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June 3, 2013

Will Metcalf, J.D., CCEP, CHC, CIA

Federal regulations that govern how certain information, technologies, and commodities can be transmitted overseas to anyone, including U.S. citizens, or to foreign nationals on U.S. soil.

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◦ Classified items and technology (NISPOM)

◦ Defense articles and technical data (ITAR)

◦ Dual use items and technology (EAR)

◦ Embargoed countries (OFAC)

Deemed exportrule

Any person who intends to export a defense article must obtain the approval of the DDTCunless an exemption applies - § 123.1

Defense Article - § 120.6 - Any item or technical data designated on the USML◦ Category XI – Military Electronics◦ Category XXI – Miscellaneous Articles Any article not specifically enumerated in the other

categories of the USML which has substantial military applicability and which has been specifically designed or developed for military purposes

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Technical Data - § 120.10 - information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. ◦ Does not include fundamental research or information in the

public domain. University research is not fundamental research if: The Univ. accepts restrictions on pub. of results, or The research is funded by the U.S. Govt. and specific access and

dissemination controls protection research results are applicable

Public Domain - § 120.11 - information which is published or generally accessible to the public

Export - § 120.17 –◦ (1) Sending or taking defense article outside of the U.S. ◦ (3) Disclosing or transferring technical data to a

foreign person, whether in the U.S. or abroad

Foreign Person - § 120.16 – Any natural person who is not a lawful permanent resident (Green Card) or who is not a protected individual

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EAR covers any item in U.S. trade (goods, technology, information). However, items listed on the Commodity Control List (CCL) may require a license for export.

“Dual use” equipment, materials and other technologies with both commercial and military applications (e.g., encryptionsoftware and advanced GPS) are listed on the CCL.

OFAC enforces economic and trade sanctions against specific foreign countries, terrorists, international narcotics traffickers, and those engaged in weapons of mass destruction proliferation.

Countries currently sanctioned are the Balkans, Burma, Cuba, Iran, Iraq, Liberia, Libya, North Korea, Sudan, Syria, and Zimbabwe. This list is subject to change.

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Unless the fundamental research exclusion applies, a university’s transfer of controlled (on the CCL or the USML) technology to a non-permanent resident foreign national may require a license from the Departments of Commerce or State and/or be prohibited

EAR – not overly complicated, can apply electronically, no fee◦ Deemed Export license required for foreign national working

with certain controlled proprietary technology◦ License needed to ship certain goods/technologies outside the

U.S.

ITAR – very complicated and expensive◦ DSP-5/Technical Assistance Agreement required for foreign

nationals working with export controlled technology/defense service

◦ Technology Control Plan required

OFAC – application by letter, no fee

All license applications can take three to six months

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Dr. Roth, Univ. of Tenn. – Convicted of exporting “defense articles and services” without a license – Sentenced to four years in prison (Dept. of State)◦ U.S. Air Force sought to develop plasma actuator

technology to advance flight controls for military UAVs through R&D contract with AGT

◦ AGT and Roth (UT Plasma Lab) developed ITAR (“export controlled”) technical data during the USAF project

◦ Roth both (1) disclosed ITAR technical data to foreign persons and (2) transported it to the PRC. A

AGT and Dr. Roth agreed to include a PRC foreign national graduate student in the USAF research project.

An initial attempt was made to “wall off” the PRC graduate student from the export controlled research in an effort to evade export control restrictions. University of Tennessee officials were not consulted on this plan.

This “ITAR wall” was torn down to accelerate the project. Export controlled Technical Data was disclosed to both a PRC and Iranian graduate student.

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Signed by AGT President on 05/05/2005

5352.227-9000 “EXPORT CONTROLLED DATA RESTRICTIONS” (AFMC)(JUL 1997)

AGT Subcontract with UT Export Controlled Data Restrictions

Signed by both UT Official and Dr. Roth on April 29, 2005.

Evidence of Dr. Roth’s Knowledge and Intent

Statement of Work on What I Want to Do

Export Controlled Data for Munitions

AGT provides Test Stand, Misc. Testing Eq.

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Dr. Roth provided a Defense Service by allowing access and training to foreign national graduate students on the Force Stand that was used to generate the Technical Data

The “Force Stand” used to produce the ITAR Technical Data developed in the USAF Project

Example of a Defense Article that was used to provide Defense Services

Iranian foreign national graduate student worked, at Dr. Roth’s direction, on the Force Stand. A detailed explanation of the capabilities and operation of the Force Stand was provided to him.

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Management Commitment

Risk Assessment

Written EMCP

Training

Pre/ Post award and ScreeningRecordkeeping

Auditing

Violations

Corrective Actions

Risk Assessment&

Management Commitment &

Appropriate Compliance Program

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Sponsored research containing contractual restrictions on publication or dissemination – Removes fundamental Research Exemption

Research in export restricted science and engineering areas

Use of 3rd Party Export Controlled Technology or Information – Could be from purchasing equipment or from research contract requiring access.

Shipping or Traveling Internationally - University activities that involve the transfer of project information, equipment, materials, or technology out of the U.S. by whatever means will be subject to export controls and may require export license(s).

International Consulting or Research - Research projects where any part of the research will take place outside the U.S. or providing professional consulting services overseas can result in the export violation.

Dealing with Denied or Sanctioned Individual or Entity

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Management Policy Statement

1) Introductory Statement of Management Commitment to Export Compliance

2) Deemed Export Risk Statement3) Penalties Statement4) Who To Direct Questions5) Employee Acknowledgement/Receipt

October 23, 2012

Memorandum For All Employees and Contractors

From President and Provost:

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Vital to the success of your export compliance program

Vital to the success of your export compliance programAccess to and

support from specific corporate level officer

Access to and support from specific corporate level officer

Senior level and empoweredSenior level and empowered

1. Written Export Management ProgramExample – Georgetown

2. Classified & Sensitive Research PolicyExample - Berkley

3. Review of Research Agreements for Troublesome Contract Clauses

4. Review of International Activities5. Review of I-129 Visas6. Review of Purchasing Agreements

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Checklist for grant and contract administrators Publication/participation restriction Access to ITAR equipment or technical data DoD, NASA, SBIR/STTR (DoD/NASA Prime), International Project involves international shipment or travel

Troublesome contract clause Example, Tennessee

I-129 Review ProcedureRequired to certify that no export license required

International travel guidance documents

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William A. Metcalf, J.D., CHC, CCEP

University of Louisville Director of Export &Secure Research Compliance

502-852-1708will.metcalf@louisville.edu