Wayne L Mowery Jr Esq ECoP Director of Compliance University Export Compliance Officer Empowered Official Office of Ethics and Compliance Office of Sponsored Programs The Pennsylvania State University ID: 614253
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Slide1
EXPORT COMPLIANCE “Just the Basics”
Wayne L. Mowery, Jr., Esq.,
ECoP
®
Director of Compliance
University Export Compliance
Officer
Empowered Official
Office of Ethics and Compliance
Office of Sponsored Programs
The Pennsylvania State University
200 Innovation Blvd, Suite 115
Phone: 814.867.2379
Fax: 814.865.3377
Email:
wlmowery@psu.edu
http
://export.psu.eduSlide2
So what exactly are Export Controls?
Export
: An actual shipment or transmission of items, services, or technical data out of the United States, or the release of technology, software, or technical data to a foreign national in the United States. Technology, software, or technical data is “released” for export through:
Visual inspection by a foreign national of U.S. origin equipment and facilities;Oral exchanges of information in the United States or abroad;Transfer or shipment via any means (physical or electronic) to a foreign entity;Provision of a service, or the application to situations abroad of personal knowledge or technical experience acquired in the United States.
2
Controls
: A systems of laws, regulations and guidelines established by an empowered body to restrict otherwise unregulated activities in a manner designed to either facilitate certain socially desirable goals or to deter certain socially undesirable consequencesSlide3
So who exactly are foreign persons/nationals
Foreign Person/Foreign National
: A term of exclusion – Anyone who is not…
A U.S. Citizen;Natural, or NaturalizedA permanent resident alien (Green Card)
Political Refuge or Asylee
Foreign Person/Foreign National also includes foreign governments, foreign government agents, and foreign corporations or entities (i.e. a business not organized or incorporated under U.S. law).
3Slide4
SO WHAT?
Foreign Persons/Nationals:
Students
EmployeesVisiting ScientistsCollaboratorsEnd-usersSponsorsSuppliersViolations are subject to significant penaltiesSlide5
We are not in a position to operate as a research university without the heavy involvement of foreign scholars.
5
budget.psu.edu/
factbook
/StudentDynamic/MinorityEnrolbyEthnicity.aspx?YearCode
=2014&FBPlusIndc=N (Fall 2015)Slide6
And these numbers are increasing as international student enrollments increase nationwide!
6
http://www.iie.org/Research-and-Publications/Open-Doors/Data#.WBdmXfkrKCg
For the
2014/2015 Academic Year – International Student registrations increased 9
.1%
to
974,926 students nationwide.
Chinese student registrations increased by 10.8% overall to a total of nearly 304,040 students (31.2% of the total international student population).
Indian student registrations numbered nearly 132,888, a 29.4% increase (13.6% of total).
South Korean student registrations numbered nearly 63,710 (6.5% of total).
Combined China, India and South Korean students represent 51.3% of the total population of international students in the U.S. All combined more than 60% of the foreign students in the U.S. are from the SE Asia Region.
To put this is perspective, there are >3x more foreign students in the U.S. than U.S. students abroad (U.S. Foreign Study Students – 304,467)!Slide7
Export Compliance Impacts at Penn State….
Sponsored Research
International Travel
Visiting ScientistsForeign VisitorsShipping (EHS)PurchasingMOOCs
Distance LearningHuman Resources
IT & Computer Security
Int’l Collaborations
Inventory Management
Physical Plant Issues
Educational Components of an ECMP
Global Programs
Institutional Oversight
Export
Control ReformsSlide8
The RegulationsSlide9
U.S. Agency
Regulates
Regulation
Type
of Controls
State
Military Critical Technologies
ITAR (International Traffic
in Arms Regulations)
Conten
t Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
Content Based
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix
Based
Content, Destination, End-User
U.S Government Primary Export Control Regulations
9Slide10
Export Control Regulations – An Example….
1.)
