Export Compliance

NSDD 189 established the national policy for controlling the flow of scientific, technical, and engineering information produced in federally funded fundamental research at colleges, universities, and laboratories. The Directive defines fundamental research as follows:

“’Fundamental research’ means basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.”

NSDD 189 makes clear that the products of fundamental research are to remain unrestricted to the maximum extent possible. When control is necessary for national security reasons, classification is the only appropriate mechanism.

Information that arises during, or results from, fundamental research and is intended to be published is not subject to the International Traffic in Arms Regulations (ITAR) or the Export Administration Regulations (EAR) under the Fundamental Research Exclusion (FRE). However, there are certain situations where the FRE does not apply, including restricted inputs, proprietary information and other factors.

Most of SDSU’s research activities are exempt from export control laws because SDSU supports the free publication of research results. As such, SDSU generally qualifies for the fundamental research exclusion (“FRE”) to export control regulations. However, SDSU’s research activity can become subject to export controls in several ways, such as by any breach of the FRE. Examples of potential ways that SDSU could become subject to export controls include, accepting any of the (FAR) contractual clauses:

• S. Government-sponsored research
  • DFARS 252.204-7000
  • DFARS 252.204-7008
  • DFARS 252.204-7004
  • DFARS 252.204-7012
  • FAR 52.204-2
  • FAR 52.227-17
  • ARL 52.004-4400
  • AFMC 5352.227-9000
  • DEAR 952.204-71

When a sponsor is discussing potential research collaboration with SDSU researchers, and they express the need to share some information that it considers proprietary or confidential to allow for effective discussions, the need for a Non-Disclosure Agreement (NDA) arises. In these circumstances, the sponsor may ask that the parties enter into a formal legal agreement to protect the confidentiality of the sponsor’s pre-existing proprietary information.

To preserve the fundamental research exclusion, NDAs should only restrict information peripheral to the research program (sufficiently remote from the intellectual significant portions of the research) and the disclosure restriction must not affect the ability to publish the research results.

Accepting publication restrictions can subject the research to US export control regulations which impose strict access, dissemination and participation restrictions on the transfer of certain items including technical data, technology, software, to foreign nationals.

Yes. For instance, technology that arose from the research project through a non-disclosure agreement is subject to export control regulations.

For any sponsored research, it is prime contractor’s responsibility to determine whether the intended research qualifies for the Fundamental Research Exclusions under the ITAR or the EAR. As such, if your intended research proposal is flagged for export control issues mentioned above, please fill out the Fundamental Research Determination Request Form and click submit it for export analysis.

When a sponsored project is determined to be subject to export controls and no exclusions or exemptions are available, the Program Director of Research Integrity and Compliance:

• Work with Principal Investigators (PIs) and researchers to facilitate understanding of and compliance with export control requirements
• Assist PIs in the development of a Technology Control Plan (TCP) for projects that involve export-controlled items or information to ensure compliance with export control requirements
• Where necessary, contact the Program Director of Research Integrity and Compliance for Export Jurisdiction and Classification Determination (See Export Jurisdiction and Classification Request Form)
• Inform the PI in writing of any restrictions imposed by any license or other approval obtained for the project, and obtain the PI’s confirmation of understanding and acceptance of those restrictions
• Monitor export-controlled research projects to ensure that the research is conducted consistent with the requirements of any TCP, license, or other approval
• Conduct restricted party screening when needed (See Denied Party Screening Procedures)
• Maintain records pertaining to the management of export control issues in sponsored research projects (in Cayuse?)

Lastly, although the information that arises from fundamental research and is intended to be published, if your research involves any of the items below, please contact the Program Director of Research Integrity and Compliance for guidance:

• Accessing source code of encryption (non-open source)
• Research conducted outside the United States
• Shipping of physical items including test samples created during or result from fundamental research
• Use of equipment, tools or devices controlled by ITAR

For example: My project is determined to be fundamental research by the Export Compliance Officer / Program Director of Integrity and Compliance. I would like to send a test sample material resulted from the research to a research laboratory in the Netherlands for testing. Do I need export review?

