Background and Regulatory Overview
Concerns about the inappropriate transfer of new information, technologies, and products with military applications outside the U.S. have led to the passage of two laws in the late 1970's that control exports of selected technologies and products.
- INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR): The Arms Export Control Act (Sec.
38) of 1976, as amended (P.L. 90-629), authorizes (22 U.S.C., Chapter 39, Subchapter
III, Sec. 2778 entitled Control of Arms Exports and Imports) the President to:
- designate those items which shall be considered as defense articles and defense services, and
- control their import and the export.
- EXPORT ADMINISTRATION REGULATIONS (EAR): The Export Administration Act of 1979 authorized the President to regulate exports of civilian goods and technologies (equipment, materials, software, and technology, including data and know-how) that have military applications (dual-use items). Such controls have traditionally been temporary, and when it has lapsed, the President has declared a national emergency and maintained export control regulations under the authority of an executive order. 1
Implications for Researchers and Research-related Activities
The regulations cover virtually all fields of science and engineering. However, for reasons of national security or protection of trade they only prohibit the unlicensed export of certain materials or information. 3 In the case of academic or research institutions, there is an exclusion for "fundamental research, the results of which are or are about to be or, in some cases, ordinarily are publicly available." National Security Decision Directive (NSDD) 189established this as national policy position in 1985. In 1999, Congress transferred responsibility for commercial communications satellite technology to the State Department from the Commerce Department. Research activity that once was subject to the fundamental research exclusion under NSDD 189 was, for the first time, formally regulated and made subject to ITAR. 4
Consistent with NSDD 189, an Interim Final Rule (67 FR 15099) effective March 29, 2002 amended ITAR by establishing an exemption for accredited U.S. institutions of higher learning from obtaining a license for the permanent export, temporary export, and temporary import of most articles fabricated only for fundamental research purposes covered by Category XV paragraphs (a) or (e) of the U.S. Munitions List.
For the export of Category XV (a) or (e) articles, the exemption allows U.S. accredited institutions of higher learning to export most such articles as long as all of the information about the article, including its design, is in the public domain. Specifically, the export may only be made to accredited institutions of higher learning or government funded research institutions located in certain countries. 5 The exemption cannot be used for items listed in the Missile Technology Control Regime (MTCR) Annex or items designated as significant military equipment in the regulations.
Similarly, Section 734.3 paragraph (b) (3) of EAR exempts publicly available technology and software from controls, except for software controlled for "Encryption Item" reasons under Export Control Classification Number (ECCN) 5D002, Information Security - "Software", on the Commerce Control List and mass market encryption software with symmetric key length exceeding 64-bits controlled under ECCN 5D992, if it:
- Is already published or will be published;
- Arises during, or result from, fundamental research;
- Is educational; or
- Is included in certain patent applications
THEREFORE, it is essential for broad understanding and agreement of the following basic concepts related to export controls:
- The nature of the technology that is export controlled and how it is recognized,
- What is an "export" (ITAR) or a "deemed export" (EAR),
- The fundamental research exclusion and the meaning of "Public Domain", and
- Whether or not there are:
- restrictions imposed on publication of scientific and technical information resulting from the project or activity, OR
- controls imposed on access and dissemination of information resulting from the research by Federal funding agencies.
Previously, the most direct way to impose export restrictions was for the Federal funding agency to classify the project. Following the events of September 11, compliance with export regulations has come under greater scrutiny. As a publicly funded university, Michigan State University is committed to the widest possible dissemination of scientific endeavors and research results through fundamental research as outlined in NSDD 189; however, faculty, staff, and administrators are individually and collectively responsible for complying with export control laws and regulations even without the explicit imposition of ITAR or EAR requirements as a condition of acceptance of an award.
Penalties for Non-Compliance
Both ITAR and EAR authorize stiff penalties for violations and non-compliance and include the following administrative, civil, and criminal options: 6
- Administrative debarment from participating directly or indirectly in the export of defense articles, including technical data or in the furnishing of defense services for which a license or approval is required by this subchapter for any of the reasons listed below.
- Civil penalties not exceed $500,000 for each violation involving controls imposed on the export of defense articles and defense services.
- Criminal penalties not to exceed $1,000,000 for each violation, imprisonment not more than 10 years, or both for transactions with countries supporting acts of international terrorism under Sec. 2780.
- Individual criminal penalties for willful violations of up to $250,000 or imprisonment for up to ten years, or both, for each violation.
- Individual criminal penalties for knowing violations of up to the greater of $50,000 or five times the value of the exports or imprisonment for up to five years, or both, for each violation.
- Corporate criminal penalties for willful violations of up to the greater of $1,000,000 or five times the value of the exports for each violation.
