Export Controls: Key Terms
These ‘key terms’ are taken from the ITAR, the EAR and other sources. The EAR contains a specific section entitled “Definitions of Terms” at 15 CFR 772. The ITAR contains a specific section entitled “Purpose and Definitions” at 22 CFR (ITAR Part 120).
“Basic Research” (22 CFR 125.4(c)(3)
Basic Research means a systemic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and observable facts without specific applications towards processes or products in mind. It does not include “Applied Research” (i.e., a systemic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met. It is a systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development and improvement of prototypes and new processes to meet specific requirements).
A laptop loaded only with the standard Microsoft or Mac operating suite and without any encryption software. Additionally, any files that may contain research that includes controlled technology (specific information necessary for the “development,” “production,” or “use” of a product. The information may take the form of ‘technical data’ or ‘technical assistance.’ “Controlled” technology is that which is listed on the Commerce Control List or the U.S. Munitions List) as defined by the Bureau of Industry and Security (BIS) would require a license to take abroad and should not be considered ‘clean.’
In addition to actual shipment of a commodity out of the country, the export regulations also control the transfer, release or disclosure to foreign persons in the United States of technical data about controlled commodities. The “deemed export” regulation states that a transfer of source code or “technology” (EAR term) or “technical data” (ITAR term) to the foreign person is “deemed” to be an export to the home country of the foreign person. This deemed export rule does not apply to persons lawfully admitted for permanent residence in the United States and does not apply to persons who are protected inpiduals under the Immigration and Naturalization Act (8 U.S.C.1324b(a)(3)). Accordingly, for all controlled commodities, a license or license exception is required prior to the transfer of “technology” or “technical data” about the controlled commodity to foreign persons inside the U.S.
The ITAR defines defense service as (1) The furnishing of assistance (including training) to foreign persons, whether in the U.S. or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; (2) The furnishing to foreign persons of any controlled technical data; and (3) Military training of foreign units and forces. A Technical Assistance Agreement would need to be put in place before transfer of ITAR controlled technical data to a foreign person.
Whether in the U.S. or abroad, the educational exclusions in EAR and ITAR cover instruction in science, math, and engineering taught in courses listed in catalogues and associated teaching laboratories of academic institutions, even if the information concerns controlled commodities or items. Dissertation research must meet the standards for "fundamental research" to qualify as "publicly available."
You retain effective control over an item when you either retain physical possession of the item, or secure the item in such an environment as a hotel safe, a bonded warehouse, or a locked or guarded exhibition facility.
Only U.S. persons (as defined in 120.15) and foreign governmental entities in the United States may be granted licenses or other approvals. Foreign persons other than governments are not eligible.
“Encryption Object Code”
Computer programs containing an encryption source code that has been compiled into a form of code that can be directly executed by a computer to perform an encryption function.
Computer programs that provide capability of encryption functions or confidentiality of information or information systems. Such software includes source code, object code, applications software, or system software.
“Encryption Source Code”
A precise set of operating instructions to a computer that, when compiled, allows for the execution of an encryption function on a computer.
Export means an actual shipment or transmission of items subject to the EAR out of the United States, or release of technology or software subject to the EAR to a foreign national in the United States. Release of export-controlled technology and source code can also occur through transmission via e-mails, faxes, designs, and verbal correspondence.
Under the ITAR regulations, export means not only sending or taking a defense article out of the U.S. in any manner, but also disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the U.S. or abroad. An export also means performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the U.S. or abroad.
The person in the United States who has the authority of a principal party in interest to determine and control the sending of items out of the U.S.
“Foreign National and Foreign Entity”
The term "foreign national" refers to everyone other than a US citizen, a permanent resident alien, & certain "protected inpiduals" (refugees and those with asylum); it includes any company not incorporated in the United States.
“Fundamental Research Exclusion (FRE)”
The export control regulations exempt from licensing requirements technical information (but not controlled items) resulting from "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. The Fundamental Research Exclusion (FRE) permits U.S. universities to allow foreign members of their communities (e.g., students, faculty, and visitors) to participate in research projects involving export-controlled technical information on campus in the U.S. without a deemed export license. Further, technical information resulting from fundamental research may be shared with foreign colleagues abroad and shipped out of the United States without securing a license.
