Export Control

 

Definitions

International Traffic in Arms Regulations (ITAR): The ITAR is a set of federal regulations used primarily to control the import and export of defense articles (specifically designed and/or modified for defense purposes) and defense services.

 

Office of Foreign Asset Controls (OFAC): A department of the U.S. Treasury that enforces economic and trade sanctions based on U.S. foreign policy, against countries and groups of individuals involved in terrorism, narcotics, the proliferation of weapons of mass destruction, and other activities that threaten national security, foreign policy, and/or the economy of the United States.

 

Export Administration Regulations (EAR): The Export Administration Regulations are a set of federal regulations that regulate the export and re-export of most commercial “dual use” items (not necessarily funded or specifically designed for a defense purpose, but capable of performing a defense function).

 

Commerce Control List (CCL): The Commerce Control List is a list that includes commodities, software and technology subject to the export licensing authority of the Bureau of Industry and Security. The CCL is contained in Supplement No. 1 to Part 774 of the EAR.

 

Export Control Classification Number (ECCN): An export control classification number is an alpha-numeric code, e.g., 3A001, used by the Department of Commerce to classify most commercial items. An ECCN describes a particular item or type of item, and show the controls placed on that item. All ECCNs are listed in the Commerce Control List (CCL) (Supplement No. 1 to Part 774 of the EAR).

 

United States Munitions List (USML): The United States Munitions List includes articles, services and related technical data designated as defense articles and defense services. The State Department has state that the USML is illustrative only, meaning that the absence of an item on the USML does not conclusively rule out the possibility of it being a defense article or defense service.

 

Commodity Jurisdiction: While Directorate of Defense Trade Controls (DDTC) has jurisdiction over deciding whether an item is ITAR- or EAR-controlled, it encourages exporters to self-classify the item. If doubt exists as to whether an article or service is covered by the U.S. Munitions List, upon written request in the form of a Commodity Jurisdiction (“CJ”) request, DDTC will provide advice as to whether a particular article is subject to the ITAR, or a dual-use item subject to Commerce Department licensing. Determinations are based on the origin of the technology (i.e., as a civil or military article), and whether it is predominantly used in civil or military applications.

 

Export: An export is the transfer of export-controlled data, items, equipment, materials, and software or providing a defense service to a non-U.S. person or entity. An export can occur in a number of ways, such as: a physical shipment, hand-carrying an item out of the U.S., email transmission of data, presentations, discussions, or visually accessing export-controlled data.

 

Deemed Export: A deemed export is the release or transmission in any form of export-controlled technology or software code within the U.S. to anyone who is not a U.S. person.

 

Re-export: This refers to an actual shipment or transmission of controlled tangible items, software or information from one foreign country to another foreign country. The export or re-export of controlled tangible items, software or information that will transit through a country or countries, or will be unloaded in a country or countries for reloading and shipment to a new country, or are intended for re-export to the new country, are deemed to be exports to the new country.

 

Exclusions: For University research, there are three (3) ways that technical information may qualify for an exclusion from the deemed export rule. Information is excluded if it:

• Is published or disseminated in the Public Domain;
• Arises during, or results from, fundamental research;
• Is educational information released by instruction in catalog courses or associated teaching laboratories of academic institutions.

Fundamental Research Exclusion: The fundamental research exclusion is a broad-based general legal exclusion to protect technical information (but not tangible items) involved in research from being controlled by export controls. Research qualifying as “fundamental research” is not subject to export controls.

• The EAR definition of fundamental research means research in science, engineering, or mathematics, the result of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons.
• The ITAR defines fundamental research as basic and applied research in science and engineering conducted at accredited U.S. institutions 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 and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary reasons or specific national security reasons.
• University research will not qualify as fundamental research if the university or research accepts any restrictions on the publication of the information resulting from the research, other than limited prepublication reviews by research sponsors to prevent inadvertent divulging of proprietary information provided to the researcher by sponsor or to ensure that publication will not compromise patent rights of the sponsor.

NOTE: 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. Such controls are usually contained in contractual clauses (e.g., publication “approval” by the Government; restrictionss on 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).

 

Educational Information Exclusion: The educational exclusion covers information commonly taught in catalogues and associated teaching laboratories of academic institutions in the U.S.

Public Domain: The public domain exclusion applies to information that is published and that is generally accessible or available to the public through:

• Sales at newsstands and bookstores;
• Subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information;
• Libraries open to the public or from which the public can obtain documents;
• Patents available at any patent office;
• Unlimited distribution at a conference, meeting, seminar trade show or exhibition, generally accessible to the public, in the United States;
• Public release (i.e., unlimited distribution) in any form (e.g., not necessarily in published form) after approval by the cognizant U.S. government department or agency.

Technical data: Is a term defined in the International Traffic in Arms Regulations (ITAR) as information, which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles and software directly related to defense articles. This definition does not include information concerning the general scientific, mathematical, or engineering principles commonly taught in schools, colleges and universities. This definition also does not include basic marketing information on function or purpose or general system descriptions of defense articles.

 

Technology: Is defined by the Export Administration Regulations (EAR) as specific information necessary for the “development”, “production”, or “use” of a product. Technical data and technology may take the form of blueprints, drawings, manuals, models, specifications, tables, formulas, plans, instructions, or documentation.

 

Development: Refers to activities related to all stages prior to serial production such as: design, design research, design analysis, design concepts, assembly and testing of prototypes, pilot production schemes, design data, process of transforming design data into a product, configuration design, integration design, layouts.

 

Defense Article: Defense articles are all items, data specifically designed, developed, configured, adapted, or modified for a military application. Defense articles are listed on the U.S. Munitions List (22 CFR Section 121.1).

