Fundamentals of Export Controls Compliance for University Research Administration

Transcription

1 Fundamentals of Export Controls Compliance for University Research Administration Jennifer Saak, Ph.D. June 26, 2014 About MAXIMUS Established in 1975; Headquartered in Reston, Virginia Largest publicly held firm dedicated to providing program management services and solutions to State and Local government, K 12 school districts, higher education institutions, nonprofits, and hospitals Revenues exceed $1.2 Billion; Over 11, 000 employees in more than 220 offices in the US, Canada, Australia, and UK 1

2 MAXIMUS Higher Education Practice Headquartered in Northbrook, IL Serves over 150 colleges and universities, in 49 states; Puerto Rico, US Virgin Islands 90 top 100 research institutions $2M to $1B in research MAXIMUS Products and Services F&A Consulting Services F&A Proposal Preparation (Long and Short Form) Space surveys/reviews Negotiations with DHHS DCA & ONR/DCAA Fringe Benefits Rate Proposals Assistance with federal Disclosure Statement (DS 2) Reviews of Service Centers and/or Recharge Centers OMB Uniform Guidance (2 CFR Part 200) Diagnostic education/ombuniform guidance 2

3 MAXIMUS Products and Services F&A Consulting Services Comprehensive Rate Information System Industry leading proprietary F&A software used by over 150 universities to prepare, produce, optimize F&A Proposals since 1988 Most robust web based Space Survey and Space Inventory tool on market (since 2003) Eliminates paper and reduces time Over 50 universities use WebSpace MAXIMUS Products and Services Effort Reporting Consulting and Software Pre and Post Award Consulting Services and Training Research Operational Reviews Business Process Review and Improvement Strategic Planning for Research Growth Federal Compliance/Risk Assessment Transition Staffing Audit Response Assistance Proposal Writing and Evaluation Export Control Compliance 3

4 Fundamentals of Export Controls Compliance for University Research Administration Jennifer Saak, Ph.D. June 26, 2014 Topics Overview of U.S. export controls regulations Classification and licensing principles Research and technology High risk areas and best practices for universities MAXIMUS services Key take aways 4

5 What are the Relevant Regulations? Department of Treasury Office of Foreign Assets and Control (OFAC) Economic sanctions and embargoes Department of State Directorate of Defense Trade Controls (DDTC) International Traffic and Arms Regulations (ITAR) United States Munitions List (USML) Department of Commerce Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) Commerce Control List (CCL) U.S. Participation in Multi National Agreements Wassenaar Arrangement Conventional arms and dual use goods and technologies Chemical Weapons Convention (CWC) Australia Group (AG) Chemical or biological weapons Missile Technology Control Regime (MTCR) Missiles and missile technology Nuclear Suppliers Group (NSG) 5

6 OFAC Regulations Department of Treasury, Office of Foreign Assets Control Embargoed and sanctioned countries Entities and persons with which U.S. Persons cannot do business Consolidated list of denied/restricted parties Over arching rules Commerce vs. State Regulations Department of Commerce Dual use and less significant military use items, technology, and software Department of State Physical commodities, technical data, software, and services for military purposes Includes certain data transfers within the U.S. Specific terminology Jurisdiction determination 6

7 Risk of Non Compliance Department of Commerce Civil penalties up to $250,000 per violation or 2x the transaction Criminal penalties 20 years imprisonment and up to $1,000,000 per violation Denial of export privileges Damage to reputation Risk of Non Compliance Department of State Maximum civil penalty $500,000 per violation Criminal penalties up to $1,000,000 and 20 years imprisonment per violation Denial of export privileges Damage to reputation 7

8 Recent Enforcement Cases Raytheon $8M 2013 United Technologies Corporation $55M 2012 DHL $9.4M 2009 Lockheed Martin $3M 2007 Even at Universities University of Massachusetts Lowell (2013) Shipping EAR99 antennae and cables to company on the Entity List Suspended civil fine $100,000 Dr. Mohamad Nazemzadeh, MD at University of Michigan (2012) Coil ilfor a magnetic resonance imaging i machine Physical export to Iran Case pending 8

