““NatioNationalnal SecSecurity”urity”AKAAKA

“Economic Espionage”“Economic Espionage” AKAAKA

““Technology Theft”Technology Theft” AKAAKA

“Export Control”“Export Control”

Export Control Training brought to you by:Export Control Training brought to you by:

Scott FongScott Fongakaaka

The Compliance OfficerThe Compliance Officerakaaka

The Subcontracting OfficerThe Subcontracting Officer

1. 1. Purpose of the Purpose of the TrainingTraining

• Bad PressBad Press• Loss of Exporting PrivilegesLoss of Exporting Privileges• Organizational Civil and Criminal Organizational Civil and Criminal

Penalties Penalties (lawsuits, fines up to $1 million, time (lawsuits, fines up to $1 million, time in Jail)in Jail)

• Unhappy SponsorsUnhappy Sponsors• No More UARC No More UARC → No More Jobs→ No More Jobs

Reason #1: Protect the UARC and the University

1. 1. Purpose of the Purpose of the TrainingTraining

• Personal Criminal and Civil LiabilitiesPersonal Criminal and Civil Liabilities

CriminalCriminal: Fines up to $1,000,000 and/or : Fines up to $1,000,000 and/or up to 10 years in jail (ITAR) for up to 10 years in jail (ITAR) for eacheach violationviolation

CivilCivil: Fines up to $500,000 for : Fines up to $500,000 for eacheach violationviolation

Reason #2: Protect Yourself

1. 1. Purpose of the Purpose of the TrainingTraining

• Following the law feels good. You can sleep Following the law feels good. You can sleep better at night knowing that the FBI won’t come better at night knowing that the FBI won’t come knocking on your door.knocking on your door.

• Keeps dangerous technology out of the hands of Keeps dangerous technology out of the hands of those who would use it against the United those who would use it against the United States.States.

• Protects America’s military advantage in Protects America’s military advantage in technological superiority.technological superiority.

• Ensures American know-how benefits American Ensures American know-how benefits American companies, employees, consumers, and companies, employees, consumers, and economy.economy.

Reason #3: What one can do for one’s Country

1. 1. Purpose of the Purpose of the TrainingTraining

Intent is not to teach you how to be export Intent is not to teach you how to be export control officers.control officers.

Intent is to train you to identify situations Intent is to train you to identify situations when export control laws may or may not when export control laws may or may not apply.apply.

Reason #4: Teach you to identify export concerns

1. 1. Purpose of the Purpose of the TrainingTraining

Our Goal today is to educate UARC staff on Our Goal today is to educate UARC staff on applicable laws, identify when project applicable laws, identify when project information information maymay be export controlled, and be export controlled, and instruct such staff to involve the UARC instruct such staff to involve the UARC Compliance Officer Compliance Officer beforebefore possiblepossible export export controlled information is “exported”. [note controlled information is “exported”. [note italics]italics]

Reason #5: Establish the Goal of this training

2. 2. What is “Controlled”?What is “Controlled”?

Export of certain Export of certain goodsgoods, , servicesservices, & , & informationinformation are controlled by three are controlled by three government agencies:government agencies:

U.S. Department of StateU.S. Department of State Office of Defense Trade Controls (ODTC)Office of Defense Trade Controls (ODTC)

U.S. Department of CommerceU.S. Department of Commerce Bureau of Industry and Security (BIS)Bureau of Industry and Security (BIS)

U.S. Department of the TreasuryU.S. Department of the Treasury Office of Foreign Assets Control (OFAC)Office of Foreign Assets Control (OFAC)

2. 2. What is “Controlled”?What is “Controlled”?International Traffic in Arms Regulation International Traffic in Arms Regulation

(ITAR)(ITAR) Administered by the U.S. Department of State, Office of Defense Trade Administered by the U.S. Department of State, Office of Defense Trade

ControlsControls Regulates the export of “Regulates the export of “defense articlesdefense articles” and “” and “defense servicesdefense services” ”

Defense ArticleDefense Article: Any item or technical data* designated in U.S. Munitions List : Any item or technical data* designated in U.S. Munitions List or those items:or those items: Specifically designed, developed, configured, adapted, or modified for a Specifically designed, developed, configured, adapted, or modified for a

military application military application andand does not have: 1) predominant civil applications, or does not have: 1) predominant civil applications, or 2) performance equivalent (form, fit, function) to an article or service used 2) performance equivalent (form, fit, function) to an article or service used for civil applications (e.g. AA batteries).for civil applications (e.g. AA batteries).

Specifically designed, developed, configured, adapted, or modified for a Specifically designed, developed, configured, adapted, or modified for a military application, andmilitary application, and/OR*/OR* has significant military or intelligence has significant military or intelligence applicability such that control under this subchapter is necessary. (e.g. GPS applicability such that control under this subchapter is necessary. (e.g. GPS technology or Dialysis/Atomic triggers).technology or Dialysis/Atomic triggers).

*Technical data is “information which is required for the design, development, production, *Technical data is “information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes blueprints, drawings, photographs, plans, instructions, defense articles. This includes blueprints, drawings, photographs, plans, instructions, and documentation”.and documentation”.

2. 2. What is “Controlled”?What is “Controlled”?ITAR continuedITAR continued

Defense ServiceDefense Service: The furnishing of assistance or training in the design, : The furnishing of assistance or training in the design, development, engineering, manufacture, production, assembly, testing, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, repair, maintenance, modification, operation, demilitarization, destruction, processing, or use of Defense Articles.destruction, processing, or use of Defense Articles.

U.S. Munitions ListU.S. Munitions List – List of designated defense articles and defense services – List of designated defense articles and defense services subject to ITAR export controlsubject to ITAR export control

Category XV of the U.S. Munitions List is of special concern to UARC Category XV of the U.S. Munitions List is of special concern to UARC personnel: personnel: Spacecraft Systems and Associated EquipmentSpacecraft Systems and Associated Equipment..

FAR SummaryFAR Summary List is not dispositive. A Commodity Jurisdiction Procedure exists to List is not dispositive. A Commodity Jurisdiction Procedure exists to

obtain a determination from the Office of Defense Trade Controls for obtain a determination from the Office of Defense Trade Controls for articles or services not listed.articles or services not listed.

Don’t forget the EAR and OFAC lists.Don’t forget the EAR and OFAC lists. When in doubt, contact your UARC Compliance Officer.When in doubt, contact your UARC Compliance Officer.

For more information on ITAR, go to For more information on ITAR, go to http://pmdtc.org/reference.htm.http://pmdtc.org/reference.htm.

2. 2. What is “Controlled”?What is “Controlled”?

Export Administration Regulations (EAR)Export Administration Regulations (EAR) Administered by the U.S. Department of Commerce, Bureau of Administered by the U.S. Department of Commerce, Bureau of

Industry and Security (BIS)Industry and Security (BIS) Regulates the export of “dual-use items” and items with solely Regulates the export of “dual-use items” and items with solely

civil uses.civil uses. Items subject to EAR are listed in the Commerce Control List Items subject to EAR are listed in the Commerce Control List

(CCL)(CCL) 10 categories of export controlled items in the CCL:10 categories of export controlled items in the CCL:

• Nuclear Materials, Facilities, & Equipment and MiscellaneousNuclear Materials, Facilities, & Equipment and Miscellaneous• Materials, Chemicals, Microorganisms & ToxinsMaterials, Chemicals, Microorganisms & Toxins• Materials ProcessingMaterials Processing• Electronics Design, Development and ProductionElectronics Design, Development and Production• ComputersComputers• Telecommunications & Information Security (encryption)Telecommunications & Information Security (encryption)• Sensors and LasersSensors and Lasers• Navigation and AvionicsNavigation and Avionics• MarineMarine• Propulsion Systems, Space Vehicles and Related Equipment.Propulsion Systems, Space Vehicles and Related Equipment.

2. 2. What is “Controlled”?What is “Controlled”?EAR cont.EAR cont.

The 10 CCL categories are further subdivided intoThe 10 CCL categories are further subdivided into 5 5 Product Groups:Product Groups:

A.A. Systems, Equipment and ComponentsSystems, Equipment and Components

B.B. Test, Inspection and Production EquipmentTest, Inspection and Production Equipment

C.C. MaterialsMaterials

D.D. SoftwareSoftware

E.E. TechnologyTechnology

Example: Computers are a category in the Commerce Control List. Computer Example: Computers are a category in the Commerce Control List. Computer exports are regulated on several levels, called Product Groups, by the exports are regulated on several levels, called Product Groups, by the EAR. It might be possible to export a Dell computer system for example EAR. It might be possible to export a Dell computer system for example (i.e. product groups A, C, and D), but not possible to export (i.e. product groups A, C, and D), but not possible to export instructions/technical data on how to fabricate the computer and its instructions/technical data on how to fabricate the computer and its parts (product group E), or the equipment necessary to manufacture or parts (product group E), or the equipment necessary to manufacture or test the computer (product group B).test the computer (product group B).

2. 2. What is “Controlled”?What is “Controlled”?EAR Cont.EAR Cont.

EAR SummaryEAR Summary All items of US All items of US originorigin or or designdesign, regardless of actual geographical , regardless of actual geographical

location, is subject to the EAR unless there is a listed exclusion, or location, is subject to the EAR unless there is a listed exclusion, or item is subject to the jurisdiction of another federal department or item is subject to the jurisdiction of another federal department or agency (e.g. U.S. Department of State)agency (e.g. U.S. Department of State)

Commerce Control List can be extremely confusing to find the Commerce Control List can be extremely confusing to find the ECCN (Export Control Classification Number) for the technology ECCN (Export Control Classification Number) for the technology you wish to export. Even if you are certain the item is not listed on you wish to export. Even if you are certain the item is not listed on the CCL, there are still 10 additional General Prohibitions to the CCL, there are still 10 additional General Prohibitions to consider before exporting without obtaining a license from BIS. consider before exporting without obtaining a license from BIS. On top of this, there are specific persons, organizations, and On top of this, there are specific persons, organizations, and countries to which you cannot export. Conclusion: Do not conduct countries to which you cannot export. Conclusion: Do not conduct your own EAR export determination without help from the UARC your own EAR export determination without help from the UARC Compliance Officer and/or BIS.Compliance Officer and/or BIS.

Don’t forget the FAR and OFAC lists.Don’t forget the FAR and OFAC lists. When in doubt, contact your UARC Compliance Officer.When in doubt, contact your UARC Compliance Officer. For more information, go to: For more information, go to:

http://www.access.gpo.gov/bis/ear/ear_data.htmlhttp://www.access.gpo.gov/bis/ear/ear_data.html

2. 2. What is “Controlled”?What is “Controlled”?

U.S. Department of the TreasuryU.S. Department of the Treasury

Office of Foreign Assets Control (OFAC)Office of Foreign Assets Control (OFAC) Enforces economic and trade sanctions and embargoes against targeted Enforces economic and trade sanctions and embargoes against targeted

foreign countries, terrorists, international narcotics traffickers, and foreign countries, terrorists, international narcotics traffickers, and those engaged in the proliferation of weapons of mass destruction.those engaged in the proliferation of weapons of mass destruction.

Specially Designated Nationals (SDN) & Blocked Persons List (updated Specially Designated Nationals (SDN) & Blocked Persons List (updated frequently)frequently)

Some sanctioned countries include: Burma, Cuba, Iran, Liberia, North Some sanctioned countries include: Burma, Cuba, Iran, Liberia, North Korea, Sudan, Syria, and Zimbabwe.Korea, Sudan, Syria, and Zimbabwe.

Summary:Summary: Even if the EAR and FAR do not prohibit export, 1) verify Even if the EAR and FAR do not prohibit export, 1) verify the OFAC SDN List and sanctioned country lists do not include the the OFAC SDN List and sanctioned country lists do not include the foreign entity receiving the proposed export, and if they do, then 2) foreign entity receiving the proposed export, and if they do, then 2) ensure the scope of the sanction/embargo doesn’t include the ensure the scope of the sanction/embargo doesn’t include the technology to be sent. Coordinate all foreign exports through your technology to be sent. Coordinate all foreign exports through your UARC Compliance Officer. UARC Compliance Officer.

For more information, go to: For more information, go to: http://www.treas.gov/offices/enforcement/ofac/http://www.treas.gov/offices/enforcement/ofac/

3. 3. What is an “Export”?What is an “Export”? An “export” occurs anytime an item or information is An “export” occurs anytime an item or information is

exchangedexchanged Physical shipment or electronic transmission (phone, fax, email) Physical shipment or electronic transmission (phone, fax, email)

to foreign destinations or foreign personsto foreign destinations or foreign persons Releasing information in any format accessible to foreign persons Releasing information in any format accessible to foreign persons

(formal or informal conversations, pictures, internet, etc.)(formal or informal conversations, pictures, internet, etc.) Performing technical assistance, training, repair, or other Performing technical assistance, training, repair, or other

services for, or on behalf of, foreign persons or entities, whether services for, or on behalf of, foreign persons or entities, whether in the U.S. or abroad.in the U.S. or abroad.

Shipping items or data of U.S. origin from one foreign country to Shipping items or data of U.S. origin from one foreign country to another foreign country (a “re-export”).another foreign country (a “re-export”).

Sending money to a sanctioned foreign country.Sending money to a sanctioned foreign country. Shipping or transferring items/data to another U.S. person with Shipping or transferring items/data to another U.S. person with

knowledge that an export violation will occur is tantamount to a knowledge that an export violation will occur is tantamount to a prohibited export (“end use”).prohibited export (“end use”).

3. 3. What is an “Export”?What is an “Export”? U.S. Persons vs. Foreign PersonsU.S. Persons vs. Foreign Persons

U.S. persons are:U.S. persons are: Lawful Permanent Residents (U.S. citizen/national, legal Lawful Permanent Residents (U.S. citizen/national, legal

immigrants w/green card)immigrants w/green card) Protected Individuals (in the U.S. as a designated asylee/refugee, or Protected Individuals (in the U.S. as a designated asylee/refugee, or

temporary resident under amnesty), temporary resident under amnesty), unlessunless such protected such protected individuals fail to apply for citizenship w/in 6 months of eligibility, individuals fail to apply for citizenship w/in 6 months of eligibility, or have not been naturalized w/in 2 years of application.or have not been naturalized w/in 2 years of application.

Entities incorporated to do business in the U.S.Entities incorporated to do business in the U.S.

Foreign Persons are Foreign Persons are everyone else.everyone else. Foreign businesses doing business in the U.S. Foreign businesses doing business in the U.S. but not incorporated but not incorporated

in the U.S.in the U.S. are foreign persons. are foreign persons.

Dual-CitizensDual-Citizens Generally, the individual will be treated as a foreign national of the Generally, the individual will be treated as a foreign national of the

most sensitivemost sensitive country to which they hold citizenship. Dual-citizens country to which they hold citizenship. Dual-citizens who hold U.S. citizenship are who hold U.S. citizenship are sometimessometimes treated as U.S. persons, treated as U.S. persons, depending on the applicable law or agency.depending on the applicable law or agency.

3. 3. What is an “Export”?What is an “Export”? Deemed ExportsDeemed Exports

-- Nothing leaves the country, but information is impermissibly Nothing leaves the country, but information is impermissibly exchanged within our borders in violation of export laws. A exchanged within our borders in violation of export laws. A “deemed export” is:“deemed export” is:

A release A release within the U.S.within the U.S.,, Of Of technology or source codetechnology or source code,, Which is Which is subject to export regulationssubject to export regulations,, To a To a foreign person*foreign person*..

(* such a release is “deemed” to be an export to the home country of the foreign person.)(* such a release is “deemed” to be an export to the home country of the foreign person.)

Examples of Deemed Exports:Examples of Deemed Exports: Tours of laboratoriesTours of laboratories Foreign nationals employed in certain R&D (e.g. Alt II Foreign nationals employed in certain R&D (e.g. Alt II

tasks)tasks) Foreign students/scholars conducting researchForeign students/scholars conducting research Hosting foreign scientistsHosting foreign scientists ““Discussing” Alt II work with foreign personsDiscussing” Alt II work with foreign persons

3. 3. What is an “Export”?What is an “Export”? Summary:Summary:

Providing access to, or assistance with, controlled items Providing access to, or assistance with, controlled items or information to foreign persons without authorization or information to foreign persons without authorization from the appropriate branch of U.S. government is from the appropriate branch of U.S. government is illegal.illegal.

