Restricted Parties

 

What is a Restricted Party: Export Control regulations across various governing agencies (including but not limited to the Departments of Commerce and State) broadly restrict a U.S. person (which for the purposes includes a U.S. institution, such as OSU) from conducting or facilitating an export, re-export, and/or deemed export, with watch-listed persons or entities who have been flagged because of national security, nuclear, chemical/biological, economic sanctions or other federal concerns. These prohibitions also extend to conducting financial and/or service transactions with so-called “blocked” or “prohibited” persons or entities identified by the Treasury Department’s Office of Foreign Assets Control (OFAC) Specifically Designated Nationals List (SDNL). It should be noted that these lists identify U.S.-based as well as international persons and entities. A significant number of international institutions including (but not limited to) research universities and institutes are Restricted Parties.

 

Conducting a transaction with such persons or entities may be subject to license approval or a presumption of license denial, depending on the person, entity, and basis of agency control. Acting without a license can result in significant personal as well as institutional sanctions and penalties.

 

Changes to the List of Restricted Parties: Each of the agencies identifies their respective watch-list entities through publication in the Federal Register: new names and entities are added periodically. These requirements are conservatively (and more broadly) interpreted by industry, higher education, and research institutions to mean “not conducting business with” so as to avoid any unauthorized activity subject to these restrictions. U.S. universities and research institutions (including health science research institutions) are, in fact, often solicited by restricted parties who wish to benefit from a research, education, or business relationship.

 

Transactions Involving Restricted Parties: Export transactions involving restricted individuals and entities are generally prohibited without an export license or other approval, including the transfer of EAR99 items (ex. Clothing, toiletries, basic supplies, briefcases, etc.) and technology. Manyof the listed persons and entities are restricted from receiving exports of U.S. technology that are not necessarily defined as controlled per se (based on specifications and capability) but are simply not in the public domain (i.e., “EAR99” information).

 

International Institutions of Higher Education may be Restricted Parties: All institutions (as well as other entities) located in a Comprehensively Sanctioned country (currently Iran, Syria, Cuba and North Korea) are Restricted Parties. Likewise, China is home to well over 200 restricted institutions (a number of which are research and teaching entities). Because China represents one of the fastest growing regions in terms of U.S. joint research and educational exchange, U.S. entities are taking steps to ensure the fulsomeness of their restricted party screening procedures. This concern has been elevated by increased FBI visibility into the J-1 Exchange Visitors program and Confucius Institutes; NIH inquiries into conflict of interest with respect to NIH-funded programs; as well as recent restrictions under the National Defense Authorization Act (NDAA) relevant to procurement from two significant Chinese vendors, Huawei and ZTE.

 

Identifying Restricted Parties: The Federal Government maintains lists of restricted parties (individuals and organizations). Collaborating with restricted parties can create export control risks, including federal violations, as well as raise your risk profile. Federal funding agencies are conducting foreign influence security reviews on researchers, even on fundamental research projects. The risk matrices vary by agency, and the restricted party lists change over time, so please contact Export Controls to have a Restricted Parties screening conducted.

 

Robust screening identifies individuals and entities subject to U.S. government export or payment authorization requirements or with whom engagement is prohibited altogether. The various Restricted Party lists may be referenced on the agencies websites, or by using the federal Consolidated Screening List. However, checking the Consolidated List at a single point in time risks missing later additions to the lists and may take extensive time to check multiple parties. To better support OSU personnel, OSU utilizes Visual Compliance Restricted Party screening software. Visual Compliance allows users to screen a party once, and then receive notifications of any later changes to those results. RPS screens using Visual Compliance are easy to complete. In order to have a Restricted Parties screening completed, please follow the instructions on the Restricted Party Screening Request page.

Who to Screen: Below is a list of entities that we recommend should be screened, prior to formal or executed agreement with such party:

• Domestic and International Industry Research Sponsors
• External (non-OSU) core lab facility users and fee-for-service customers
• Parties to inter-institutional MOU and MOA joint venture and affiliation agreements, including (but not limited to) scientific exchange programs, research collaboration, and academic exchange agreements
• Domestic and International Vendors and subcontractors
• Non-Disclosure Agreement (NDA) and Material Transfer (MTA) partners
• Recipients/consignees of international shipments, including those who are not already screened as part of the MTA process
• J-1 Visa Visitor Exchange candidates as well as affiliated/home institutions (where known) of J-1 candidates
• International donors of financial gifts
• Commercial licensees of patented technology as well as unpatented “know-how” license agreements (as applicable)
• Investors in related spin-off companies
• On-line course registrant (who are not otherwise OSU faculty/staff/students)
• International recipients of reimbursement payments, to the extent not covered through vendor screening
• Visiting delegations to the campus from international institutions (name of institution and individuals)

If you have any questions, please contact the Export Control Office

 

Restricted Parties/Denied Entities FAQs

• How can you request Restricted Party Screenings for your collaborators? 

  Email Export Control to request Restricted Party Screenings for any current or future collaborators including potential appointments, international collaborations including co-authors, and international conference organizers, etc. The screening will identify if a person or organization is on a U.S. restricted list.

• What happens if you are associated or affiliated with a restricted party?

  Every situation is different, so please contact the Export Control Office for a consultation and guidance. In addition, if you are sponsoring a research visitor and their home institution gets added to a restricted list, contact the Export Control Office for guidance.

• When a collaborator is from a restricted entity, what can you do with them?

  This is too broad a question to comprehensively cover in an FAQ, contact the Export Control Office for guidance. You cannot send (mail, fax, email) items (e.g. materials, substances, equipment, technical data, and unpublished data) to a denied entity without an export control license. However, the federal government will very likely deny the license request (i.e., there is a presumption of denial).

  Collaborating with an individual that is from a restricted entity – particularly if located in a country of concern (China, Iran, North Korea, Russia) – is extremely high risk. Collaborating with restricted entities on a federally funded project is likely prohibited by the award language and could also impact your future funding. At minimum, you will likely be asked to submit to a mitigation plan (reporting international travel well in advance, participating in research security and export control trainings, and/or possibly agreeing not to collaborate with any individual from countries of concern during the award period.

• What should I do if you are midstream on a collaboration with a restricted party?

  As soon as possible, discuss the situation with the Export Control Officer. There are research integrity considerations, in addition to research security concerns (malign foreign influence, risk profile impact, etc). For example, we do not advise that you simply take someone’s name off a potential publication. This could trigger research integrity issues and be perceived by federal funding agencies as concealing a foreign collaborator. However, do not send anything to the restricted entity if they are located outside the U.S. as it may need an export control license. You may be able to finish the manuscript without violating export control law, but please discuss with the Export Control Officer.

• Can I provide feedback on a paper initiated and led by a person from a restricted entity?

  This is an individual decision based on a benefit/risk analysis.  What is the benefit to you and to OSU? Is there any overlap with your federal funding? Would you be listed as a co-author? Depending on the answers this activity may raise your risk profile with federal funding agencies.

   

   

• Should I accept travel reimbursement or funding from a restricted party?

  Consult with the Export Control Officer but generally speaking the answer is “NO”. Doing so may be a violation of federal law and will almost certainly raise your risk profile with federal funding agencies. You cannot pay a restricted entity or party without advanced federal authorization (e.g., license or license exception).

• What criteria do federal agencies use to assess a researcher’s security risk profile?

  Examples of risk matrices used by funding agencies include DOD Risk Matrix (reference pages 9 – 12) and the Army Risk Matrix. Other agencies have similar matrices, by the Army’s list is the least risk tolerant. According to the DOD, simply co-authoring should not be the basis for the rejection of a proposal. Moreover, NSF has stated that simply co-authoring a paper will not raise your risk profile. NSF is rolling out their research security reviews in 2025 with a pilot program beginning with Quantum Technologies.

