Ethics, Compliance and Audit Services
Export control compliance: Frequently Asked Questions
- What is an export?
- What is "technology" or "technical data"?
- What are the penalties for violating the export regulations?
- What is not subject to the deemed export regulations?
- What is "published" information?
- What is information resulting from "fundamental research"?
- What is "educational" information?
- What kinds of controls in a government-sponsored research project would compromise the fundamental research exemption?
- Is a "deemed export" license required in order for foreign nationals to use controlled equipment in research projects, classes, and teaching labs on campus?
- How do I ship a controlled item or commodity out of the United States?
What is an "export"?
In addition to actual shipment of a commodity out of the country, the export regulations also control the transfer, release or disclosure to foreign persons in the United States of technical data about controlled commodities. The "deemed export" regulation states that a transfer of "technology" (EAR term) or "technical data" (ITAR term) to the foreign person is "deemed" to be an export to the home country of the foreign person. Accordingly, for all controlled commodities, a license or license exception is required prior to the transfer of "technology" or "technical data" about the controlled commodity to foreign persons inside the U.S.
What is "technology" or "technical data"?
These phrases refer to technical information beyond general and basic marketing materials about a controlled commodity. They do not refer to the controlled equipment/commodity itself, or to the type of information contained in publicly available user manuals. Rather, the terms "technology" and "technical data" mean specificinformation necessary for the development, production, or use of a commodity, and usually takes the form of blueprints, drawings, photographs, plans, diagrams, models, formulae, tables, engineering specifications, and documentation. The "deemed export" rules apply to transfer of such technical information to foreign nationals inside the U.S.
What are the penalties for violating the export regulations?
Violations can result in both civil and criminal penalties for the individual and for the institution. In addition to a civil penalty not to exceed $10,000 for each violation of the export regulation, there are criminal penalties that may be imposed, including a fine of up to $1 million against an entity, such as the University of California, and a fine of up to $250,000, or imprisonment of not more than 10 years, or both against an individual. Voluntary self-disclosures, if made appropriately, can mitigate the seriousness of the penalty. Penalties apply to each individual violation, which means that if a violation relates to more than one controlled material or item or occurs on more than one occasion, each item or incident may trigger a penalty. Contact your campus Office of Research immediately if you think you have made a mistake and violated export controls; they can help assess how best to remedy the situation.
What is not subject to the deemed export regulations?
Technical data that is "in the public domain" under ITAR (22CFRPart120(a)(5) and Part 120.11(a)) or "publicly available" under EAR (15CFRPart734(b)(3), including "fundamental research", is not subject to deemed export controls. Accordingly, the compliance plan at the University of California is based largely upon insuring that research results generated at the University meet the standards for "publicly available" thereby avoiding the necessity of securing a license prior to dissemination of information to foreign nationals involved in the research, including graduate students, post doctoral scholars, and visiting scientists. For University-based research, there are three different ways that the technical information may qualify for an exemption from the deemed export regulations. It is exempt if it:
- Is published or disseminated (as described at 15CFR734.7 and 22CFR120.11(a)(1) through (7))
- Arises during, or results from, fundamental research (as described at 15CFR734.8 and 22CFR120.11(a)(8)), or
- Is educational information (as described at 15CFR734.9 and 22CFR120.10(a)(5)) released by instruction in catalog courses or associated teaching laboratories of academic institutions.
What is "published" information?
Information is "published" (and therefore not subject to export controls) when it becomes generally accessible to the interested public in any form, including: (1) publication in periodicals, books, print, electronic, or other media available for general distribution (including websites that provide free uncontrolled access) or to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline, either free or at a price that does not exceed the cost of reproduction and distribution; (2) readily available at libraries open to the public or at university libraries; (3) patents and published patent applications available at any patent office; and (4) release at an open conference, meeting, seminar, trade show, or other open gathering held in the U.S. (ITAR) or anywhere (EAR). Note, a conference or gathering is "open" if all technically qualified members of the public are eligible to attend and attendees are permitted to take notes or otherwise make a personal record of the proceedings and presentations. A conference is considered open notwithstanding a registration fee reasonably related to cost, and there may be a limit on actual attendance as long as the selection is either 'first come' or selection based on relevant scientific or technical competence.
What is information resulting from "fundamental research"?