Exporting within U.S. borders is possible, called Exporting within U.S. borders is possible, called “deemed exports”, and subject to the same penalties as “deemed exports”, and subject to the same penalties as shipping outside U.S. borders.shipping outside U.S. borders.

Foreign businesses and corporations are considered Foreign businesses and corporations are considered “foreign persons”.“foreign persons”.

Shipping an item or providing information or a service Shipping an item or providing information or a service to someone with knowledge that an export violation will to someone with knowledge that an export violation will occur is a violation of export control laws.occur is a violation of export control laws.

4. 4. Exclusions and Exclusions and LicensesLicenses Exclusions Exclusions – – Types of technical data/information not subject to Types of technical data/information not subject to

export controlsexport controls

Public Domain Public Domain - publicly available information and software, published for - publicly available information and software, published for

sale, in public libraries, open conferences, and any work cleared by U.S. government agency for sale, in public libraries, open conferences, and any work cleared by U.S. government agency for unlimited public release. (e.g. non-proprietary information)unlimited public release. (e.g. non-proprietary information)

Educational InformationEducational Information – general scientific, mathematical, or – general scientific, mathematical, or

engineering principles commonly taught in colleges and universities.engineering principles commonly taught in colleges and universities.

PatentsPatents – FAR: information contained in patents available at any patent office; EAR: – FAR: information contained in patents available at any patent office; EAR:

information in a patent application and authorized for filing in foreign countries by US Patent information in a patent application and authorized for filing in foreign countries by US Patent and Trademark Office.and Trademark Office.

Fundamental ResearchFundamental Research – this exemption only applies to: – this exemption only applies to:

Technical dataTechnical data that that arises during or results from fundamental research (basic and applied), arises during or results from fundamental research (basic and applied), the results of which are ordinarily published and shared broadly within the scientific the results of which are ordinarily published and shared broadly within the scientific

community, and community, and have no restrictions on publication, dissemination, or access (other than for protection have no restrictions on publication, dissemination, or access (other than for protection

of proprietary information).of proprietary information).

4. 4. Exclusions and Exclusions and LicensesLicenses LicensesLicenses

If no exception or exclusion applies, then a If no exception or exclusion applies, then a license is required for the export or deemed license is required for the export or deemed export of controlled items, information, or export of controlled items, information, or services.services.

Obtained from BIS or ODTC as applicable.Obtained from BIS or ODTC as applicable. Coordinated by UARC compliance officer, UC Coordinated by UARC compliance officer, UC

Office of the President, and Sponsor (NASA).Office of the President, and Sponsor (NASA). Can take several weeks to several months to Can take several weeks to several months to

obtain a license.obtain a license.

5. 5. ConclusionConclusion

By now, the following should be apparent:By now, the following should be apparent: Alt I TasksAlt I Tasks: Export control laws do not apply : Export control laws do not apply

fundamental research (technology readiness level (TRL) still low)fundamental research (technology readiness level (TRL) still low) no access or foreign national restrictionsno access or foreign national restrictions work cleared by NASA for unlimited public releasework cleared by NASA for unlimited public release

Alt II TasksAlt II Tasks: Might include export controlled items: Might include export controlled items Export controlled items/data will be identified in the task Export controlled items/data will be identified in the task if knownif known

(current export determination not always available)(current export determination not always available) In general, foreign nationals are not allowed on task without prior In general, foreign nationals are not allowed on task without prior

approval and a technology control planapproval and a technology control plan Publication/dissemination/release of information restricted by Publication/dissemination/release of information restricted by

NASANASA

A A Data Management ResourceData Management Resource (DMR) is provided to all (DMR) is provided to all UARC task managers detailing specific data handling UARC task managers detailing specific data handling requirements for each task.requirements for each task.

Contact InfoContact Info

UARC Compliance OfficerUARC Compliance Officer

Scott FongScott FongPhone: 650-604-1284Phone: 650-604-1284Fax: 650-604-0500Fax: 650-604-0500Email: Email: scott.fong@adm.ucsc.eduscott.fong@adm.ucsc.eduNASA Research ParkNASA Research ParkBuilding 19, Room 1088Building 19, Room 1088P.O. Box 7, M/S 19-26P.O. Box 7, M/S 19-26Moffett Field, CA 94035Moffett Field, CA 94035