations. Examples include traveling with high-tech equipment such as advanced GPS devices, scientific research equipment, or controlled, proprietary, or unpublished data. This can include laptops, cameras, and cell phones, depending on the destination.
Some committees or departments that are not directly involved in the export control process, but still review research information, could flag a research project that should be considered for an export control review. For example, the Institutional Review Board (IRB) application will request information about collaborators, data storage, and material transfers, among other things, that could possible trigger notifications to key individuals within your institution.
Partnering with your Human Resources Department as they onboard foreign researchers, students, interns, etc., may also help identify potential areas of export control violation. If a foreign national is coming to your institution for research purposes, it would be prudent to understand that person’s role and function while at your institution to avoid deemed export control problems. OFAC checks of these individuals should be built into your onboarding procedures.
In a perfect world, it is ideal for your institution to have some sort of international or export control program or office with individuals who specialize in this complicated and challenging regulatory framework. However, not all institutions will be able to put such a program or office in place. Without these types of resources, it is then the responsibility of the institution to identify areas of risk and design mitigating measures to help reduce their risks. Develop tools and checklists to help researchers and support staff identify export control issues, as well as direct them to individuals or departments that can make export control license determinations and, if necessary, file an application for an export control license.
Export Administration Regulations (EAR)
Bureau of Industry and Security (BIS): http://www.bis.doc.gov/
BIS Export Administration Regulations Downloadable Files (Clink on link for Part 774—The Commerce Control List): https://www.bis.doc.gov/index.php/forms-documents/regulations-docs/2345-774-10-24-18/file
BIS Export Administration Regulations Training archived Online Training Room: https://www.bis.doc.gov/index.php/2011-09-13-18-45-55
BIS Lists of Parties of Concern: https://www.bis.doc.gov/index.php/policy-guidance/lists-of-parties-of-concern
International Traffic in Arms Regulations (ITAR)
U.S. Department of State Directorate of Defense Trade Controls (DDTC): https://www.pmddtc.state.gov/
DDTC Understand the ITAR and Export Controls: https://www.pmddtc.state.gov/?id=ddtc_public_portal_itar_landing
Office of Foreign Asset Control (OFAC)
U.S. Department of Treasury Office of Foreign Assets Control (OFAC): https://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx
OFAC Consolidated Sanctions List Data Files: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/consolidated.aspx
OFAC Specially Designated Nationals and Blocked Persons List (SDN) Human Readable Lists: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx