Research

Export Controls Laws and Regulations

Overview

Researchers at Michigan Technological University are involved in research both in the United States and overseas. These activities include the sharing and development of products, goods, hardware, software, or materials, as well as research involving technology that may be subject to U.S. export control laws and regulations. It is the University’s policy to comply with all applicable laws and regulations. This statement summarizes key provisions of export control laws and regulations and discusses how the University will assist researchers in complying with these complicated requirements.

Export control regulations are federal laws that govern how technology, technical data, technical assistance, and items or materials are physically or electronically exported, shipped, transmitted, transferred, or shared from the U.S. to foreign countries, persons or entities. The regulations prohibit the unlicensed export of certain commodities or information for reasons of national security or protections of trade. Export controls usually arise for one or more of the following reasons:

  • The nature of the export has actual or potential military applications or economic protection issues
  • Government concerns about the destination country, organization, or individual, and
  • Government concerns about the declared or suspected end use or the end user of the export

These laws protect national security and U.S. foreign policy interests, prevent terrorism and the proliferation of weapons of mass destruction, and preserve U.S. economic competitiveness.

These regulations apply to research and other activities regardless of the source of funding. The US government considers this issue very serious and has created regulations across a broad spectrum. The exchange of technology, services and scientific information is viewed as having significant potential to disrupt US foreign policy and national security.

At Michigan Tech, the Technology Control Plan (TCP) is used to control the dissemination of Export Controlled (EC) information and other Controlled Unclassified Information (CUI) that may be utilized during the performance of Michigan Tech projects. 

Federal Agencies

Michigan Technological University adheres to the multiple federal agencies’ export control regulations. The three main regulations are:

ITAR Department Seal

The Department of State’s International Traffic in Arms Regulations (ITAR) implements the Arms Export Control Act (AECA).

EAR Department Seal

The Department of Commerce’s Export Administration Regulations (EAR) are a set of regulations found at 15 C.F.R. § 730 et seq. They are administered by the Bureau of Industry and Security , which is part of the US Commerce Department.

OFAC Department Seal

The Treasury Department’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions that have been imposed against specific countries based on reasons of foreign policy, national security, or international agreements.

ITAR/EAR Overview

Federal regulations promulgated and enforced by the Department of State, and the International Traffic in Arms Regulations (ITAR), the Department of Commerce, Export Administration Regulations (EAR) prohibit the unlicensed export of specific technologies for reasons of national security or protection of trade. If University research involves such specified technologies, the ITAR and/or EAR may require the University to obtain prior approval from State or Commerce before allowing foreign nationals to participate in the research, partnering with a foreign company and/or sharing research – verbally or in writing – with persons who are not U.S. citizens or permanent residents. The consequences of violating these regulations can be quite severe, ranging from loss of research contracts to monetary penalties to jail time for the individual violating these regulations.

The Sponsored Programs Office (SPO) and Principal Investigator (PI) conduct a thorough review of research projects and contract provisions to determine whether and, if so how, a particular research project is impacted by those regulations. Principal Investigators have the following responsibilities:

  • Prior to commencing any research, to review and cooperate with SPO to determine whether their research is impacted by the controls or requirements contained within export regulations
  • To re-evaluate that determination before changing the scope or adding new staff to the project to determine if such changes alter the initial determination
  • To make export determinations far enough in advance to obtain an authorization, should one be required

The University will assist PI’s in assessing the application of such regulations, but primary compliance responsibility rests with the principal investigator of the research.

Lists of Items Controlled

The Department of State’s International Traffic in Arms Regulations (ITAR) contains the United States Munitions List (USML).

The Department of Commerce’s Export Administration Regulations (EAR) contains the Commerce Control List (CCL).

Export Means

  1. Sending or taking a defense article out of the U.S. in any manner, except by mere travel outside of the U.S. by a person whose personal knowledge includes technical data
  2. Transfer of registration, control or ownership to a foreign person of any aircraft, vessel or satellite, whether in the U.S. or abroad
  3. Disclosure (including oral or visual) 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)
  4. Disclosure (including oral or visual) or transfer of technical data to a foreign person, whether in the U.S. or abroad
  5. Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the U.S. or abroad

An 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” (release to that person’s country of origin).

Fundamental Research and Public Domain

Much of the technology that is accessed on campus at Michigan Tech will not require licensing because of the exceptions contained in the regulations for “fundamental research” or “educational exception”. If the on-campus teaching of basic and applied research is free from restrictions on publication and involved information that is not subject to any access or dissemination controls, it generally qualifies for the “fundamental research” exemption. 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.

Similarly, there is an exception for educational information that is released through instruction in catalog courses and associated teaching laboratories of U.S. Academic institutions. To be eligible for the fundamental research and educational information exemption, the research must take place at an accredited institution within the United States.