The export control regulations exempt from licensing requirements technical information (but not controlled items) resulting from "fundamental research." Fundamental research is defined as basic and applied research in science and engineering conducted at an accredited U.S. institution of higher education where the resulting information is ordinarily published and shared broadly within the scientific community. Such research can be distinguished from proprietary research the results of which ordinarily are restricted for proprietary reasons or specific national security reasons. Research conducted by scientists, engineers, or students at a university normally will be considered fundamental research. The fundamental research exclusion permits U.S. universities to allow foreign members of their communities (e.g., students, faculty, and visitors) to participate in research projects involving export-controlled technical information on campus in the U.S. without a deemed export license. Further, technical information resulting from fundamental research may be shared with foreign colleagues abroad and shipped out of the United States without securing a license.
Prepublication review by a sponsor of university research solely to ensure that the publication does not compromise patent rights or inadvertently divulge proprietary information that the sponsor has furnished to the researchers does not change the status of the research as fundamental research, so long as the review causes no more than a temporary delay in publication of the research results. However, if the sponsor will consider as part of its prepublication review whether it wants to hold the research results as trade secrets (even if the voluntary cooperation of the researcher would be needed for the company to do so), then the research would no longer qualify as "fundamental". As used in the export regulations, it is the actual and intended openness of research results that primarily determines whether the research counts as "fundamental" and not subject to the export regulations. University based research is not considered "fundamental research" if the university or its researchers accept (at the request, for example of an industrial sponsor) restrictions on publication of scientific and technical information resulting from the project.
What is "educational" information?
Whether in the U.S. or abroad, the educational exclusions in EAR and ITAR cover instruction in science, math, and engineering taught in courses listed in catalogues and associated teaching laboratories of academic institutions, even if the information concerns controlled commodities or items. Dissertation research must meet the standards for "fundamental research" to qualify as "publicly available."
What kinds of controls in a government-sponsored research project would compromise the fundamental research exemption?
If the U.S. Government funds research and specific controls are agreed on to protect information resulting from the research, then information resulting from the project will not be considered fundamental research. Examples of "specific controls" include requirements for prepublication review by the Government, with right to withhold permission for publication; restrictions on prepublication dissemination of information to non-U.S. citizens or other categories of persons; or restrictions on participation of non-U.S. citizens or other categories of persons in the research.
Is a "deemed export" license required in order for Foreign Nationals to use controlled equipment in research projects, classes, and teaching labs on campus?
No, actual use of equipment by a foreign national in the U.S. is not controlled by the export regulations. Indeed, inside the United States, any person (including foreign nationals) may purchase export-controlled commodities, and the "deemed" export rule only applies to technical information about the controlled commodity. As such, while the use of equipment inside the U.S. is not controlled, the transfer of technical information relating to the use (i.e., operation, installation, maintenance, repair, overhaul and refurbishing) of equipment may be controlled in certain circumstances.
For example, if the manufacturer of the equipment provided the University some confidential, proprietary information about the design or manufacture of the equipment, then the University might need a "deemed" export license to provide such proprietary information to a foreign national, especially if shipment of the item to the home country of the foreign national would require an export license. In sum, the export regulations allow foreign students, researchers and visitors to use (and receive information about how to use) controlled equipment while conducting fundamental research on U.S. university campuses or while studying at the institution, as long as the technical information about the controlled equipment qualifies as "in the public domain" or "publicly available."
How do I ship a controlled item or commodity out of the United States?
The transfer of commodities and equipment is only controlled by the export regulations when the item is shipped out of the country. Licenses to ship an item outside the United States are required even when the item or equipment is used in or results from fundamental research.
If a commodity is controlled under ITAR, then a license is always required before it can be shipped to any country outside the United States, except in limited circumstances such as shipment to a military base overseas. Licenses are also required to import such items. The University of California Office of the President handles ITAR licenses. Except for faculty involved in space-based research, in most cases the University is not fabricating or shipping ITAR controlled items, since these are generally items specifically designed for military purposes.
For commodities controlled under EAR, whether a license is required depends upon the country to which the item is being shipped. Even in cases where license approval from the Department of Commerce is not required to ship the item to the country, there are administrative requirements and records that must be maintained (see 15 CFR Part 762) regarding shipments of EAR controlled items out of the United States. The campus Vice Chancellor for Research can assist you in determining whether a specific license is required, will secure a license when needed, and can advise you on what records need to be maintained in cases where the item can be shipped without a license.