The following commodities are under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121) when "space qualified" and operating at frequencies higher than 31.8 GHz: helix tubes (traveling wave tubes (TWT)) defined in 3A001.b.1.a.4.c; microwave solid state amplifiers defined in 3A001.b.4.b traveling wave tube amplifiers (TWTA) defined in 3A001.b.8; and derivatives thereof; 2.) "Space qualified" and radiation hardened photovoltaic arrays, as defined in 3A001.e.1.c, having silicon cells or having single, dual or triple junction solar cells that have gallium arsenide as one of the junctions, are subject to the export licensing authority of the Department of Commerce. All other "space qualified" and radiation hardened photovoltaic arrays defined in 3A001.e.1.c and spacecraft/satellite concentrators and batteries are under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121). See also 3A101, 3A201, and 3A991. Related Definitions: For the purposes of integrated circuits in 3A001.a.1, 5 x 103
Gy(Si) = 5 x 105 Rads
(Si); 5 x 106 Gy (Si)/s = 5 x 108
Rads
(Si)/s. For purposes of photovoltaic arrays in 3A001.e.1.c, an array predominately consists of: a substrate; solar cells having silicon cells or having single, dual, and or triple junction solar cells that have gallium arsenide as one of the junctions;
coverglass
; ultra-violet coating(s); and bonding agent(s). Spacecraft/satellite: solar concentrators, power conditioners and or controllers, bearing and power transfer assembly, and or deployment hardware/systems are controlled under the export licensing authority of the Department of State, Directorate of Defense Trade Controls (22 CFR part 121).Slide11
U.S. Agency
Regulates
Regulation
Type
of Controls
State
Military Critical Technologies
ITAR (International Traffic
in Arms Regulations)
Conten
t Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
Content Based
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix
Based
Content, Destination, End-User
U.S Government Primary Export Control Regulations
11Slide12
International Traffic in Arms (ITAR)
Administered by the Department of State
Arms Export Control Act
Agency – Directorate of Defense Trade Controls (DDTC)Department of Defense InvolvementGoverns primarily military critical technologyControlled items specified on the U.S. Munitions List (USML)HardwareSoftwareTechnical DataDefense ServicesControlled items restricted for all foreign personsSlide13
ITAR (22 CFR §120 et
seq
)
ITAR Covers (on the US Munitions List (USML))Items with a predominately military/defense applicationsItems of commercial use that have been adapted or modified expressly for military purposesItems of commercial usage that contain ITAR technology – the ITAR see through ruleTechnical data related to ITAR itemsDefense Services Slide14
ITAR (22 CFR §120 et
seq
)
The 21 USML Official Categories:
Firearms
Guns/Armament
Ammunition
Launch Vehicles (Missiles)
Explosives & Energetic Materials
Surface Vessels of War (Navy)
Ground Vehicles
Aircraft
Military Training Equipment
Protective Personnel Equipment
Military Electronics
Fire Control – Range Finders
Materials and Misc. Articles
Toxicological Agents
Spacecraft Systems
Nuclear Weapons
Classified Articles
Directed Energy Weapons
[Reserved] Gas Turbine Engines
Submersible Vessels
Miscellaneous ArticlesSlide15
ITAR (22 CFR §120 et
seq
)
Technical Data:information “required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles Classified or invention secret informationSoftware directly related to defense articlesTechnical Data does not include: Information in the public domainGeneral math, science and engineering principlesSlide16
ITAR (22 CFR §120 et
seq
)
Defense Service:“[F]urnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles.Export status of the “know-how” irrelevantSlide17
ITAR (22 CFR §120 et
seq
)
Level of Control under ITAR is largely uniformVery few exemptions or exceptionsVery limited differences in treatment based on destination – generally, ITAR controlled items require licenses to MOST countriesPolicy of denial/embargoes for certain countries – ITAR §126.1 Prohibited CountriesSlide18
U.S. Agency
Regulates
Regulation
Type
of Controls
State
Military Critical Technologies
ITAR (International Traffic
in Arms Regulations)
Conten
t Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
Content Based
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix
Based
Content, Destination, End-User
U.S Government Primary Export Control Regulations
18Slide19
Export Administration Regulations (EAR)
Administered by the Department of Commerce
Export Administration Act
Agency – Bureau of Industry and Security (BIS)Governs “dual use” technologiesControlled items are specified on the Commerce Control List (CCL)HardwareSoftwareTechnical DataRestrictions vary based on item and destination countrySlide20
Export Administration Regulations (EAR)
EAR Covers:
All items in the U.S.;
All U.S. origins items in the U.S. and abroad; and,All foreign origin items incorporating more than a specified amount of EAR controlled technologyItems of specific coverage under the EAR are listed on the CCL in enumerated paragraphs called ECCN (Export Control Classification Numbers)Slide21
Export Administration Regulations (EAR)
How to read an ECCN (
eg
. 3A992):1. The initial alpha-numeric in an ECCN stands for the general category on CCL into which the item falls.
0 – Nuclear & Miscellaneous
1 – Materials, Chemicals,
Microorganisms & Toxins
2 – Materials Processing
3 – Electronics
4 – Computers
5a – Telecommunications
5b – Information Security
6 – Sensors and Lasers
7 – Navigation and Avionics
8 – Marine
9 – Aerospace and Propulsion Slide22
Export Administration Regulations (EAR)
How to read an ECCN (
eg
. 3A992):2. The second alpha-numeric in an ECCN stands for product group within the broader category into which the item falls.
