Research and Export Controls

The Export Administration Regulations (“EAR”) and International Traffic in Arms Regulations (“ITAR”) are two sets of federal export control laws that regulate the distribution to foreign nationals and foreign countries of strategically important products, services and information for reasons of foreign policy and national security.  These regulations apply to actual exports to foreign nationals and countries, and also to disclosures of certain types of data and information to foreign nationals in the United States.  Although EAR and ITAR considerations most often arise in the research context, they also arise when a university employee exports products, services, or information to a foreign country.

In the research context, EAR and ITAR considerations frequently arise in the following areas and disciplines:

  • Military or Defense Articles and Services
  • High Performance Computing
  • Dual Use Technologies (technologies with both a military and commercial application)
  • Encryption Technology
  • Missiles & Missile Technology
  • Chemical/Biological Weapons
  • Nuclear Technology
  • Select Agents & Toxins
  • Space Technology & Satellites
  • Medical Lasers

The following types of activities are covered by the EAR and ITAR:

  • Foreign Students/Employees: Participation by foreign national students and university employees in research where the sponsor attempts to restrict either the results of the research or who may be involved in the research on the basis of nationality
  • International Collaborations: Collaboration with overseas researchers or sponsors, particularly where the collaboration will involve foreign travel or the exchange of information with overseas collaborators
  • International Shipments: Shipping or personally bringing materials, equipment, or supplies to another country. (e.g., laptops, web-enabled cell phones, and other technology containing encryption hardware or software).
  • Technology transfer: Transfer of technology, technical data, or source code to a foreign country.
  • Foreign National Visits: Visits by foreign nationals to laboratories where controlled research is being conducted.
  • Restricted Data: Receipt of information that cannot be disclosed without permission of another party.
  • Proprietary Work: Performing proprietary work that involves controlled technology.

Please scroll below for further information on the EAR and ITAR and the types of activities they address, and contact the Office of Compliance if you believe that your research may be covered by export control regulations.

Overview of the EAR and ITAR

Export Administration Regulations (“EAR”)

The EAR regulate exports (including re-exports and “deemed exports”) of commercial and “dual-use” goods, software and technology (i.e., items intended for non-military applications that nonetheless may be useful for military purposes).  These regulations are administered by the Commerce Department’s Bureau of Industry and Security (“BIS”).

Exports of items identified on the CCL may require a specific license from the Commerce Department, depending upon the reasons for control applicable to the particular items, the country of destination and the purposes for which the items will be used.

Additional information and guidance regarding the EAR (15 C.F.R. Parts 730 to 774) is available on the BIS website at http://www.bis.doc.gov. In addition, the full text of the EAR, including the CCL, is available at http://www.access.gpo.gov/bis/ear/ear_data.html.

International Traffic in Arms Regulations (“ITAR”)

The ITAR regulates items and services that are considered to be “defense articles” or “defense services,” as well as certain temporary imports of foreign-made defense articles and “brokering” activities that have been identified by the U.S. government as being inherently or predominantly suited for military applications.

The defense articles and defense services subject to the ITAR include those goods, software and “technical data that appear on the United States Munitions List (“USML”) (“technical data” is information related to the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of a defense article).  Examples include firearms, ammunition, explosives, propellants, and military training equipment and any hardware, software, or related technical data.  Even if a specific item does not appear on the USML, it is controlled under the ITAR if it has been specifically designed, developed, configured, adapted or modified for a military purpose and does not have “predominant civil applications.”

With very few exceptions, the ITAR require exporters to obtain prior written authorization from DDTC before exporting or re-exporting defense articles or defense services or engaging in “deemed exports” of ITAR-controlled technical data.

Finally, note that the ITAR includes a list of countries that are subject to U.S. arms embargoes.  The State Department maintains a general policy of denying license applications for exports of ITAR-controlled items to the proscribed countries.  The list of ITAR proscribed countries is available at http://www.pmddtc.state.gov/embargoed_countries/.

Additional information and guidance regarding the ITAR is available on DDTC’s website at http://www.pmddtc.state.gov/.  In addition, the full text of the ITAR (22 C.F.R. Parts 120 to 130), including the USML, is available at http://www.pmddtc.state.gov/regulations_laws/itar.html.

Exclusions from Export Regulations

Generally speaking, the following items and categories of information do not require an export license:

  • Fundamental research: Fundamental research is defined to mean “basic and applied research” in science and engineering where the resulting information is ordinarily shared broadly within the scientific community.
  • Published (publicly available) Information and Software: Information that is published and is generally accessible to the public through publication in books or periodicals available in a public library or in bookstores, or information that is presented at a conference, meeting, seminar, trade show or other open gathering is considered to be in the public domain.  An open gathering is one in which members of the general public are eligible to attend and attendees are permitted to take notes.
  • Published Educational Information: Most of the course material taught in U.S. universities that is published in the course catalog and open to the public is considered public and not subject to the export control regulations.
  • Laptops and other mobile devices:  You can bring your laptop, as long as it does not contain any export-controlled documents or non-commercial, special purpose encryption software.  If the laptop contains only the commercial encryption software that is standard for the computer, then you do not have an export controls issue (unless traveling to an OFAC-sanctioned country).  If you have something other than standard commercial encryption software on your laptop or you are traveling to an OFAC-sanctioned country, do not bring it with you before consulting with Office of Compliance.