- Corporate criminal penalties for knowing violations of up to the greater of $50,000 or five times the value of the exports for each violation
- Administrative penalties for each violation, including denial of export privileges, exclusion from practice, and/or the imposition of a fine of up to $12,000 for each violation, except that the fine for violations involving items controlled for national security reasons is up to $120,000 for each violation.
Interpreting and Understanding Export Control Requirements
ITAR Controlled Items
Defense articles (Sec. 120.6 & Part 121) include any item or technical data (recorded or stored in any physical form, models, mockups or other items that reveal technical data) designated in the U.S. Munitions List (see categories below) but not basic marketing information on function or purpose or general system descriptions.
- Artillery Projectors
- Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines
- Explosives, Propellants, Incendiary Agents, and Their Constituents
- Vessels of War and Special Naval Equipment
- Tanks and Military Vehicles
- Aircraft and Associated Equipment
- Military Training Equipment
- Protective Personnel Equipment
- Military Electronics
- Fire Control, Range Finder, Optical and Guidance and Control Equipment
- Auxiliary Military Equipment
- Toxicological Agents and Equipment and Radiological Equipment
- Spacecraft Systems and Associated Equipment—Higher educational institutions are exempted from obtaining a license for the export
of most articles in the public domain fabricated only for fundamental research under
paragraphs a and e to only institutions of higher learning or government funded research
locations in certain countries (Sec. 123.16, paragraph (b)(10)(i)). 5
a.) Spacecraft, including communications satellites, remote sensing satellites, scientific satellites, research satellites, navigation satellites, experimental and multi-mission satellites.
e.) All specifically designed or modified systems, components, parts, accessories, attachments, and associated equipment for the articles in this category, including the articles identified in §1516 of Public Law 105-261: satellite fuel, ground support equipment, test equipment, payload adapter or interface hardware, replacement parts, and non-embedded solid propellant orbit transfer engines.
- Nuclear Weapons Design and Test Equipment
- Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated
- Submersible Vessels, Oceanographic and Associated Equipment
- Miscellaneous Articles:
- Defense articles not specifically enumerated in the other categories that have substantial military applicability and that have been specifically designed or modified for military purposes. The decision on whether any article may be included in this category shall be made by the Director of the Office of Defense Trade Controls.
- Technical data (Sec. 120.21) and defense services (Sec. 120.8) directly related to the defense articles.
The determination for inclusion on the U.S. Munitions List is guided by the following criteria:
- specifically designed, developed, configured, adapted, or modified for a military application,
- does not have predominant civil applications, and
- does not have performance equivalent (defined by form, fit and function) to those of an article or service used for civil applications;
OR, for spacecraft systems under XV (a) and (e) that have dual uses
- specifically designed, developed, configured, adapted, or modified for a military application, and
- has significant military or intelligence applicability.
The intended use of the article or service after its export (i.e., for a military or civilian purpose) is not relevant in determining whether the article or service is subject to ITAR.
Defense services (Sec. 120.9) means assistance (including training) or furnishing of any technical data in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles whether in the U.S. or abroad to:
- people who are not lawful permanent residents of the U.S.
- organizations not incorporated or organized to do business in the U.S.
- foreign governments and any agency or subdivision of foreign governments (e.g. diplomatic missions)
EAR Controlled Items
The Commerce Control List (15 CFR Part 774) includes items (i.e., commodities, software, and technology) in ten categories (see categories below). Within each category, items are arranged by groups (see groups below).
- Nuclear Materials, Facilities and Equipment and Miscellaneous
- Materials, Chemicals, "Microorganisms," and Toxins
- Materials Processing
- Telecommunications and Information Security
- Lasers and Sensors
- Navigation and Avionics
- Propulsion Systems, Space Vehicles and Related Equipment
- Equipment, Assemblies and Components
- Test, Inspection and Production Equipment
- Sending or taking a defense article out of the U.S. in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data;
- Transfer of registration, control or ownership to a foreign person of any aircraft, vessel, or satellite, whether in the U.S. or abroad;
- Disclosure (including oral or visual disclosure) or transfer in the U.S. of any defense article to an embassy, any agency or subdivision of a foreign government (e.g., diplomatic missions);
- Disclosure (including oral or visual disclosure) or transfer of technical data to a foreign person, whether in the U.S. or abroad; or
- Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the U.S. or abroad.
Export can take the form of oral, written, electronic, or visual disclosure, shipment, transfer, or transmission. The term "export" can mean not only technology leaving the shores of the United States (including transfer to a U.S. citizen abroad) but also transmitting the technology to an individual other than a U.S. citizen or permanent resident within the United States. Thus, disclosure of research activities and results to a foreign researcher or student in a laboratory is considered a "deemed export" (see below).
