Overview of U.S. Export Laws
A. Government Departments and Agencies
For national security and foreign policy reasons, the U.S. maintains comprehensive controls and sanctions on the export and re-export of U.S.-origin goods and technology to all destinations around the world. The legal authority for these controls is authorized by a variety of laws, and administrated by several different government agencies, depending on the nature of the goods to be exported or the country of ultimate destination. Each administering agency maintains its own regulations. The following is a summary of the primary U.S. Government agencies that govern the export and re-export of products from the United States and related transactions subject to U.S. jurisdiction:
• U.S. Department of Commerce’s Bureau of Industry and Security (BIS) administers the Export Administration Regulations (EAR) that govern the export of commercial and dual-use goods, software and technology, including hardware and software containing certain encryption algorithms. BIS also controls certain defense-related items, including certain parts and components for military aircraft and other military end-uses.
• U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) administers the International Traffic and Arms Regulations (ITAR) that govern the export of defense articles, defense services and ITAR controlled technical data.
• The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers country-specific economic and trade sanctions that often include restrictions on most or all transactions with and exports to targeted countries and persons. In addition, both the Treasury and Commerce Departments administer anti-boycott laws, which are designed principally to counter Arab country boycotts of Israel and Israeli goods.
• U.S. Census Bureau – While not a formal export control agency, the Census Bureau’s Foreign Trade Division is responsible for maintaining and implementing the Foreign Trade Regulations (15 CFR Part 30) that govern the preparation and submission of Electronic Export Information (EEI) submitted prior to most exports from the United States. The Census Bureau shares this export data with BIS, OFAC, DDTC, U.S. Customs and Border Protection and other regulatory and law enforcement agencies.
• U.S. Customs and Border Protection (CBP) – While primarily responsible for imports into the United States, CBP officers at various U.S. ports oversee a wide variety of export-related activities and have the authority to inspect, detain and seize export shipments if they are not in compliance with the laws and regulations issued by BIS, DDTC and OFAC.
• Other U.S. Government agencies involved in export control-related issues include:
Drug Enforcement Agency
Environmental Protection Agency
Department of Energy
Nuclear Regulatory Commission
Patent and Trademark Office
Food and Drug Administration
Fish and Wildlife Service
B. What Is An Export?
For purposes of U.S. export control laws, the term “export” covers a broad range of activities that include the export of products, services or information. In general, an export occurs when there is any transfer to any non-U.S. person, either within or outside of the U.S., of controlled commodities, technology, or software, by physical, electronic, oral, or visual means, with the knowledge or intent that the items will be shipped, transferred, or transmitted outside of the U.S. Under U.S. export laws, KU is an “exporter,” and there are four basic ways KU can export:
• Sending or carrying items out of the country: For example, sending a part by U.S. mail or a with a freight forwarder (such as Federal Express), or carrying an item in carry-on luggage out of the
• Transferring Technical Data or Disclosing Technology (“Deemed Export”): Disclosing controlled technology (including oral or visual disclosure) or transferring controlled technical data, to a non-U.S. person , whether in the United States or abroad. Such disclosures can occur with virtually any exchange of information – including telephone conversations, technical proposals, fax communications, e-mails and other electronic communications, the sharing of computer databases, briefings, or training sessions. Under the EAR, this type of disclosure to a non-U.S. person is commonly referred to as a "deemed export.”
• Providing a Defense Service: Under ITAR, providing or furnishing 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 is known as a “Defense Service.”
• Re-Export items/information: A re-export occurs when an item or information is transferred to a foreign person who then “re-exports” the item/information to another country. Note: US regulations follow the exported item/information wherever it goes.