• Program Director of Integrity and Compliance. I would like to send a test sample material resulted from the research to a research laboratory in the Netherlands for testing. Do I need export review?

  Yes. You must first obtain an approval from the ECO prior to shipment. Technology (meaning “technical data”) or software that arises during or results from fundamental research and is intended to be published is excluded from the export control regulations. However, if you are sending or shipping hardware which is arose or resulted from the fundamental research is still subject to the export control regulations.

If you are a researcher, the following CITI training courses must be completed prior to your activity commending and must also be maintained no less than once every two years.

• Introduction to Export Compliance (ID 16800)
• Export Compliance for Researchers (ID 16801)

Although travel to most countries is not restricted or prohibited, the Department of Treasury, Office of Foreign Assets Control (OFAC) broadly regulates and restricts interactions with certain countries (i.e., Cuba, Iran, North Korea and Syria).

These restrictions vary depending on the country and change frequently depending on economic and political relations. OFAC sanctions of embargoed countries prohibit the transfer of assets (any value) and other transactions.

Payments to or from certain persons, businesses, or organizations may be prohibited. SDSU must not enter into contracts, conduct business, or otherwise participate, directly or indirectly, in any financial activities with any entity or person found on any government issued restricted, blocked or denied party lists. This may include speaker contracts, international subcontracts, purchases from individual vendors, or payments to research participants.

Screening must be conducted to determine if SDSU is permitted to do business or provide financial assistance to the individual or entity with whom SDSU personnel will be transacting business. The Program Director of Research Integrity and Compliance will assist in determining if financial assistance or transaction is allowed.

In general, SDSU employees and students can bring the university laptop as long as it does not contain any export-controlled data or special purpose encryption software. SDSU owned laptop computers routinely contain commercial encryption software and are subject to the Export Administration Regulations (EAR). Therefore, to take your workstation laptop computers, before the trip, you need to obtain a TMP License Exception Certificate from the Program Director of Research Integrity and Compliance.

In addition, many countries restrict your ability to bring and use an encrypted device including laptop computer with cybersecurity software in the country (e.g., China and Russia). It is possible that any encrypted devices including SDSU laptop computer you bring without advance permission from that country may be seized upon arrival.

Be aware that some foreign governments have regulations that permit the seizure of travelers' laptop computers and the review of their contents. If you are planning to take a trip to these countries, contact the IT department to request a loaner ‘clean laptop’ for your trip.

If the laptop contains something other than standard commercial encryption software or are traveling to an OFAC-sanctioned country (Cuba, Iran, North Korea, and Syria), contact the Director of Research Integrity and Compliance.

When planning to ship or carry high valued items for temporary use in a location outside of the U.S., please refer to the “Temporary Export” section under “International Shipping and Exports” procedures.

Most research that takes place at SDSU is considered “fundamental research”, the results of which are excluded from U.S. export control laws and regulations. This includes information and software that is published, or publishable without constraints (e.g., sponsor-imposed restrictions on publications, NDA etc.).

However, if SDSU or its partners have accepted restrictions on the free dissemination of the information received or generated in the course of a research project, or has agreed to restrictions on who can work on the project (usually on the basis of nationality), then export control regulations apply and an export license may be required prior to taking the information out of the United States or discussing/sharing it with foreign nationals.

When presenting data/information in an international setting (including in the U.S. where the audience may include foreign nationals), SDSU employees and students must limit the presentation to only information or data that is published or is publicly available. Be careful not to include or discuss any proprietary, unpublished, or export-controlled data or information as that may constitute an unauthorized export.

Prior to engaging in any export activity, the following CITI training courses must be completed and must also be maintained no less than once every three years.

• Introduction to Export Compliance (ID 16800)
• Export Compliance for Researchers (ID 16801)

There are two primary agencies responsible for regulating US exports. These are the Directorate of Defense Trade Controls (DDTC) within the US Department of State and the Bureau of Industry and Security (BIS) within the US Department of Commerce.

DDTC implements the Arms Export Control Act which governs the export of military goods and technology on the U.S. Munitions List (USML) through the administration of the International Traffic in Arms Regulations (ITAR).