Personnel and Publication Restrictions

If the university or its researchers accept restrictions on publication of scientific and technical information resulting from the project or activity, or accept personnel restrictions on the basis of nationality, the research is covered by export controls regulations, and explicit authorization from the sponsor and federal government may be required before the results of the research are disclosed, or before foreign nationals are able to participate in the project.

There are certain scenarios where the university can accept limited restrictions on how research is conducted and disseminated.  First, the university is able to accept limited prepublication review requirements solely for the purpose of ensuring that proprietary information provided as “input” to enable the researcher to perform his or her research has not been inadvertently included in a publication, presentation, or other public disclosure.  Second, the university is able to accept requirements to identify the nationality of project personnel, as long as the sponsor does not have the ability to approve personnel on the basis of nationality.

If you become aware that a sponsor intends to restrict personnel or publication on a research project, contact the Office of Compliance for assistance.  For other types of activities that may raise export control considerations, please review Research That Requires a License.

Overseas Shipments

All overseas shipments constitute exports that are subject to the EAR or ITAR, and may require specific government authorization before hardware, software, or related technical data may be exported.  A “shipment” in this context includes both sending an item abroad using a freight forwarder such as FedEx or DHL, as well as personally taking an item with you on an overseas trip.  These rules apply in the research context even if the research is considered “fundamental”, because the fundamental research exclusion only protects the ability to freely share the results of research in publications and presentations.  The exclusion does not include shipments of materials, items, technology, or software generated in the course of fundamental research.

Keep in mind that if commercial items are not specifically identified in the EAR, they fall into a “basket” category known as “EAR 99.”  This basket category includes a wide range of common items, such as pencils, Band-Aids, automobiles and household appliances.  EAR 99 items generally can be exported without a prior license from the Commerce Department, except to OFAC-sanctioned countries, entities and individuals.  (Click on OFAC link or call the Office of Compliance to determine whether a particular country, entity, or individual is sanctioned).

The export regulations are complex and often difficult to interpret.  All USC employees who intend to travel internationally should follow this guidance and also download and complete the International Travel Checklist found at the International Travel link.  If you intend to ship an item overseas, consult with the Office of Compliance before doing so.

Research that Requires a License

FAQ’s

What are exports?

Exports are any items (e.g., commodities, software, technology) sent from the U.S. to a foreign destination.  Exports include the release of restricted technology or data (orally or in writing) to foreign nationals inside the U.S. — these are called “deemed” exports, because such releases are considered to be exports to the country where the foreign national is a citizen, regardless of the fact that the foreign national is in the United States at the time the disclosure is made.

What is a “deemed export”?

A “deemed export” is a release of technology or software source code to a foreign national that is deemed to be an export under applicable export control laws to the foreign national’s home country.  Such deemed exports occur through the disclosure of controlled technical data or software source code to a foreign national in the United States or abroad.  Deemed exports are subject to the same licensing requirements and restrictions as actual exports.

Find Additional information and FAQs relating to deemed exports is available on the Commerce Department website.

What are export controls?

Export controls are federal laws that regulate the export of sensitive technologies, equipment, software, biological agents and related data and services.  There are two sets of export control regulations that are most frequently encountered in the context of university research.  The Commerce Department regulates exports of commercial items with potential military applications (so called “dual-use” items) under the Export Administration Regulations (“EAR”).  The State Department regulates exports of items and services specifically designed for military applications under the International Traffic in Arms Regulations (“ITAR”).

These laws require that licenses be obtained for exports, including “deemed” exports, of these sensitive items (e.g., defense articles, items with potential military applications, select agents) unless an exemption exists.

How do these laws apply to research at USC?

Export control laws must always be followed, regardless of sponsor or the nature of the research.  However, fundamental research is not subject to the license requirements of export control regulations.  Fundamental research is defined as basic or applied research in science or engineering at an accredited institution of higher learning in the U.S. where the output of the research may be freely shared with the scientific community, and where there are no restrictions on participation in the research based on nationality.

What is “fundamental research”?

Fundamental research is defined as basic and applied research in science and engineering conducted at an accredited U.S. institution of higher education where the resulting information is ordinarily published and shared broadly within the scientific community.  Such research can be distinguished from proprietary research, the results of which ordinarily are restricted for proprietary reasons or specific national security reasons.  Research conducted by scientists, engineers or students at a university normally will be considered fundamental research.