A – Systems, Equipment and Components
B – Test, Inspection and Production Equipment
C – Material
D – Software
E - TechnologySlide23
Export Administration Regulations (EAR)
How to read an ECCN (
eg
. 3A992):3. The remaining alpha-numeric grouping in an ECCN stands for itemized listing location within the product group.Items not listed in an ECCN are designated EAR99.Slide24
Export Administration Regulations (EAR)Slide25
Export Administration Regulations (EAR)
Once you have your ECCN, you can determine:
Reason for control (AT, NS, NO, etc.);
Country specific controls; and,Available exemptions and exceptionsLVS – Low Value ShipmentsCivilian End-UsesShipments to Country Group B CountriesSlide26
Export Administration Regulations (EAR)Slide27
Export Administration Regulations (EAR)
Unlike the ITAR, the level
of
control under EAR is variable based on item designation, item specifications, intended use and/or intended recipient:Numerous exemptions or exceptions may applyLevel of control is based on the facts at hand (who, what, where and, sometimes, why)Exemptions or exceptions will largely not apply to embargoed countries.Slide28
U.S. Agency
Regulates
Regulation
Type
of Controls
State
Military Critical Technologies
ITAR (International Traffic
in Arms Regulations)
Conten
t Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
Content Based
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix
Based
Content, Destination, End-User
U.S Government Primary Export Control Regulations
28Slide29
Office of Foreign Asset Controls(OFAC)
Administered by the Department of Treasury
Various laws apply (e.g. Trading with the Enemy Act)
Agency – Office of Foreign Asset Controls (OFAC)Governs restrictions on transactions/interactions with embargoed nations and restricted partiesCountry-based embargoes (e.g. Cuba or Iran)Activity based embargoes or restrictions (e.g. Terrorism or Narcotics related controls)Each embargo or control regime is specific to that country or groupingSlide30
Office of Foreign Asset Controls(OFAC)
Requires prior screening for potential limitations on economic relationships with individuals and/or companies
Restriction lists are multi-faceted, may control:
Financial transactions;TravelExport/import of goods/serviceListings may be managed or controlled by other government entitiesPenn State has purchased a site-license for commercial screening softwareSlide31
Office of Foreign Asset Controls(OFAC)
Certain embargoes have General Licenses to permit activities deemed appropriate without review. Such activities typically relate to humanitarian efforts, such as medical assistance and educational/academic activities.
Other activities with a restricted person/embargoed country may require obtaining a Specific License from OFAC
OFAC license process is less regimented and detailed than under either the ITAR or the EARSlide32
U.S. Agency
Regulates
Regulation
Type
of Controls
State
Military Critical Technologies
ITAR (International Traffic
in Arms Regulations)
Conten
t Based
NARROW
(U.S. Munitions List)
Commerce
Dual Use Technologies
EAR
(Export Administration Regulations)
Content Based
BROAD
(Commerce Control List)
Treasury
Sanctioned
Countries & Individuals
OFAC
(Office of Foreign Asset Controls)
Mix
Based
Content, Destination, End-User
U.S Government Primary Export Control Regulations
32Slide33
How to Find Out More
Training:
Citi Program - online training modules
EAR Training – online BIS training videos and materials covering basic EAR issuesCensus Training – online training on basic export/import compliance from Census BureauRegulations:ITAR – DDTC WebsiteEAR – BIS WebsiteOFAC – OFAC WebsiteSlide34
How to Find Out More
Internal Resources:
Penn State Export Compliance Website
Office of Sponsored Programs WebsiteEmail helpdesk – export@psu.eduSlide35
Export Compliance Impacts at Penn State….
Sponsored Research
International Travel
Visiting ScientistsForeign VisitorsShipping (EHS)PurchasingMOOCs
Distance LearningHuman Resources
IT & Computer Security
Int’l Collaborations
Inventory Management
Physical Plant Issues
Educational Components of an ECMP
Global Programs
Institutional Oversight
Export
Control ReformsSlide36
EXPORT COMPLIANCE “Just the Basics”
Wayne L. Mowery, Jr., Esq.,
ECoP
®Director of ComplianceUniversity Export Compliance OfficerEmpowered OfficialOffice of Ethics and Compliance
Office of Sponsored ProgramsThe Pennsylvania State University200 Innovation Blvd, Suite 115
Phone: 814.867.2379
Fax: 814.865.3377
Email:
wlmowery@psu.edu
http
://export.psu.edu