Updates & Current Issues
Commerce Update Deemed Exports May 22, 2006 Notice in Federal Register on Establishment of Advisory Committee (DEAC) DEAC topic was deemed exports (EAR) not other export control issues Committee comprised of academic, commercial and government representatives
Commerce Update DEAC Report & Recommendations Report released December 20, 2007 -Overall positive New approach of higher fences around narrower areas of technology Renders moot any current distinction between product of research and knowledge of equipment used din research and general use of equipment concerns
DEAC Report Recommends a new definition of fundamental research but if not adopted, supports current interpretations of ordinarily published Recommends a 7-step implementing construct for a new deemed export regime Some of these are of concern Implementation will be up to Commerce http://tac.bis.doc.gov/2007/deacreport.pdf pdf
Equipment Use Use of export controlled equipment is not a deemed export. Deemed export occurs only if controlled technology is transferred. It is understood by the Commerce Department that there is no distinction between product of research and knowledge of equipment used in research (DEAC Report reference.)
Equipment Use However There are no exclusions that allow foreign persons to use equipment controlled for use technology which requires the access to company/manufacturer proprietary manual or instructions for the use. Should be treated as using another parties export controlled material.
DOD Export Controls into DFARS Proposed DFARS clause for export-controlled information and technology overly restrictive for export controls large response to FR notice DOD response August 14, 2006 FR better, but still some issues Discussions with DOD continue
Then There is ITAR
What is subject to ITAR? Items on the Munitions i List defense articles Includes both research on defense articles and training or assistance in developing defense articles Technical hi ldt data related ltdto the manufacture or production of defense articles Anything with a substantial military application
Differences of ITAR from the EAR Public Domain Definition includes fundamental research Df Defense Services no exclusions Bona Fide Employee Exemption Problematic Clauses Foreign National Restrictions Restrictions ti on Publication Violations and Penalties (fines are stiffer) Technology Control lpl Plan (if registered)
ITAR Full-Time Employment Exemption Bona fide full time employee license exemption under ITAR (not EAR) applies to: Unclassified technical data provided to bona fide fulltime regular employees of U.S. institutions of higher learning with permanent abodes in the U.S. throughout their employment Must inform employee in writing not to transfer to other foreign nationals Does not apply to students with F-1 visas or others with visas allowing only part-time work Does not apply to nationals of ITAR prohibited or embargoed countries (22 C.F.R. 125.4(b)(10))
ITAR - Defense Service Defense Service means Furnishing assistance (including training) to foreign persons (located in or out of US) in the design, development, engineering, manufacture, production, assembly, testing, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles Furnishing to foreign persons of any technical data controlled under 120.1010 120.10 does NOT include commonly taught and Public Domain (which includes Fundamental Research)
ITAR License Determination If it is determined d that an export license is required, review license exceptions for eligibility If technology is identified on the USML and a foreign national from a controlled country will have access to that controlled technology, then an ITAR license is required for the deemed export - but there is a policy of denial
ITAR License Considerations If items or materials are on or covered by the ITAR U.S. Munitions List (USML), related technical data or defense services are controlled If there is a reason to know that items or materials will be used in or for weapons of mass destruction, even if they are not on or covered by the USML, these controls apply If items or materials or associated technical data are designed or modified for military use even if they are not on or covered by the USML, these controls apply.
ITAR License Process If an item or material is on the USML or otherwise subject to ITAR: An ITAR license will be required bf before any export or deemed export takes place A license will not be granted if the destination country or foreign recipient s nationality a prohibited country A license may be granted otherwise
General ITAR Prohibitions ITAR prohibits the transfer of controlled articles, technology or defense services Specifically designed or developed for controlled military applications i On the USML There is a presumption that licenses will be denied for exports to US Arms Embargoed Countries (including China), any UN Security Council Arms Embargoed Country (e.g. certain exports to Rwanda), and any US Sanctioned Country (OFAC list)
ITAR Prohibited Countries Belarus, Cuba, Iran, Libya, North Korea, Syria and Vietnam Arms Embargoes: Burma, China, Haiti, Liberia, Somalia, and Sudan Afghanistan, Rwanda, Republic of the Congo Policy to deny licenses
ITAR Arrangements that require State Dept authorization but not export licenses are: Technical Assistance Agreements (TAA) Manufacturing License Agreements (MLA) Distribution Agreements Distribution ib ti Arrangements Offshore Procurements
TAA An Agreement (e.g. contract) for the performance of a defense service (s) or the disclosure of technical data, as opposed to an agreement granting a right or license to manufacture defense articles. Assembly of defense articles is included under this section, provided production rights or manufacturing know-how are not conveyed. ITAR 120.22
ITAR Exceptions (22 CFR 123.26) Technical lassistance Agreements Fully executed agreements must be returned not later than 30 days after it enters into force If not fully executed within one year, extensions must be requested from DDTC DDTC must be informed of decisions not to conclude TAAs within 60 days of the date of decision DDTC must be informed in writing of an impending TAA termination not less than 30 days prior to the expiration date
ITAR Requirements continued ITAR requirements When a license is required, SED must be filed with District Director of Customs (DDC) at the port of exit along with the license who will forward to DDTC For shipments under ITAR exceptions except unclassified data, exporter must file an SED with District Director of Customs (DDC)/Postmaster along with certification of exemption from licensing requirements and then provide immediately to DDTC For unclassified data, SED is not required but letter of notice is (see 123.22(d))
What If?
Voluntary Self Disclosures If you realize a violation has occurred, the appropriate agency should be notified Penalty may be less severe What, When, Who, Where, and Why investigate, research, compile facts What was the general nature of the violation and what item was involved When did it occur timeframe Who was involved parties to the export Where did it occur U.S., overseas Why did it occur were policies adequate?
Voluntary Self Disclosures Need to show corrective action taken and the measures put in place to prevent it from happening again Root causes identified and addressed Remedial training provided Policies & procedures reviewed and addressed Provide all relevant documentation and submit disclosure
? Questions? Thank you for attending