Export Control

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Red Flag Indicators in Export Transactions

The following are some indicators (red flags) that a buyer of your products may not be authorized to receive them due to Export Administration Regulations (EAR) or International Traffic in Arms Regulations (ITAR).  If there are red flags, you need to exercise due diligence to inquire regarding the suspicious circumstances and ensure appropriate end-use, end-user, or ultimate country of destination.  If the red flags cannot be explained or justified and you proceed with the transaction, you run the risk of violating EAR or ITAR.

  •   Purchasing agent is reluctant to offer information about the end-use of the products.               
  •   The buyer is unfamiliar with the product’s performance characteristics, but still wants the product.  
  •   The product’s capabilities do not fit the buyer’s line of business.
  •   The item ordered is incompatible with the technical level of the country to which it is to be shipped.
  •   Deliveries are requested to out of the way destinations.
  •   Delivery dates are vague.
  •   A freight forwarding firm is the listed as the products final destination.                      
  •   The shipping route is abnormal for the product and destination.
  •   Packaging is inconsistent with the stated method of shipment or destination.
  •   The buyer requests to pay cash for specific parts, or wants to pay cash for an expensive item when the terms of sale normally call for financing.
  •   The buyer has little or no business background.
  •   Routine installation, training, or maintenance services are declined by the buyer.
  •   The buyer is evasive when questioned about whether the parts are for domestic use or re-export.    
  •   The company is less than five years old.         
  •   The buyer or their address is similar to one of the parties found on a US government’s list of denied persons.

Employees need to be aware of regulations and compliance issues, and should not “self-blind” themselves by not asking for end-user information.  This does not insulate a company from liability and may be considered an aggravating factor in an enforcement proceeding.

Review lists of prohibited countries and organizations (e.g. Denied Persons List, Entity List, Debarred List, Unverified List, etc.), which can be found on the following websites along with other useful information. 

www.export.gov (Multi-agency website)

www.bis.doc.gov (Bureau of Industry and Security, US Department of Commerce)

www.pmddtc.state.gov/compliance/documents/compliance_programs.pdf (US State Department)

www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx (Office of Foreign Assets Control, US Department of Treasury)

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An Introduction to U.S. Export Law. Published by U.S. Dept. of Commerce, Bureau of Industry and Security.

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UMass Export Control Compliance Program Policy & Guidelines

Procedure for Dealing with Restrictions to Open Research

 

Review relevant document (e.g., Request for Proposal or Request for Application, draft research agreement, draft Material Transfer Agreement).

Upon receipt of these documents, research administrators in the Office of Grant and Contract Administration (OGCA) or the University of Massachusetts Innovation Institute (UMII) review the document for clauses that:

A. Constrain the University from disclosing:

a. the existence of the contract or grant;

b. the identity of the sponsor or the grantor and, if a subcontract is involved, the identity of the prime contractor; and

c. the purpose and the scope of the proposed research in sufficient detail:

i. to permit informal discussion concerning the wisdom of such research within the University; and

ii. to inform colleagues in immediate and related disciplines of the nature and importance of the potential contribution to the disciplines involved

B. Limit the ability to disseminate fully and promptly the results of the research or specifically permit retroactive classification (other than standard clauses found in federal contract templates that are not germane to the research).

C. Restrict who can participate in the research project.

 

Determine whether research is "proprietary" or "restricted."

If research administrators find restrictive clauses, they will work with the Office of Research Compliance (ORC) export control staff to determine whether the clauses fit into the "proprietary" or "restricted" categories:

Proprietary research: Industrially-sponsored research that uses the sponsor's proprietary information or results in intellectual property for which the sponsor has an option to an exclusive license. These sponsors often request restrictions on who can discuss the research and under what circumstances. They also may prohibit publication of confidential company information or ask the researcher to delay publication of research results so that they can review the material for proprietary information or take steps to secure intellectual property rights to possible inventions.

The University accepts "proprietary" research agreements that do not restrict who can work on the project and do not request unreasonable (>12 months) publication delays. Agreements containing other restrictions fall under the definition of "restricted" research.

Restricted research: Research that is restricted in who can work on the project or how and when the researchers can discuss the results of the project. This type of research includes projects that are labeled as "sensitive but unclassified" by the sponsor.

Principal investigators seeking to conduct restricted research must request an exemption from the Openness in Research policy through the Office of Research Compliance (ORC) and approved by the Vice Chancellor for Research and Engagement (VCRE).  Under expanded authority delegated by the University of Massachusetts President's Office (UMPO) to the Amherst campus, the VCRE is empowered to accept certain restricted research under the auspices of the UMII and with the technical assistance of ORC.  NOTE: The University will not accept government classified research (i.e., "secret" or "top secret").

