Yale University, Office of the Vice President and General Counsel.  
 
 

Export Controls

General and New Developments. The federal government has controlled United States exports of certain goods and technology for national security reasons since the 1940s. Today, the Departments of Commerce, State, and Treasury each play a role in enforcing regulations that apply not just to exports of goods overseas, but also to “deemed exports,” which are disclosures of controlled technology and data to foreign nationals in the United States. These deemed export provisions are of especial interest to universities because they conduct research and teach courses that may involve controlled technology and they enroll and employ many foreign nationals.

Most university activities have been exempt from export control regulations because the information involved is publicly available or in the public domain, is considered fundamental research, or is taught as part of a listed catalogue course at the institution. These conditions generally correspond to blanket regulatory exemptions.

In the spring of 2004, reports by the Inspectors General of the Departments of Commerce and Defense, as well as an interagency IG report,1 recommended changes in policy and regulation of deemed exports that could have a serious and potentially harmful impact on the ability of universities to conduct research.

Most significantly, the reports suggested that information conveyed to a foreign national in the U.S. during the course of fundamental research relating to the use of controlled equipment is distinct from the research and may require a license. This is commonly referred to as “the ‘use’ technology issue.” The Department of Commerce’s Export Administration Regulations control, among other things, technology, which under the regulations includes information relating to “use” of equipment. When a foreign national in the U.S. conducts fundamental research and needs to operate or repair a piece of equipment that is subject to the EAR (see below), some “use technology” may be communicated to that individual. In the past, universities have considered the communication of such information to be included within the fundamental research and therefore exempt from the export regulations. The Commerce IG contends that a transfer of ‘use’ technology is separate and may require a license.

As of the summer of 2005, the Department of Commerce is considering whether to adopt the IG recommendations, and is receiving public comment on the issue.

Researchers should be aware of the regulations and consider whether their research or travel abroad may implicate export control regulations. The lists of controlled equipment, software, and technology are updated regularly and are not easy to use. If you have specific export control questions or believe you have identified a situation requiring further review, or you believe an export license may be required, please contact either your Grant and Contract Office or the OGC.

Regulations. There are three primary sets of federal regulations that govern export controls:

  • The Export Administration Regulations (EAR), administered by the Commerce Department, apply to the export of “dual-use” items and their technology (i.e., items that have both commercial and military applications, such as computers or pathogens).
  • The International Traffic in Arms Regulations (ITAR), administered by the State Department, apply to munitions, or defense articles and defense services (i.e., those articles and services that are specifically designed for military applications or defense and do not have predominant civil applications).
  • The Office of Foreign Assets Control (OFAC), overseen by the Treasury Department, governs trade sanctions, embargoes, and travel restrictions.2

These regulations apply to exports in virtually all fields of science, technology and engineering. Generally, an “export” includes any: (1) actual shipment, or electronic or digital transmission, of covered items or technology; (2) release or disclosure, including verbally, of covered technology, software or equipment to a foreign national anywhere; or (3) use or application of covered technology for the benefit of a foreign entity or person anywhere.

Since 1994, “export” means not only the shipment of items or transmission of technology outside the United States, but also transmissions to a non-U.S. citizen, non-permanent resident within the United States (called a “deemed export”). Thus, a disclosure to a foreign researcher or student on the Yale campus is a “deemed export.”

Unless an exemption applies, EAR and ITAR may require that a license be obtained before covered equipment, materials, technology, software or information can be exported out of the U.S. or within it as a deemed export. The vast majority of exports associated with academic research – including deemed exports – do not require government export licenses because an exemption applies. In other situations, however, a license may be required. In a few situations, a license may be denied.

Exemptions. Most research at Yale and other universities is exempt from EAR and ITAR under one of three key exclusions:

  1. the research involves “fundamental research” (so long as there are no restrictions on publication of the research or other restrictions on the dissemination of the information);
  2. the research involves information that is “publicly available” (EAR) or that is in the “public domain” (ITAR);4 or
  3. the research involves “educational information” (i.e., information released by instruction in catalog courses and associated teaching laboratories at academic institutions in the United States, other than for certain encrypted software).

Yale has long believed that all of its research has qualified for one of the exemptions.

The EAR and ITAR define “fundamental research” as basic and applied research in science and engineering conducted at a university located in the U.S. where the resulting information is ordinarily published and shared broadly within the scientific community (excluding certain encryption software). Thus, the fundamental research exemption applies to research conducted by foreign nationals at United States campuses, but does not apply to research conducted abroad. Research will not qualify as fundamental, and a license may be required if:

  • specific access or dissemination controls on the resulting information have been accepted by the university or the researcher; or
  • the university or researcher accepts “pass through” export control requirements from a sponsor or restrictions on publication of the information resulting from the research, other than (i) prepublication review designed solely to ensure that publication would not inadvertently divulge proprietary information (EAR) or (ii) prepublication review designed solely to ensure that publication would not compromise patent rights (EAR).