C. How KU Exports
Below are some specific ways in which the KU community may export:
- Collaborating with foreign colleagues
- Shipping equipment or material to a foreign country
- Providing foreign nationals access to controlled information
- Providing controlled technology in proposals or other correspondence
- Working with a foreign country/foreign national subject to US embargo
- Hiring a foreign national on an H1B visa
- Presenting controlled information at a conference
- Traveling with a laptop overseas
D. Key Export Regulations
1. The International Traffic in Arms Regulations
The International Traffic in Arms Regulations (ITAR), 22 C.F.R. §§ 120-130, governs the export and re-export of defense articles, defense services and related technical data from the United States to any foreign destination, or to any foreign person, whether located in the United States or abroad.
a. Items Controlled Under The ITAR
The ITAR controls three types of things: defense articles, technical data, and defense services.
• Defense Article means any item that is specifically designed, developed, configured, adapted, or modified for a military, missile, satellite, or other controlled use listed on the USML. This also includes models, mock-ups, or other items that reveal Technical Data relating to items designated in the USML. In general, if an item contains any components that are controlled under the ITAR, the entire item is controlled under the ITAR. For example, if an instrument for contains a focal plane array which is ITAR, then the entire instrument would be considered ITAR. This is known as the “see through rule.”
• Technical Data means any information for the design, development, assembly, production, operation, repair, testing, maintenance, or modification of a defense article. Technical Data may include drawings or assembly instructions, operations and maintenance manuals, and email or telephone exchanges where such information is discussed. Sometimes it is easier to define Technical Data by what it is not: Technical Data does not include general scientific, mathematical, or engineering principles commonly taught in schools, information present in the public domain, general system descriptions, or basic marketing information on function or purpose.
• Defense Service means providing assistance, including training, to a foreign person in the United States or abroad in the design, manufacture, repair, or operation of a defense article, as well as providing technical data to foreign persons. Defense services also include informal collaboration, conversations, or interchanges concerning technical data.
b. The United States Munitions List (USML)
Section 121.1 of the ITAR contains the USML which consists of 21 categories and lists commodities and related technical data, and defense services that are controlled for export purposes.
I FIREARMS CLOSE ASSAULT WEAPONS AND SHOTGUNS
II GUNS AND ARMAMENT
IV LAUNCH VEHICLES, GUIDED MISSILES, BALLISTIC MISSILES, ROCKETS, TORPEDOES, BOMBS AND MINES
V EXPLOSIVES AND ENERGETIC MATERIALS, PROPELLANTS, INCENDIARY AGENTS AND THEIR CONSTITUENTS
VI VESSELS OF WAR AND SPECIAL NAVAL EQUIPMENT
VII TANKS AND MILITARY VEHICLES
VIII AIRCRAFT AND ASSOC. EQUIPMENT
IX MILITARY TRAINING EQUIPMENT AND TRAINING
X PROTECTIVE PERSONAL EQUIPMENT AND SHELTERS
XI MILITARY ELECTRONICS
XII FIRE CONTROL, RANGE FINDER, OPTICAL AND GUIDANCE AND CONTROL EQUIPMENT
XIII AUXILIARY MILITARY EQUIPMENT
XIV TOXICOLOGICAL AGENTS, INCLUDING CHEMICAL AGENTS, BIOLOGICAL AGENTS AND ASSOCIATED EQUIPMENT
XV SPACECRAFT SYSTEMS AND ASSOCIATED EQUIPMENT
XVI NUCLEAR WEAPONS, DESIGN AND TESTING RELATED ITEMS
XVII CLASSIFIED ARTICLES, TECHNICAL DATA AND DEFENSE SERVICES NOT ELSEWHERE ENUMERATED
XVIII DIRECTED ENERGY WEAPONS
XIX GAS TURBINE ENGINES AND ASSOC. EQUIPMENT
XX SUBMERSIBLE VESSELS, OCEANOGRAPHIC AND ASSOCIATED EQUIPMENT
XXI MISCELLANEOUS ARTICLES
2. The Export Administration Regulations (EAR)
The Department of Commerce Bureau of Industry and Security (BIS) regulates the export of commercial products and technology under the EAR. Articles, information and software, that are not subject to ITAR control, and are not excluded, fall under the EAR. Unlike the ITAR, however, the EAR does not control services.
