Presented at the August 2007 meeting of the Allegheny Chapter of the Society of Research Administrators

1. Presented at the August 2007 meeting of
the Allegheny Chapter of the Society of
Research Administrators
Export Controls & the University
Presented by
Kathy Volz

2. What are Export Controls?
Shorthand for a collection of regulations
related to national security & foreign policy
• International Traffic in Arms
Regulations– ITAR
• Export Administration Regulations – EAR
• Office of Foreign Assets Control – OFAC

3. International Traffic in Arms
Regulations
• Department of State
• Military technology
• US Munitions List

4. Export Administration Regulations
• Department of Commerce
• Dual use technology
• Commerce Control List

5. Office of Foreign Assets Control
• US Department of the Treasury
• Economic and trade sanctions
• Foreign policy and national security
• Country Sanctions List
• Specially Designated Nationals List

6. OFAC
• No “work around”
• Sciences vs Humanities
• Location, location, location
• Export definition

7. Conferences
• 22 CFR 120.11: Through unlimited
distribution at a conference, meeting,
seminar, trade show or exhibition,
generally accessible to the public, in the
United States
• Outside the United States
• “Side bar” conversations

8. Relationships between Regulations
• ITAR and EAR relate to technology
• OFAC relates to diplomacy
ITAR EAR
OFAC

9. Export Controls Continuum
• Basic → Applied → Developmental
• Public Domain → Sensitive → Classified
• Commercial Use → Dual Use →Military Use
• Open Participation → Access Controlled
• Free to Publish → No Right to Publish
• University → Industry → Gov’t Facility
• US → NATO member → Embargoed country

10. National Security Environment
• Limiting access to technology &
information
• Restricting information flow
• Protecting national security and
maintaining foreign relations

11. University Research Environment
• Open access to labs & facilities
• Sharing and disseminating information
• Open forum for education and
communication

12. University Dilemma with Export Control
• Execute mission
• Protect national security
• Support foreign policy initiatives

13. Regulatory Dilemma with Universities
• Middle of the continuum
• Indistinguishable from small defense
contractors
• Organization and facilities are designed for
open access
• Don’t appear compliant

14. Critical Question
How does the University perform the
research it wants to in a way that fulfills its
mission and supports national security
initiatives and US foreign policy?

15. Choices for Engagement
• Accept only unrestricted work
• Accept export control restrictions
– Accept restriction wholesale
– Accept restrictions on a limited basis

16. Export Control Touch Points
• Nature of Research: Defense-related
• Source: Sponsors
• Rules of Engagement: Terms & Conditions
• Geography: Place of performance and/or
subject country

17. Nature: Defense-related Research
• Procurement – for governmental use
• Assistance – advancing the state of the
practice

18. Nature: Penn State Defense Research
Fiscal Year 04/05
• Defense Related Research Units had
$142M in research expenditures
• Penn State received $145M in Department
of Defense research funding
• Penn State received $13M in Department
of Energy research funding

19. Source: Federal & Defense Sponsors
• Clear models for procurement &
assistance
• Public mandate
• Conservative

20. Source: Industry Sponsors
• Federal and B2B procurement
• No model for assistance
• For-profit business model
• No exemptions available
• Intermediary layer between University &
Federal sponsor
• Work-for-hire model

21. Rules of Engagement:
Terms & Conditions
• Terms & conditions can invoke export
controls where they otherwise wouldn’t
apply
• Touch points
– Proposal stage
– Award stage

22. Fundamental Research Exemption
If a project qualifies as fundamental
research:
• Exempt from ITAR & EAR export controls
• Anyone can work on the project
• Free to publish

23. Fundamental Research
22 CFR 120.11(8)
Fundamental research is defined to mean
basic and applied research in science and
engineering where the resulting
information is ordinarily published and
shared broadly within the scientific
community….

24. How Exemption is Lost
Terms & conditions include:
• Access restriction – a restriction of who
can work on the project
• Dissemination restriction – a publication
restriction.