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

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 article or defense service controlled under the ITAR.

Restricted Countries, Entities and Persons

The U.S. Department of Treasury, through its Office of Foreign Assets Control (OFAC), enforces U.S. embargo and sanction programs that may restrict transactions with certain foreign countries irrespective of whether the exported technology is controlled under the ITAR or the EAR.

The OFAC full list of current sanctions can be found on the OFAC website. Depending on the country’s embargo or sanctions program, certain activities may be prohibited without a government license. The Department of State also maintains country level sanctions.

In addition, OFAC, along with the Department of Commerce and Department of State maintain lists of entities (including universities and institutes) and persons with whom interactions are prohibited. These lists include the OFAC Specially Designated Nationals and Blocked Person list, the Commerce Department’s Entity List and Denied Persons List, and the Directorate of Defense Trade Controls Debarred Parties list.

To prevent transactions with restricted entities or persons, shipping destinations, travel destinations, visitors, and international collaborators should be screened against the restricted parties lists discussed above (Restricted Party Screening).

Imposition of Export Controls

The majority of university research efforts and possible exports do not fall under the EAR and ITAR restrictions. Export control usually exists for one or more of the following reasons:

  • The items, materials, technology or technical data used in the research are identified on U.S. export control lists
  • Working with (formally or informally), or providing technical assistance to, foreign nationals from countries currently sanctioned (e.g., for trade, travel or terrorism) by the U.S.
  • A research agreement (e.g., contract, award, non-disclosure agreement) limits publication of results or participation in the design, conduct, or reporting of the research based on citizenship
  • Government concerns about the designation country, organization or individual
  • Government concerns about the declared or suspected end use or end user of the export

Even if an item appears on a list of controlled technologies, an exclusion may exist 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.

Implications for Researchers and Research-related Activities

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 Technological 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.

If U.S. export control is violated, both the university and the individuals involved in the violation may be liable. Penalties for violating the export control regulations can be severe and may include the following administrative, civil and criminal penalties:

Penalties for Violations
Penalties ITAR EAR OFAC
Individual Criminal Penalties Up to $1 million fine and/or 20 years in prison per violation Up to $1 million fine and/or 10 years in prison per violation Up to $250,000 fine and/or 20 years in prison per violation
Corporate Criminal Penalties Up to $1 million fine per violation Up to $1 million per violation Up to $1 million per violation
Civil Penalties Up to $1,163,217 per violation Up to $302,584 per transaction or twice the value of the transaction; whichever is greater Up to $1,503,470 per violation
Collateral Concerns Legal/investigation costs, reputational harm Legal/investigation costs, reputational harm Legal/investigation costs, reputational harm
Administration Penalties Denial of export privileges, debarment from government contracting and/or imposition of independent monitors and asset blocking as well as other collateral penalties Denial of export privileges, debarment from government contracting and/or imposition of independent monitors and asset blocking as well as other collateral penalties Denial of export privileges, debarment from government contracting and/or imposition of independent monitors and asset blocking as well as other collateral penalties

In general, the administrative monetary penalty maximum is adjusted for inflation annually.

One mistake can comprise several violations. If sanctions are imposed, the Department of State issues a press release announcing the violation on their website. Penalties may be mitigated if voluntarily reported to the appropriate government agency as a Voluntary Self-Disclosure (VSD).

Other Export Control Concerns

Besides research with military or dual-use items and technical information, export control regulations may impact research activities, including:

  • Overseas shipping
  • Information Technology
  • International Travel
  • Laptops and software
  • Attending restricted conferences
  • Hiring workers
  • Disposal of controlled items and information
  • Visiting Foreign Scholars

Please contact the appropriate University department for questions related to any of the above activities.

Export Control at Michigan Tech University

It is Michigan Tech’s policy that all personnel, including employees, visiting scientists, postdoctoral fellows, students, and other persons retained by or working at or for Michigan Tech conduct their affairs in accordance with U.S. laws and regulations, including compliance with U.S. export control laws and regulations applicable to its operations. The laws and regulations governing exports are detailed and complex. Employees with responsibility for Michigan Tech’s export control compliance program or whose duties include a contract/project with foreign national restrictions will be trained on the U.S. export control laws and regulations and their applicability to their jobs. It is particularly important in an institution like Michigan Tech that frequently works in tandem with researchers and collaborators from abroad to determine early in the process of any international collaboration, the potential requirement for export control authorization. All Michigan Tech faculty, staff, and students must follow U.S. export control laws and regulations. The policies and procedures include a number of screening steps required prior to exporting. In addition, the policies and procedures identify people to contact to answer questions about whether specific research activities raise any export issues.