 

If the research falls within the definition of restricted research, the research administrator refers the matter to the Office of Research Compliance (ORC) for analysis, technology control plans and to assist the principal investigator with the process of seeking an exemption to openness.

 

Negotiate to remove or amend restrictive clauses.

OGCA or UMII research administrators, with guidance and assistance from ORC as appropriate, will attempt to negotiate an agreement that is satisfactory to the potential sponsor and principal investigator, and in compliance with the University's policies and the principles of academic freedom.

 

Refuse the contract or request an exemption

If the sponsor does not agree to remove the restrictions, the principal investigator may opt to decline the award or to seek an exemption to Trustee policy requiring free and open dissemination of research results.

 

Initiate exemption Request.

The principal investigator must initiate the Exemption Request (Request for Exemption Form). This form facilitates the flow of information among the groups that will discuss and recommend approval or denial of the exemption request.

ORC will assist the principal investigator(s) in seeking the exemption.  To request an exemption, complete the steps below.  Note that sponsored research awards that deviate from standard policies, such as publication and dissemination norms, will be processed through UMII.

 

Complete the Request.

Within three business days for receiving the request, the directors of OGCA and ORC will complete their sections of the request documenting the circumstances and efforts made to negotiate more favorable terms and conditions as appropriate to the nature of the research.

 

Forward exemption request to the Open Research Committee.

ORC submits the exemption request to the office of the Vice Chancellor for Research and Engagement and assists the VCRE in convening an ad hoc advisory committee to evaluate it.  Typical composition of the ad hoc committee includes the department head/chair, the relevant dean and another "arm's length"dean, a Research Council member and Research and Engagement senior staff.

 

VCRE decision to grant or deny the exemption request.

Consistent with UMPO's delegation of authority, the VCRE makes the final decision, based upon the recommendations and input from the ad hoc advisory committee.  An affirmative decision by the VCRE will be predicated upon appropriate compliance protocols being initiated to mitigate any risks, including technology control plans or U.S. government licensing, if required.  Restricted agreements are processed under the auspices of UMII in accordance with the campus delegations received from the UMPO.

Reporting

The Office of Research Compliance tracks requests for exemptions and provides reporting to campus stakeholders and governance groups, including the Faculty Senate Research Council and other interested offices, as necessary.

 

 

* this procedure has been adapted from materials developed by the University of Minnesota for similar purposes

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To the Campus Community:

The Office of Research Compliance (ORC) maintains and implements UMass Amherst's policies and procedures regarding U.S. export controls. This memo reintroduces those policies and procedures, identifies recent changes thereto, and provides basic background information about export controls.

Export controls are U.S. laws and regulations that restrict the release of critical technologies, information, and services to foreign nationals, within and outside of the United States, and foreign countries for reasons of foreign policy and national security. These laws and regulations, which include international sanctions programs, also restrict activities within certain countries and with designated institutions, entities, and individuals, even if no controlled items are involved.

The term “export” is defined broadly within U.S. export controls and includes, but is not limited to, releasing identified items and information to foreign nationals within the U.S. UMass Amherst’s Export Controls Compliance Program Guidelines, training materials, resources, and guidance on the laws and regulations are available on the ORC website.

It is the responsibility of all campus community members to be familiar with and adhere to the requirements of export control regulations. Individuals and institutions that violate federal regulations governing export-controlled activities may be subject to civil and criminal penalties that can include significant fines, jail terms, denial of export or research privileges, and debarment from government contracting.

Because of the broad scope of export-controlled items, which include, but are not limited to, equipment, software code, chemical and biological materials, and technical data, these laws and regulations apply to virtually all fields of science and engineering and restrict both physical shipments and electronic transmission of information. Further, country-specific sanctions programs apply regardless of research subject matter. Export control laws apply to all activities – not just sponsored research projects.

University of Massachusetts policy requires compliance with all U.S. export control laws and regulations, which apply to both researchers individually and their institutions. Therefore, all faculty, staff, graduate students, and undergraduates involved in export-controlled research are required to have training before beginning those projects. Further, it is strongly suggested that all community members involved in sponsored or international research take advantage of two export control training modules available through the CITI program:

  • Export Compliance for Researchers: Part I, and
  • Export Compliance and United States Sanctions Programs.

For more information see https://www.umass.edu/research/compliance/research-safety-and-security/export-control-training-program. Should you have questions, or to schedule training on the application of export controls to your research area, please contact the Office of Research Compliance at (413) 545-5283 or via email at rescomp@research.umass.edu.

Copyright 2018. University of Massachusetts Amherst

 

 

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