25. How Exemption is Lost
• Mandate – research must be export
controlled because of the nature of the
work (relates to military/national security)
• Forfeit – accept terms and conditions that
are not necessary for national security
reasons

26. Mandated Loss of Exemption
Research for military use/application
• DFAR 252.204-7000
• Other agreement language from the
Government

27. Voluntary Loss of Exemption
Publication or access restriction on work
unrelated to national defense
• Prior approval of publication
• Prior approval of foreign national
participation
• Industry and the work-for-hire model

28. Handling Terms & Conditions
Do what is appropriate to the situation
• Accept
• Negotiate
• Remember that OFAC is always there and
not subject to negotiation

29. Consequences of Acceptance
• Must conduct a review to determine if the
project is subject to ITAR and/or EAR
• May not be able to use foreign nationals
on project
• May have to implement a security plan

30. Negotiation Strategies
Negotiate from a position of strength
• Acknowledge importance of export
controls
• Investigate nature of research
• Investigate applicability of regulations
• Understand who you’re negotiating with

31. Who are you negotiating with?
• Faculty
Contract Technical
• Industry
Agency
• Agency
Industry
University

32. Who says it’s not fundamental?
22 CFR 120.11(8)
University research will not be considered
fundamental research if:
(i) The University or its researchers accept other
restrictions on publication of scientific and
technical information resulting from the project
or activity, or
(ii) The research is funded by the U.S.
Government and specific access and
dissemination controls protecting information
resulting from the research are applicable.

33. It’s not a real publication restriction.
• Publication not allowed
• Approval required before publication
• Delay for review and comment ≠ restriction
• “Review and comment” ≠ restriction
• Intent is immaterial

34. I’m not exporting anything.
“Export” is a term of art that includes:
• Actual shipment of goods
• Electronic transmission of information
• Verbal communication with a foreign
national
• Visual “inspection” by a foreign national
• Use of controlled technology abroad

35. Examples of Exports
• Talking about a project with a
foreign national
• Giving a foreign national a tour of
your facility
• Having an e-mail exchange with a
foreign national
• Taking a controlled technology abroad –
like a laptop computer or GPS system

36. Negotiating with Industry
• You haven’t started yet?
• So?
• Really!
• Okay….
• Oh well.

37. Negotiating with Agencies
• Not on my watch
• University risk profile
• Continuum
• Distinguish
• Carve out portion of scope

38. Impacts of Export Controls
• University mission
• Promotion & tenure
• Graduate student participation
• Foreign nationals
• Annual Compliance Certification to OVPR
• Award processing
• Sanctions

39. Graduate Student Participation
• About 60% of Penn State’s engineering &
science graduate students are foreign
nationals
• International student enrollment in US
schools up for first time since 2001

40. Graduate Student Participation
• Publication of graduate thesis is a
degree requirement
• Thesis defense must be open to the public

41. Graduate Student Participation
• Embargoed countries – Currently includes
Cuba, Iran, North Korea, Sudan, and Syria
• ITAR – Chinese students can not
participate
• EAR – Participation depends on specific
technology & country
• At best, licenses are expensive &
postpone project start

42. The Name Game
Elliott Yamin Amy Winehouse
Jeremy Hernandez Satveer Chaudhary
Melky Cabrera Wilson Betenit
Gordon Brown Stephen Harper
Keith Ellison Chaka Fattah
Koji Steven Sakai Alberto Gonzales
Xiaodong Sheldon Meng

43. “War” Stories
• Department of Homeland Security
• Understanding the SOW
• FDP and export controls
• Visiting scientists
• Industry sponsors – negotiation with and
through
• Extra-contractual assurances

44. Contact Information
Kathy Volz
Negotiator
The Pennsylvania State University
Office of Sponsored Programs
110 Technology Center Building
University Park, PA 16802
814-865-6875
kjv10@psu.edu