9 Even at Universities Dr. Thomas Butler, MD at Texas Tech (2003) Physical export of bacteria related to bubonic plague 2 year prison sentence and $37,400 civil penalty Denial of export privileges for 10 years Professor Roth, Univ. of Tennessee, Professor Emeritus (2009) Plasma actuators for military drones Export controlled technical data, graduate students from China and Iran Exports to China 4 year prison sentence Classification and Licensing Principles 9

10 Core EAR Classification Principles Physical commodity, technology, and software Including: materials, chemicals, biological substances, equipment, parts, components, attachments, t accessories, and finished goods Commerce Control List (CCL) contains specific items as well as categorical descriptions (11 Categories) Export Control Classification Number (ECCN) Smaller the serial number, higher h the controls EAR99 Basic EAR Licensing Principles Analyze combination of item and recipient or destination country license required? Does a license exception apply? Requirements? No fee to apply for one Turn around time can be up to 4 6 weeks Approved license comes with terms and conditions and expiration date Applicable to specific transaction 10

11 Research and Technology Publicly Available Exception Publicly available is a defined term Generally accessible to the interested public in any form Already published or genuinely intended to be published Free or at cost for reproduction or distribution Arise during or result from fundamental research" Examples 11

12 Fundamental Research Exception NSDD 189 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 h ordinarily il are restricted for proprietary or national security reasons. Examples of Potential Deemed Exports Present technical findings of research at a department seminar Share research results with a sponsor Upload technical data to a shared drive or the cloud experimental conditions to a graduate student Provide access to university wide database 12

13 Export Controls & I 129 Visas U.S. US Citizenship and Immigration Services (UCIS) I 129 visa application form University must validate three statements Reviewed the U.S. export control regulations License is/is not required by the Commerce/State to release controlled technology to applicant Applicant will not receive the controlled technology until after obtaining required license Technology Control Plan (TCP) Written plan Core procedural ldocument Live document Supported by a university export controls policy Required for your deemed export license application 13

14 TCP Questions to Consider Scope? Responsible personnel? Physical access controls? Electronic access controls? Audit plan? Training? High Risk Areas and Best Practices 14

15 High Risk Areas for Universities Industry sponsored contracts Certain federally sponsored grants International research collaborations Entrepreneurial activities of faculty (on/off campus) Visiting international scholars Corporate consortiums Industry service agreements Industry sponsored clinical trials University Best Practices Comprehensively consider all areas of risk Research Awards Research Departments Material & Technology Transfers Personnel International Shipping International Travel Supplier & Vendors Environmental, Health, and Safety 15

16 Best Practices: Stakeholders Consider full range of university operations Research administration (pre and post award) Faculty, post docs, graduate students, research staff Human resources Admissions Procurement Facilities Health/Safety t Shipping General counsel Biosafety Best Practices: Classification Identify the relevant portions of the CCL Create tailored classification checklists Engage your faculty and PI s Implement standard protocol to classifying Train all relevant owners and resources 16

17 Grants, Contracts, and Agreements Tips Identify export controls risk early in the proposal stage Understand all publishing or data sharing restrictions Understand deemed export implications on staffing Ifrequired required, ensure TCP is implemented to support project execution MAXIMUS Export Controls Services Export Controls Risk Assessments Export Control Process Improvements Technology Control Plan Development Customized Live and Virtual Training 17

18 Key Take Aways U.S. export controls regulations cover the transfer of physical goods, technical information, software, and services. There are also government requirements for uncontrolled items. The fundamental research exception does not apply to all university research programs. A robust export controls compliance program addresses all facets of sponsored research administration and execution. Questions? Jennifer Saak, Ph.D. Je e Saa, jennifersaak@maximus.com 18