a. Items Controlled Under The EAR
Generally, all items of U.S.-origin, or that are physically located in the United States, are subject to the EAR. The EAR includes restrictions on re-exports of U.S.-origin goods and technology as well as direct exports from the United States. Foreign manufactured goods are generally exempt from the EAR re-export requirements if they contain less than a de-minimis level of U.S. content by value.
b. Technology Controlled Under the EAR
The EAR controls apply to exports and re-exports of U.S.-origin technology and technical data. Under the EAR, the term “technology,” which can take the form of either technical data or technical assistance, is broadly defined to include “specific information necessary for the ‘development’, ‘production’, or ‘use’ of a product.” “Technical data” includes “blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on other media or devices such as disk, tape, read-only memories.” For purposes of the national security controls, “technology” is generally controlled if it is related to the development, production, or use of items that are themselves subject to a license requirement.
c. The Commerce Control List (CCL)
Within the EAR is a list of controlled commodities, technology, and software known as the CCL. The CCL includes not only a list of items and related technology that are controlled multilaterally for national security, nuclear non-proliferation, chemical and biological weapons and missile technology reasons, but also a host of items and related technology that are controlled unilaterally by the United States for foreign policy, nonproliferation, anti-terrorist, or short supply reasons. Every item that is controlled the EAR has an Export Control Classification Number (ECCN).
An ECCN is an alpha-numeric code, such as 3A001, that describes the item and indicates licensing requirements. If an item is not listed on the CCL, it is designated as EAR 99. EAR 99 items generally consist of low-technology consumer goods and do not require a license in most situations.
CCL Categories 5 Product Groups
0 Nuclear & Miscellaneous A Systems, Equipment and Components
1 Materials, Chemicals, Microorganisms and Toxins B Test, Inspection and Production Equipment
2 Materials Processing C Material
3 Electronics D Software
4 Computers E Technology
5 Part 1 Telecommunications
5 Part 2 Information Security
6 Sensors and Lasers
7 Navigation and Avionics
9 Aerospace and Propulsion
Examples of ECCN
The pivotal step for understanding what types of restrictions apply to a product/service or technology under U.S. export controls is determining how it is “classified” for export purposes. Classification is essentially a two-step process. Both layers of analysis call for technical judgments. The first step is determining whether the item is subject to the “jurisdiction” of the State Department’s ITAR or, the Commerce Department’s EAR. Second, the item must be properly classified under either the ITAR’s USML (such as Cat. VIII) or the EAR’s CCL such as 3A001 or EAR 99.
For items, technology or services that do not fall squarely into an established regulatory category, it may be prudent to obtain a written determination of the jurisdiction (whether it is subject to ITAR or EAR) and its classification from the DDTC. This is known as a “Commodity Jurisdiction” or “CJ”. If the item or technology is definitively not subject to ITAR and is instead subject to the jurisdiction of the EAR, KU may obtain a CCATS from BIS to determine its classification.
KU employees must contact the Office of Export Compliance (OEC) when classifying any items for export. CJ and CCATS requests must be handled by the ECO with assistance from outside counsel, as necessary. Such requests are submitted on KU letterhead and must be signed by the ECO or other Empowered Officials.
4. Exclusions from ITAR and EAR
Both the ITAR and the EAR have special provisions relating to information that is not subject to export controls—meaning it is not classified as either ITAR or EAR, but rather is excluded because it is considered “public domain” under ITAR or "publicly available” under EAR. EAR 15 C.F.R. 734.3(b)(3), “publicly available” except with respect to certain encryption technology and software, publicly available technology and software is not subject to any restriction or licensing requirement under the EAR. This includes information that has been or will be made publicly available by:
- Publication in periodicals, books, print, electronic, or other media available for general distribution to a member of the public or to a community of persons interested in the subject matter;
- Release or dissemination at open seminars, trade shows, conferences, or other open gatherings in the United States;
- Ready availability at public or university libraries; or
- Patents and patent applications available at any patent office.
