Synopsys Export Compliance Process. Paula Baptista April 22, 2010
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1 Synopsys Export Compliance Process Paula Baptista April 22,
2 Synopsys Corporate Background Synopsys is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, IP and services used in semiconductor design and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and FPGA solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, system-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has more than 60 offices located throughout North America, Europe, Japan, Asia and India. 2
3 Export Compliance Overview All people involved with international sales, training, and support need to be familiar with Export Compliance requirements and processes Violations of export laws can have serious consequences including fines, imprisonment, and loss of export privileges The purpose of export controls is to make sure our products are not used to develop weapons or weapon technology unless approved by the appropriate government agencies Export controls are enforced by US laws and many other cooperating governments 3
4 Three Types of Export Concerns and Screening End-Use Screening End-User (Restricted Party) Screening Restricted Product/Destination Military, nuclear, missile, chemical, biological uses may be restricted Applies to all customer sites regardless of products sold End-Use Screening Checklist completed annually for all active sites Screen for customers to determine if on restricted party lists Applies to all customer sites regardless of products sold Customer names checked against government restricted party lists Export Classification Number (ECCN) of product determines if certain country destinations require export licenses 4
5 End-Use Screening We are required by law to know what customers are doing with our products All Customer sites must be screened annually using an enduse screening form in the Synopsys network OEM s will need to provide screening checklist forms to Synopsys for all customers receiving Synopsys technology Checklist indicates any potential end-use concerns, which are investigated by export compliance personnel Checklist must be approved to Synopsys export personnel prior to all sales Contact export personnel whenever there are any questions and/or concerns 5
6 Restricted Party Screening Restricted Party Screening is required by export laws RPL screening information will be included on the enduse screening form if a match is indicated the system will send an alert to the export compliance staff Export licenses may be required before we can transfer products, data, or information if the entity is listed as a gov t concern Individuals as well as company names can be screened export personnel will investigate the alert End-Use Screening checklist needs to include restricted party info BIS website contains lists to check: omplianceandenforcem ent/liststocheck.htm Site and/or shipment may be put on hold depending on analysis 6
7 Controlled Products and Destinations SW Products with ECCN 3D003, 3D001 & 5D002 that are exportcontrolled IP Products with ECCN 3E001 that are export- controlled In addition to China, Armenia, and Russia, there are a number of other countries to which export of these products is restricted without an export license When distributing from Hungary, Portugal or Ireland, all countries outside of the EU/CGEA require export licenses prior to shipment of the controlled products. These countries are Cuba, Iran, Iraq, Libya, North Korea, Syria, Sudan, Albania, Azerbaijan, Belarus, Burma, Cambodia, Georgia, Kazakhstan, Kyrgyzstan, Laos, Macao, Moldova, Mongolia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and Vietnam. 7
8 Controlled Products and Destinations Products with High-Level Encryption when sold as source code (5D002.c.1/ENC(b)(2)) Requires export license if sold to government end-users outside EU/CGEA countries Products with ECCN 3D003, 3D001 & 3E001 Requires export license if sold from the EU to end-users outside EU/CGEA countries 34 countries OK no export license required when selling controlled products 27 European Union countries & CGEA Countries: Australia, Canada, Japan, New Zealand, Norway, Switzerland, US All other destinations require export license when sold from Europe Export licenses only valid from [6 months up to 1 year] New licenses must be obtained annually to continue access to updates, support Expiration of export license means no downloads, updates, support possible even if required by our customer agreement Export laws over-ride all other legal obligations including contracts with customers 8
9 Controlled Products and Destinations Export Compliance team also controls the internal process to screen internal users who require access to export controlled products. IT administers certain server systems that are used to supply Synopsys tools internally. These process guidelines will be applied when internal access to export controlled products is requested. What is checked? Location and citizenship Internal end-use (e.g. Training, Providing support to local customers, etc.) Next Steps: If in EU/CGEA countries or export license is available provide the acess If outside EU/CGEA countries obtain export license before providing the access 9
10 Managing Risks with Controlled Products Our order processing system automatically checks the status of the end-use and restricted party screening checklist every time a sales order is entered or modified. If the status is denied, open, or expired, or if no checklist has been submitted, the system sends an alert to the export compliance team. The export team then takes appropriate steps to make sure the required checklist is submitted and approved 10
11 Controlled Products Communication Early notification needed when selling controlled products Alert Sales Ops and Export Personnel early to plan actions Export license can be obtained before negotiations finalized Sooner is better to avoid problems Export Licensing Process Determine which country to apply for export license (US, Ireland, Portugal or Hungary) Obtain end-user certificate on customer letterhead (signed by customer) Include high estimate of usage (number of licenses and value) Up to six weeks processing time after submission Export licenses list specific locations for use Addresses on order (both ship-to and sold-to) must exactly match addresses on export license 11
12 Export Licensing Information Contact the Export Specialist to discuss applications for all export licenses US applications may take 90 days to process Portuguese/Irish/ Hungarian applications could be processed within 6 weeks or less Export licenses may be pursued prior to completion of negotiations If an export license is required, the sale is blocked until the license is granted If a deal contains only one product requiring a license, the entire order must be held until the license is granted (per revenue recognition rules) It is advisable to negotiate deals for controlled products separately in order to avoid delays Apply for export license proactively for OEM (if needed) to allow transfer of technology to the OEM If export license needed, apply for end-customer export license proactively as soon as there is interest no need to wait to get an actual PO Recommendations 12
13 Transfer of Controlled Technology In addition to sales of controlled product, a technology transfer associated with controlled product may also be restricted Transfer of controlled technology to individuals who are not US citizens may require an export license. A transfer to an individual is considered an export to the country of the person s nationality (deemed export) When training/transferring restricted technical information, advanced screening must take place to prevent illegal deemed exports Contact export personnel prior to transfer of restricted technical information/training to citizens of restricted countries 13
14 Transfer of Controlled Technology Restricted technology transfers include: , phone calls, personal conversations, and faxes containing technical information about a controlled product or technology Training classes on how to use a controlled product Technical papers and documentation about how controlled products function or are used Demos, evaluation, updates, and benchmarking of controlled products An export license is required in advance of the above actions if transfer involves controlled technology in a restricted location General sales / marketing information about a controlled product is not restricted if there is no technical information included Information about expected results is not restricted Information about how a controlled product functions or is used is restricted 14
15 Additional Information Our Export Compliance Policy which includes Corporate Electronic Transmission of Synopsys Software is available at our intranet Export Compliance Guide for Sales and related teams that interact with Customers Export Classifications (ECCNs) of all Synopsys Products are available on our internal and external web pages On-line training modules are available and required of all new employees throughout the company Export Compliance Team occasionally sends training messages to specific groups of employees to reduce the risk of non-compliance Additional reference information available BIS web pages recommended reading: EU export regulations ITAR Information 15
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