A launch vehicle or payload shall not, by reason of the launching of such vehicle, be considered an export. However, for certain limited purposes (see Sec. 126.1 of this subchapter), the controls of this subchapter may apply to any sale, transfer or proposal to sell or transfer defense articles or defense services.
Temporary import means bringing into the U.S. from a foreign country any defense article that is to be returned to the country from which it was shipped or taken, or any defense article that is in transit to another foreign destination.
Fundamental Research and Public Domain
Fundamental research is basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community, as distinguished from research in which the results are restricted for proprietary reasons or specific U.S. Government access and dissemination controls. University research will not be considered fundamental research if:
- the University or its researchers accept restrictions on publication of scientific and technical information resulting from the project or activity, or
- the research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.
Public domain means information that is published and generally accessible or available to the public. For EAR, "published information" is information that has been, is about to be, or is ordinarily published. ITAR requires that the information has already been published. Information becomes "published" or considered as "ordinarily published" when it is generally accessible to the interested public through:
- Publication in periodicals, books, print, electronic, or any other media available for general distribution to any member of the public or to those who would be interested in the material in a scientific or engineering discipline.
- Libraries open to the public.
- Issued patents.
- Release at an open conference, meeting, seminar, trade show, or other open gathering. A conference is considered 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 (but not necessarily a recording) of the proceedings and presentations.
In all cases, access to the information must be free or available for a fee that does not exceed the cost to produce and distribute the material or hold the conference (including a reasonable profit).
License means a document bearing the word license issued by the Director, Office of Defense Trade Controls or his authorized designee which permits the export or temporary import of a specific defense article or defense service controlled under ITAR.
ITAR Restricted Countries
Sec. 126.1 specifies certain countries to which exports and sales are prohibited. Currently, It is the policy of the United States to deny licenses, other approvals, exports and imports of defense articles and defense services to:
- Afghanistan, Belarus, Cuba, Iran, Iraq, Libya, North Korea, Syria, and Vietnam.
- Countries with respect to which the United States maintains an arms embargo (e.g. Burma, China, Haiti, Liberia, Rwanda, Somalia, Sudan and Democratic Republic of the Congo (formerly Zaire))
- Exports and sales prohibited by United Nations Security Council embargoes (Angola)
- Exports to countries which the Secretary of State has determined to have repeatedly provided support for acts of international terrorism (Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria)
Please see the ITAR Embargo Reference Chart for specific references to Defense Trade Controls.
EAR Commerce Control List Overview and Country Chart
The Commerce Country Chart, located in Supplement No. 1 to Part 738, contains licensing requirements based on destination and Reason for Control. In combination with the CCL, the Commerce Country Chart allows you to determine whether a license is required for items on the CCL to any country in the world.
Imposition of Export Controls
The majority of university research efforts and possible exports do not fall under EAR and ITAR restrictions. Export control usually exists for one or more of the following reasons:
- The actual or potential military applications or economic protection issues associated with the nature of the export.
- Government concerns about the destination country, organization, or individual.
- Government concerns about the declared or suspected end use or the end user of the export.
Even if an item appears on a list of controlled technologies, an exclusion generally exists for fundamental research when there are no restrictions on publication of the research or other dissemination of the information or, in some cases, when the research or information is made public or is intended to be made public.
The fundamental research exemption does not extend to the for-profit sector, which might try to impose export controls on a university as a subcontractor because the prime contractor is required to accept the controls.
Institutional Compliance Program Components
Institutional Commitment and Policy
- Memorandum from Vice President for Research
Identification, Receipt and Tracking of ITAR Controlled Items/Technical Data
Training and Educational Programs
- February 2, 2005 Seminar
- May 4, 2004 Educational Program with Dan Jones
Background Information and Other Resources
- Society for International Affairs provides a forum for the exchange of information related to export and import licensing.
- Council on Governmental Relations
- Information and Case Studies (February 2004)(pdf)
- Massachusetts Institute of Technology: Export Controls
- University of Maryland: Export Control Guidance
- Trade Sanctions
- Inspector General Reports
- Department of Defense: Contractor, University, and Federally Funded Research and Development Center Facilities, March 25, 2004
- Department of Commerce: Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S., March 2004
- Department of Energy: Contractor Compliance with Deemed Export Controls, April 2004
5 Countries of the North Atlantic Treaty Organization (NATO) or countries which have been designated in accordance with section 517 of the Foreign Assistance Act of 1961 as a major non-NATO ally (and as defined further in Section 644(q) of that Act) for purposes of that Act and the Arms Export Control Act, or countries that are members of the European Space Agency or the European Union and involves exclusively nationals of such countries.