- Information resulting from “fundamental research,” where the resulting information is ordinarily published and shared broadly within the scientific community.
A. ITAR §120.11
“Public domain” Information in the public domain, is not considered “technical data” under the ITAR, and is therefore not subject to any restriction or licensing requirement. The ITAR defines information in the public domain as information which is published and which is generally accessible to the public as follows:
- Through sales at newsstands and bookstores;
- Through subscriptions that are available without restriction to any individual who wishes to obtain or purchase the published information;
- At libraries open to the public or from which the public can obtain documents;
- Through patents available at any patent office;
- Through unlimited distribution at a conference, meeting, seminar, trade show, or exhibition, generally accessible to the public, in the United States;
- Through fundamental research in science and engineering at accredited institutions of higher learning in the U.S. where the information is ordinarily published and shared broadly in the scientific community;
- Through public release after approval by the relevant U.S. Government agency or department; or
- Through second class mailing privileges granted by the U.S. Government;
- Through publication on a public Internet site.
B. Fundamental Research
During the Reagan administration, several universities worked with the Federal government to establish national policy for controlling the flow of information produced in federally funded research at colleges, universities and laboratories resulting in the issuance of the National Security Decision Directive 189 (“NSDD”), National Policy on the Transfer of Scientific, Technical and Engineering Information on September 21, 1985. In a letter dated November 1, 2001, President George W. Bush’s administration reaffirmed NSDD 189. NSDD 189 provided the following definition of fundamental research that has guided universities in making licensing decisions relative to fundamental research exclusions provided under both the EAR and ITAR:
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.
1. Parameters of Fundamental Research
Most activities on KU’s campuses that involve the transfer of Technical Data under ITAR and Deemed Exports under EAR will fall under the “Fundamental Research Exclusion,” however, there are certain key restrictions which must be strictly followed. University activities or research will NOT be considered fundamental research, and therefore subject to the EAR, if:
• Publication of research results is subject to restriction or withholding of research results, or substantial prepublication review, by a sponsor (other than for the protection of patents and/or sponsor’s confidential proprietary information); or
• The research is funded by the U.S. Government and is subject to specific access (such as restricting work by foreign nationals) and dissemination controls.
Similarly, under the ITAR, university activities/research in science and engineering at accredited institutions of higher learning in the U.S. will NOT be considered fundamental research, and is therefore subject to the ITAR if:
• Publication of scientific and technical information resulting from the activity is restricted; or
• The research is funded by the U.S. Government and is subject to specific access and dissemination controls.
C. Educational Information
Both the ITAR and the EAR address the issue of general educational information that is typically taught in schools and universities. Such information, even if it relates to items included on the USML or the CCL, does not fall under the application of export controls.
• Under ITAR: Information in the public domain, or information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities, is not considered “technical data” under the ITAR, and is therefore not subject to any restriction or licensing requirement.
• EAR provision: The EAR provides that publicly available "educational information" is not subject to the EAR, if it is released by instruction in catalogue courses and associated teaching laboratories of academic institutions.
For example, a university catalogue course will not be subject to export controls (and foreign students may attend) even though the technology is listed on the CCL or the course contains unpublished results from laboratory research, so long as the university did not accepted separate obligations with respect to publication or dissemination.
5. License Determinations
Once the classification has been determined (and it is not excluded from the regulations) the next step is determining whether a license is required, or whether there is a license exception that can be used. Under the ITAR, there are generally two ways to export an item, transfer technical data or provide a defense service: under a license or under an exemption. Under the EAR, an item or technology can be exported under a license, under a license exception or No License Required (NLR).