In some cases, a U.S. government grant may impose specific national security controls. Such research still qualifies as fundamental research under EAR (not ITAR), if, and only if, the university strictly complies with the controls (which may, as a practical matter be impossible, or inconsistent with University policy). In addition, an initial transfer of information from an industry sponsor to university researchers may be subject to export controls even if the university research using it qualifies for the fundamental research exemption if the initial transfer is accomplished under a confidentiality agreement.

Information that is published and is therefore not subject to the EAR and ITAR may be exported freely, even to countries that are the subject of embargoes under OFAC (but OFAC travel restrictions may apply). However, there are separate restrictions on the provision of services to countries that are embargoed under OFAC and for the provision of services related to defense articles and technology under ITAR.

Licenses. If the exemptions for publicly available/public domain information and fundamental research do not apply, and information or equipment is to be exported to foreign nationals in the U.S. or transferred abroad, then EAR or ITAR may apply, and a license may be required.

An EAR license may be required if:

  • an item on the EAR Commerce Control List (CCL), or information concerning a listed item, is to be exported; or
  • the information or equipment is subject to EAR but not on the CCL and:
    • the destination is a country with restricted entities on the EAR Entity List (currently, certain entities in China, India, Israel, Pakistan, or Russia);
    • the end user is on the Denied Persons or Specially Designated Nationals Lists;
    • the destination is an OFAC-embargoed country (currently Cuba, Iran, Liberia, Libya, North Korea, Burma (Myanmar), Sudan, Syria, or Zimbabwe, and under some circumstances, Iraq);5
    • the destination is another U.S.-embargoed country (i.e., Rwanda); or
    • the export will support a nuclear, missile, chemical or biological weapons program.

If the destination is an OFAC-embargoed country, an OFAC license also may be required.

An ITAR license generally will be required if: (1) an item on the U.S. Munitions List, or information concerning a listed item, is to be exported; (2) services associated with defense articles and related technical data, even if all of the information is in the public domain, are provided to foreign persons in the design, development, operation, etc. of defense articles (including civilian space/satellite items); (3) there is reason to know that the equipment or information to be exported will be used in weapons of mass destruction; or (4) the equipment or information was designed or modified for military use.6

Penalties for failing to comply with export control regulations can be steep. Criminal violations of EAR carry potential penalties of the greater of $50,000-$1,000,000 or five times the value of the export, and up to 10 years of imprisonment; civil penalties include fines of $10,000-$120,000. Criminal violations of ITAR can entail fines of up to $1,000,000 and up to 10 years’ imprisonment; civil penalties include fines of up to $500,000. Criminal violations of OFAC regulations are also severe.

1 The Offices of the Inspector General of the Departments of Commerce, Defense, Energy, Homeland Security, State, and the Central Intelligence Agency contributed to the interagency report.

2 Other regulations apply to highly specialized exports, such as the Energy Department and Nuclear Regulatory Commission regulations on export of nuclear technology, Food and Drug Administration or Environmental Protection Agency export regulations, etc.

3 Commerce and State each publish a list of covered items and technology: the Commerce Control List (CCL) describes items and technology covered by the EAR and the U.S. Munitions List describes defense articles, services, and related technical data covered by ITAR. These lists are lengthy, highly technical, and updated regularly. In addition, some activities and items may be subject to EAR but not on the CCL (for example, all exports to countries subject to a comprehensive embargo – Cuba or Iran – are subject to the EAR, even if the items are not listed on the CCL).

4 The EAR and ITAR define “publicly available” or “public domain” information differently. For the EAR, the requirement is that the information has been, is about to be, or is ordinarily published. Under ITAR the information must have been published. Information becomes “published” or considered as “ordinarily published” when it is generally accessible to the interested public through a variety of ways, including publication in periodicals, books, print, electronic or other media available for general distribution to any member of the public. The EAR definition of publicly available includes releases at open conferences, meetings, or seminars in the U.S. or abroad, while ITAR’s definition of “in the public domain” restricts the exemption to releases at U.S. conferences. Certain encryption software is not considered publicly available under EAR.

5 Separate restrictions apply to formerly embargoed destinations.

6 It is generally not possible to get a license if the destination is one of the following countries (or the recipient is a national of one of them): Afghanistan, Belarus, Burma, China, Cuba, Haiti, Iran, Iraq, Liberia, Libya, North Korea, Rwanda, Somalia, Sudan, Syria, Vietnam, or Zaire (Democratic Republic of the Congo). (Note that licenses are sometimes available on a case-by-case basis for support of the operations of the U.S. or its allies in countries such as Afghanistan, Iraq and Zaire (Democratic Republic of the Congo).) If the destination is any other country, whether a license is granted is determined on a case-by-case basis.

  
 
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