Information that qualifies as “fundamental research” is not subject to export control regulations.  USC is committed to the widest possible public dissemination of scientific learning and research results.  Therefore, the vast majority of research conducted at USC is considered to be fundamental research, and not subject to the export control regulations.

Why should I be concerned with export control compliance?

Individuals who violate export regulations are subject to civil and criminal sanctions (including fines and/or prison sentences for individuals), and universities and research institutions are subject to administrative sanctions (monetary fines and loss of research funding and export privileges).  The International Emergency Economic Powers Enhancement Act of 2007 has provisions which increase civil penalties for violations of the EAR from $50,000 per violation to the greater of $250,000 or twice the amount of the transaction.  The act also allows for criminal penalties of up to $1 million and 20 years imprisonment.

When is research at USC not considered to be “fundamental research”?

University research will not be deemed to qualify as fundamental research if:

  • The university accepts any restrictions on the publication of the information resulting from the research
  • The university accepts any nationality restrictions on who may participate in the research

If research does not qualify as fundamental research, it is subject to export controls regulations, and an analysis must be undertaken to determine if export licenses must be obtained before foreign nationals may participate, or before research output is shared.

Are there any other reasons why information is not subject to export control regulations?

Yes.  If information has already been published or is within the public domain, it is not subject to export control regulations.  Information is “published” or within the “public domain” when it becomes generally accessible to the public in any form, including:

  • publication in periodicals, books, print, electronic or other media available for general distribution (including websites that provide free uncontrolled access) or for distribution to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline
  • readily available at libraries open to the public
  • patents and published patent applications available at any patent office
  • release at an open conference, meeting, seminar, trade show or other open gathering.

Therefore, if you are provided information to support research activity and that information is already in the public domain, it is not subject to export control regulations and may be disseminated freely without considering possible export licensing requirements.

If you are uncertain whether certain information is considered public domain information under export control regulations, contact the Office of Compliance at (213) 740-8258 or compliance@usc.edu for assistance.

What are trade sanctions regulations, and how do they relate to export control regulations?

The Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade sanctions against targeted countries on the basis of foreign policy and national security reasons.  The sanctions applicable to a particular country vary significantly, but usually include restrictions on imports, exports, investment, facilitation of foreign transactions and travel.

Sanctions regulations apply regardless of the fundamental research exemption.  Current listings of the countries subject to these sanctions may be found on the Department of Treasury website (OFAC currently administers sanctions against the following countries, among others: Belarus, Burma, Cuba, Iran, Ivory Coast, Liberia, North Korea, Sudan, Syria and Zimbabwe.  However, the list is subject to change at any time).

In addition, OFAC administers sanctions against designated entities and individuals found by the U.S. government to be agents of the sanctioned countries, terrorism sponsoring organizations, international narcotics traffickers, weapons proliferators or otherwise engaged in activities that threaten the security of the United States.  These entities and individuals generally are identified on the List of Specially Designated Nationals (the “SDN List”).  Virtually all transactions with these entities and individuals are prohibited.

Please contact the USC Office of Compliance before engaging in any activity involving the sanctioned countries, entities or individuals referenced above.

What other considerations should USC employees be aware of when transferring or transporting research materials, software or data?

The following is a list of some of the types of activities where USC employees need to be aware of applicable legal requirements:

  • Research materials an employee intends to ship or hand-carry abroad
  • Transfer of research materials, software, biological materials or data sets from abroad to the United States
  • Commercial shipment of hazardous materials
  • International travel to support university activity, including research

Please contact the Office of Compliance if you intend to travel abroad in support of USC activity, or if you intend to transport research materials, software, or data.

What are some grant/contract clauses to look for that carry export control ramifications?

The Department of Contracts and Grants works to identify sponsored agreements with provisions that may carry export control ramifications, and to negotiate these provisions out of the applicable agreement whenever possible.  That said, investigators and other research personnel can play an important role in identifying problematic clauses.  Examples of some of these clauses include:

  • “The parties acknowledge that the subject of this agreement may be subject to ITAR, EAR and/or other export control regulations as mandated by Federal law.  University agrees to indemnify, defend and hold Sponsor harmless from any and all suits, damages or other liabilities resulting from the violation of such regulations.”
  • DFAR 252.204-7000, Disclosure of Information
    “(a) The Contractor shall not release to anyone outside the Contractor’s organization any unclassified information…”
  • FAR 52.227-17, Rights in Data – Special Works
    “…(d) Release and use restrictions.  Except as otherwise specifically provided for in this contract, the Contractor shall not use for purposes other than the performance of this contract, nor shall the Contractor release, reproduce, distribute, or publish any data first produced in the performance of this contract, nor authorize others to do so, without written permission of the Contracting Officer…”

I have another question that was not answered.  What do I do now?

Contact the Office of Compliance at (213) 740-8258 or compliance@usc.edu.