1. ITAR Licenses
Generally, any U.S. person or entity that manufactures, brokers, or exports defense articles or services must be registered with DDTC. Registration is required prior to applying for a license or taking advantage of most license exemptions. Once registration is complete, an exporter may apply for an authorization to export by submitting a license application for the export of defense articles or technical data; or a more complex application, such as a Technical Assistance Agreement (TAA). U.S. law requires prior DDTC approval for the following transfers of ITAR controlled items:
• Export of defense articles (Form DSP-5) ;
• Export of technical data for marketing and visits by foreign persons (Form DSP-5);
• Export of Defense Services and technical data (Manufacturing License Agreements, Technical Assistance Agreements);
• Temporary import for repair/modification (DSP-61 for other than routine transactions; routine shipments may require special import procedures);
• Classified defense articles/technical data (Form DSP-85);
• Minor amendments to licenses (Form DSP-119);
• Temporary export for marketing demonstrations (Form DSP-73);
• Re-export Authorizations (Submit on letterhead as “General Correspondence”).
2. ITAR Exemptions
There are numerous license exemptions authorized under various parts of the ITAR. These exemptions can be complicated, construed narrowly, require specific record keeping and must be approved by the ECO prior to use.
a. Full-Time University Employees
Under ITAR § 125.4(b)(10), the ITAR allows KU to disclose unclassified technical data in the U.S. to a foreign person who is the university’s bona fide and full time regular employee. The exemption is available only if:
• The employee's permanent abode throughout the period of employment is in the United States;
• The employee is not a national of a country to which exports are prohibited pursuant to ITAR § 126.1 http://www.pmddtc.state.gov/regulations_laws/documents/official_itar/ITA... t_126.pdf);
• The university informs the individual in writing that the technical data may not be transferred to other foreign persons without the prior written approval of DDTC;
• The university documents the disclosure of technical data under the exemption providing:
- a description of the technical data;
- the name of the recipient /end-user;
- the date and time of export;
- the method of transmission (e.g., e- mail, fax, FedEx);
B. EAR Licenses and Exceptions
If an item is listed on the CCL, it may require a license or a license exception may be available. Items not listed on the CCL and designated as EAR 99, can generally be exported without a license, unless the export is to an embargoed country, or to a prohibited person or end-use. There is a three-step process for determining what controls apply, to which country, and whether a license exception may be available.
1. Determine Reason for Controls. The "License Requirements" section provides reasons for control. These reasons include:
CB Chemical & Biological Weapons
CC Crime Control
CW Chemical Weapons Convention
EI Encryption Items
FC Firearms Convention
MT Missile Technology
NS National Security
NP Nuclear Nonproliferation
RS Regional Security
SS Short Supply
SI Significant Items
2. Apply Country Chart. Once an item is identified as meeting the criteria for a particular ECCN, the user should refer to the Country Chart found at 15 C.F.R. § 738, Supp. 1. If the particular control applies to that country, a license is required. For example, Iran has an “X” under AT Column 1, therefore a license would be required unless an exception applied.
3. Identify Exceptions. The EAR contains a number of exceptions. Determining whether a particular exception applies requires review of the specific application as detailed in 15 C.F.R.§ 740, as well as review of the notes on applicable license exceptions following the ECCN entry. These exceptions include:
LVS Items of limited value (value is set under each ECCN).
GBS Items controlled for national security reasons to Group B countries.
CIV Items controlled for national security reasons to particular countries where end-user is civilian.
TSR Certain technology and software to certain countries.
APP Computer exports to certain countries.
KMI Encryption exemption for key management.
TMP Certain temporary exports, re-exports, or imports, including items moving through the U.S. in transit.
RPL Certain repair and replacement parts for items already exported.
GFT Certain gifts and humanitarian donations.
GOV Exports to certain government entities.
TSU Certain mass-market technology and software.
BAG Baggage exception.
AVS Aircraft and vessels stopping in the U.S. and most exports of spare parts associated with aircraft and vessels.
APR Allows re-export from certain countries.
ENC Certain encryption devices and software.
AGR Agricultural commodities.
CCD Authorization of certain consumer communication devices to Cuba.
Use of EAR exceptions must be reviewed by the Office of Export Compliance.