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. However, in the university setting, 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.
Please review the FAQ’s below for additional guidance on export control regulations and the university’s process to ensure its researchers adhere to them.
Export Controls FAQ’s
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.
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 Culture, Ethics and Compliance at (213) 740-8258 or firstname.lastname@example.org for assistance.
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 certain types of research personnel restrictions based on nationality (except certain restrictions in the context of government-sponsored research)
- The university accepts certain types of publication restrictions, such as pre-approval rights over publications
The implications for these restrictions can be limited participation of students, limited participation of foreign nationals, limits on publication, and information security considerations (both physical and electronic). In such cases, OCEC must undertake an analysis to determine if export licenses must be obtained before foreign nationals may participate, or before research output is shared.
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:
- DFARS 252.204-7000 (Disclosure of Information)
“(a) The Contractor shall not release to anyone outside the Contractor’s organization any unclassified information…”
- DFARS 252.204-7012 (Safeguarding Covered Defense Information and Cyber Incident Reporting)
“(b) The Contractor shall provide adequate security on all covered contractor information systems… subject to the security requirements in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171”.
- DFARS 252.204-7019 (Notice of NIST SP 800-171; DoD Assessment Requirements)
“(b) If the Offeror is required to implement NIST SP 800-171, the Offeror shall have a current assessment (i.e., not more than 3 years old…) for each covered contractor information system”.
- DFARS 252.204-7020 (NIST SP 800-171; DoD Assessment Requirements)
“(b) Covered contractor information systems… are required to comply with the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, in accordance with Defense Federal Acquisition Regulation System (DFARS) clause at 252.204-7012”.
- DFARS 252.204-7021 (Cybersecurity Maturity Model Certification Requirements)
“(b) The Contractor shall have a current (i.e. not older than 3 years) CMMC certificate at the CMMC level required by this contract and maintain the CMMC certificate at the required level for the duration of the contract.”
What is the process for reviewing restricted projects at USC?
When projects with restrictions are identified by USC’s Department of Contracts and Grants (DCG) at the time of contracting, the steps that follow include:
- PI submits a request for exception application to request approval for conducting restricted research
- OCEC performs a review and analyzes whether it is feasible for research to proceed
- OCEC formulates a recommendation to a standing faculty committee that reviews the application and makes a decision on whether the project can proceed
- If the project can proceed, a management plan is implemented to ensure compliance with the export regulations
- OCEC monitors the project for compliance with the management plan
Find additional information about the process of requesting approval for conducting restricted research on our website: https://ooc.usc.edu/compliance-programs/international-activity/exception-request-to-conduct-restricted-research/
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 Culture, Ethics and 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 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: https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information (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 Culture, Ethics and Compliance before engaging in any activity involving the sanctioned countries, entities or individuals referenced above.
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 that 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.