• What are examples of key restricted lists (note: the following list is not exhaustive)?
  • DOD 1286 list is one of the most problematic lists. The 1286 List includes foreign institutions that have been confirmed as engaging in problematic activity as described in Section 1286(c)(8)(A) of the NDAA for FY2019. Reference page 18 of the DOD Matix for the 1286 list but note that it changes over time.
  • Bureau of Industry and Security Entity List. The Bureau of Industry and Security (BIS) publishes the names of foreign persons – including entities (businesses, research institutions, governments, and private organizations) and individuals, that are subject to specific license requirement for the export, reexport a/or transfer (in-county) of specified items. These persons comprise the Entity List (ELT), which is found on Supplement No. 4 to Part 774 of the Export Administration Regulations (EAR). Entities included on this list are referred to as “Denied Entities”.
  • Australian Unitracker. The “Unitracker” is not a denied entity list per se, it is a list compiled by the Australian Think Tank with funding from the U.S. State Department’s Global Engagement Center. In some instances, but not all, Australian Unitracker entities may eventually appear on a U.S. Government-denied list.
• What does it mean to show up on a denied List? From an export control perspective, denied entities:
  • Require a federal license to share (ship, mail, or transfer) anything with a denied entity or 1286 entity. There is also a presumption of denial – the U.S. Government will almost certainly deny the license.
  • The U.S. government may occasionally grant visas for individuals who are affiliated with a denied entity or 1286 entity. If a visitor affiliated with a denied entity or 1286 entity is in the U.S. on a valid visa, you may generally collaborate with the individual on fundamental research. But the visitor cannot share items (data, equipment, materials, anything) with a denied entity (i.e., their affiliated institution). If the visitor returns to a denied or 1286 entity institution or leaves the U.S. and remains affiliated with the denied entity, you cannot collaborate with them without a license.
  • Additionally, the visitor may not be able to work on federally funded projects and collaborating with them, including publishing papers, may impact your future federal funding. The federal government has various risk matrices for federal researchers and one of the high-risk indicators is collaborating with restricted parties. Some awards may have prohibitions in the award terms.
  • Finally, working with or collaborating with a person associated with a denied or 1286 entity is an extremely high risk from a foreign influence perspective. It may negatively impact your future federal funding, particularly with the DoD. However, you will want to make sure you properly disclose any affiliation as underreporting this information can be problematic and violate federal law.
• Can you collaborate with an organization/entity/person on the Australian Unitracker list?
  You can collaborate with entities that are only on the Australian Unitracker list (i.e., they are not also on a U.S. restricted list). However, you need to be mindful when shipping or sending anything outside the U.S. Collaborations need to be reported to federal agencies. Any collaboration with a person associated with any university or organization from a country of concern (China, Iran, North Korea, and Russia) may likely impact your risk profile.
• What do you need to disclose in your OSU Conflict of Interest disclosure?
  • All foreign and domestic Significant Financial Interests (e.g., payments, equity, reimbursed travel, including “in kind” payments);
  • All external positions and appointments (e.g., board service, visiting or honorary appointments, serving as a PI or teaching/lecturing outside of OSU);
  • Any research support that did not go through OSU Sponsored Programs or the Foundation;
  • Any participation in a foreign talent program, maligned or otherwise.

  Disclosure is required through OneAegis within 30 days of acquiring or becoming aware of new relationship or financial interest. More information can be found in the Policy on Financial Conflict of Interest in Research.

• What is a Foreign Talent Recruitment Program and a Maligned Foreign Talent Recruitment Program?

  Definition can be found under Research Security on the Office of Research Security and Regulatory Trade Compliance website. If you are receiving compensation of any kind (monetary, honorariums, non-monetary, “In Kind”) from any foreign entity contact the Export Control. Note, if you are engaged in a Maligned Foreign Talent Program from a Country of Concern (China, Iran, Russia, North Korea) this precludes you from applying for or receiving U.S. Federal dollars.

• You cannot be a Maligned Foreign Talent Recruitment Program participant and apply for or receive federal funding?
  The federal government broadened the foreign talent plan definitions (malign and non-malign) and has prohibited participation in Maligned Foreign Talent Recruitment Programs if you receive federal funding.
• Where can I go to learn more?
  To assist Faculty, Staff and Students in navigating international partnerships, travel, visitor and many other topics, the Office of the Vice President for Research has established the Office of Research Security and Regulatory Trade Compliance which maintains a webpage with guidance on these topics.
• Separate from taking a go-forward approach pursuant to new agreement partners, do we need to screen the names of entities and signatories associated with existing, active contractual agreements and MOU’s?
  Yes! In order to minimize exposure to the fullest extent possible, it does not make sense to screen all existing, active agreement parties.
• What about legacy terminated agreements (entities and individuals)?
  Absent any knowledge ofthat an entity or signatory was (or may be) on a restricted party list, and absent any ongoing activity with such parties, most institutions do not perform retrospective screening pursuant to inactive parties and agreements. If you believe that you may have previously inadvertently engaged with a restricted part, please contact the Export Control Office.