 

Defense Service: A defense service is furnishing of assistance to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; or furnishing to foreign persons of any technical data controlled whether in the United States or abroad.

 

Dual use item: These are items and associated technologies that are commercially available and also have military or proliferation applications. Items determined to have a dual capability are enumerated in the Commerce Control List.

 

Military End Use: A “military end user (MER)” is any person or entity whose actions or functions are intended to support “military end Uses”, including the national armed services (army, navy, marine, air force, or coast guard) as well as the national guard and national police, government intelligence or reconnaissance organizations (15 CFR 744.21 (g)).

Under the recent changes, the definition of “military end use (MEU)” was broadened to include “any item that supports or contributes to the operation, installation, maintenance, repair, overhaul, refurbishing, “development,” or “production,” of military items described on the USML,; or items classified under the ECCNs ending in “A018”; or under the “600 series” ECCNs. (15 CFR 744.21 (f)).

While the definition of “military end user” has not changed, there will likely be more individuals and/or entities based in China, Russia and/or Venezuela who the U.S. government defines as engaging in activities that now constitute a military end use. Note that many individuals and entities from these countries, including research institutions, who are not defense identified per se, but perform work for or receive funding from the national military, may now fall under the military end user definition.

When and individual from China, Russia, and/or Venezuela is determined to be a military end user, or the individual/entity is engaging in a military end use, exports of items and technical data listed in EAR Supplement 2 to Part 744 require an export license from BIS. Currently, those license requests are under a presumption of denial, indicative of the scrutiny that BIS is applying to this category of transaction and the enforcement consequences of violating this new provision.

However, even where no military user/end use is identifiable in the export transaction, the export of any item to these countries still requires the normal evaluation of whether a license is required pursuant to the CCL. Country chart-listed controls and OFAC controls.

These requirements also potentially inform deemed exports of technical data identified in EAR Supplement 2 to Part 774. A deemed export to a “military end user” of controlled technical data on Supplement 2 would require a license. Where no “military end user” is involved or otherwise implicated in the transaction, the normal deemed export rules apply with respect to “use”, “development,” or “production” technology with respect to foreign nationals from these three countries.

As a pragmatic consequence of these new rules, OSU faculty/staff conducting research or services activities in the U.S. are advised to exercise due diligence with respect to the sponsoring/home/affiliated institution or entity and any apparent indicia of military or defense-related activities. For assistance determining whether a part is a military end user, contact the Office of Research Security and Export Compliance.

 

EEI Requirements: Transfers (Electronic and Hand-carried) and Shipping to China, Russia, and Venezuela

• All shipments of items listed in Supplement 2 destined for China, Russia, and/or Venezuela now require EEI filing [LD2], regardless of whether the consignee is a “military end user.”
• Likewise, shipment of all items with a designated ECCN (including those liste on Supplement 2) that are exported to any party in China, Russia, and/or Venezuela will likewise require an EEI filing [LD3]. This could potentially include may items shipped to support academic or capacity/resource activities, including but not limited to non-EAR99 laptops, software, and laboratory equipment.
• Items classified as EAR99 do not require EEI filing (unless the value exceeds $2,500). Intangible exports (such as software downloads) do not require EEI Filing.
• Supplement 2 to Part 774 – List of ECCNs Subject to Part 744 Regulations

Production: Production refers to all stages related to producing a product, including product engineering, manufacturing, integration assembly (mounting), inspection, testing, quality assurance.

 

Use: This refers to operation, installation (including on-site installation), maintenance (checking), repair, overhaul, and refurbishing. However, certain technology controls may apply when information is gained through only one of these types of activities.

 

Technology Control Plan: A Technology Control Plan (TCP) is a protocol that outlines the procedures to secure certain export-controlled items (technical data, materials, software, or hardware) from unauthorized use, access, and observation by non-U.S. persons. The Export Control Officer, with assistance from the Principal Investigator (PI), will develop a TCP that is designed for the specific project. The PI is the ultimate responsible party for adherence to the TCP by project personnel. All project personnel listed on the TCP are required to complete export control training every two (2) years. The TCP remains in effect for as long as Oklahoma State University retains the export-controlled data or item, even if the project is over. The Export Control Offices will conduct an annual audit to ensure compliance with the TCP.

 

U.S. Person: An individual with U.S. citizenship, Permanent resident alien (Green Card Holder) or protected individual status such as refugees and asylees. Corporations or organizations incorporated in the United States are U.S. persons for the purpose of the ITAR and EAR. It is also any business entity incorporated to do business in the United States.

 

Non-U.S. Person (Foreign Person): A non-U.S. person is anyone who is not a U.S. person. The law makes no exceptions for foreign graduate students. A non-U.S. person, also referred to as a Foreign Person, includes any foreign corporation, business association, partnership trust, society, or any other entity that is not incorporated or organized to do business in the United States. This definition included international organizations, foreign governments, and any agency or subdivision of foreign governments (e.g., diplomatic missions).

 

Foreign Entity: A foreign entity is any corporation, business association, partnership, trust, society or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments and any agency or subdivision of foreign governments. A person (even U.S. citizen) is considered a foreign person if they work for, or represent, a foreign entity.

 

Bona fide full-time employee: Export control regulations exempt disclosures of unclassified technical data in the United States by U.S. universities to foreign nationals where:

• The foreign national is the University’s bona fide full-time regular employee;
• The employee’s permanent abode throughout the period of employment is in the United States;
• The employee is not a national of an embargoed country; and
• The University informs the employee in writing that information disclosed may not be disclosed to other foreign nationals without government approval.