Defense articles which do not meet this standard as well as those that have a dual use (i.e. could be used in both military or civilian applications) are captured in the Commerce Control List (CCL) and controlled by BIS. The CCL is administered by the Export Administration Regulations (EAR).

The first step is to determine the appropriate U.S. Government agency that has jurisdiction over export controls for the item, technology, or service by comparing the item’s characteristics to the appropriate sections of the U.S. Munitions List (USML). If the item is not enumerated or described in any of the USMLs, the next step is to review the Commerce Control List (CCL) to see if it meets any of the technical descriptions.

If the item is not called out on the CCL or does not meet the technical descriptions under any of the CCL, it is classified as EAR99 which is the designation for low-technology consumer goods. The Department of Commercial classifies most commercial items as EAR99.

Export JC must be performed prior to engaging in:

• International Shipping
• Research Project subjects Export Controls
• Hand-carrying commodities (hardware) including software, technology to International Travel
• Technology Transfer to foreign countries
• Technology Transfer to foreign nationals including SDSU staff, faculty members and students

All international shipping must comply with export control laws and regulations, including the Export Administration Regulations (“EAR”) and the International Traffic in Arms Regulations (“ITAR”). Dual-use commodities controlled under the EAR may still require an export license for export, depending upon their Export Control Classification Number (“ECCN”).

While many items that are used on a daily basis fall within the “EAR99” classification, or no license required, a number of items that are frequently used in academic research do not and will require an export control review and classification. Defense articles and associated technical data subject to the ITAR always require a license for export.

The export control laws and regulations may require that SDSU obtain an export license for the export of certain items. To determine whether an export license is required to ship your goods, the following factors that must be considered:

• What is the item, product, or information?
  • Is it subject to the EAR or ITAR? What is the ECCN or USML?
• Where is the item going?
  • Is the destination country embargoed or sanctioned?
  • Is the destination country considered countries of concern? Certain countries are subject to strict export requirements.
• Who is the end user? Is the end user a restricted party?
  • The U.S. government maintains lists of individuals and entities that U.S. organizations are prohibited from collaborating with or shipping to—known as “restricted parties.”
• What is the intended end use? Is that end use prohibited?
  • Any end use that has a military or space application or that is contrary to national security will require an extra review.

All requests must fill out the shipping request form (Link under Construction) for each international shipment.

When planning to ship or carry high valued items for temporary use in a location outside the U.S., SDSU personnel should consider obtaining an ATA Carnet to avoid paying duties.

An ATA Carnet is a globally accepted customs document, often informally referred to as a “passport for goods” which facilitates international business by avoiding extensive customs procedures, eliminating payments of customs duties and excise taxes, and eliminating the purchase of temporary import bonds.

Incoterms are a set of rules which define the responsibilities of sellers (exporters) and buyers (recipients) for the delivery of goods under sales contracts or agreements.

SDSU uses standard trade definitions (called Incoterms) to spell out who’s responsible for the shipping, insurance, and tariffs on an item; they’re commonly used in international contracts and are protected by International Chamber of Commerce copyright. Incoterms significantly reduce misunderstandings among traders and thereby minimize trade disputes and litigation.

The following agreements are determined in the Incoterms contracts:

• Whether SDSU or buyer/recipient is responsible for arranging insurance, authorizations and other formalities;
• Until when the recipient or SDSU is responsible for arranging the transport;
• The moment within the transport until when the costs and risks are borne by SDSU or buyer/recipient;
• Obligations of buyer/recipient and SDSU.

Commonly used Incoterms

Here are some of the incoterms that are commonly used:

• Ex Works (Place) (EXW) – SDSU places the goods at the disposal of the buyer/recipient at the SDSU’s premises. Usually, the documents
• Free On Board (Port) (FOB) – SDSU delivers the goods on board the vessel nominated by the buyer/recipient at the named port of shipment or buyer/recipient the goods already so delivered
• Carriage Paid To (Place) (CPT) – SDSU delivers the goods to the carrier or another person nominated by SDSU at its place (if any such site is agreed between parties)
• Delivered Duty Paid (DDP) – SDSU delivers the goods when the goods are placed at the disposal of the buyer/recipient cleared for import on the arriving means of transport ready for unloading at the named place of destination.