Prepublication review by a sponsor of university research solely to ensure that the publication does not compromise patent rights or inadvertently pulge proprietary information that the sponsor has furnished to the researchers does not change the status of the research as fundamental research, so long as the review causes no more than a temporary delay in publication of the research results. However, if the sponsor will consider as part of its prepublication review whether it wants to hold the research results as trade secrets (even if the voluntary cooperation of the researcher would be needed for the company to do so), then the research would no longer qualify as "fundamental". As used in the export regulations, it is the actual and intended openness of research results that primarily determines whether the research counts as "fundamental" and not subject to the export regulations. University based research is not considered "fundamental research" if the university or its researchers accept (at the request, for example of an industrial sponsor) restrictions on publication of scientific and technical information resulting from the project.
Commodities, software, and technology.
An authorization described in part 740 of the EAR that allows export or re-export, under stated conditions, items subject to the EAR that otherwise would require a license. These License Exceptions are not applicable to exports under the licensing jurisdiction of agencies other than the Department of Commerce.
A natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization or group, including governmental entities.
“Public Domain” (22 CFR 120.11)
Means information which is published and which is generally accessible or available to the public:
- Through sales at newsstands and bookstores;
- Through subscriptions which are available without restriction to any inpidual who desires to obtain or purchase the published information;
- Through second class mailing privileges granted by the U.S. Government;
- At libraries open to the public or from which the public can obtain documents;
- Through patents available at any patent office;
- Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the U.S.;
- Through public release (i.e., unlimited distribution) in any form (e.g., not necessarily in published form) after approval by the cognizant U.S. government department or agency;
- Through fundamental research in science and engineering at accredited institutions of higher learning in the U.s. where the resulting information is ordinarily published and shared broadly in the scientific community. Fundamental research is defined to mean basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls.
University research will not be considered fundamental research if:
- The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity, or
- The research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.
Information is "published" (and therefore not subject to export controls) when it becomes generally accessible to the interested 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 to a community of persons interested in the subject matter, such as those in a scientific or engineering discipline, either free or at a price that does not exceed the cost of reproduction and distribution;
- readily available at libraries open to the public or at university libraries;
- patents and published patent applications available at any patent office; and
- release at an open conference, meeting, seminar, trade show, or other open gathering held in the U.S. (ITAR) or anywhere (EAR).
Note, a conference or gathering is "open" if all technically qualified members of the public are eligible to attend and attendees are permitted to take notes or otherwise make a personal record of the proceedings and presentations. A conference is considered open notwithstanding a registration fee reasonably related to cost, and there may be a limit on actual attendance as long as the selection is either 'first come' or selection based on relevant scientific or technical competence.
“Technology or Technical Data”
These phrases refer to technical information beyond general and basic marketing materials about a controlled commodity. They do not refer to the controlled equipment/commodity itself, or to the type of information contained in publicly available user manuals. Rather, the terms "technology" and "technical data" mean specific information necessary for the development, production, or use of a commodity, and usually takes the form of blueprints, drawings, photographs, plans, diagrams, models, formulae, tables, engineering specifications, and documentation. The "deemed export" rules apply to the transfer of such technical information to foreign nationals inside the U.S.
“Technology Control Plan (TCP)”
A TCP is simply a plan that outlines the procedures to secure controlled technology (e.g., technical information, data, materials, software, or hardware) from use and observation by unlicensed non-U.S. citizens.
The principal party in interest located abroad who receives the exported or re-exported items. The ultimate consignee is not a forwarding agent or other intermediary, but may be the end-user.
U.S. Person means a person who is a lawful permanent resident as defined by 8USC 1101(a)(20) or who is a protected inpidual as defined by *USC 1324(b)(3). It also means any corporation, business association, partnership, society, trust or any other entity, organization or group that is incorporated to do business in the U.S. It does not include any foreign person as defined at 120.16.
The routine "use" of controlled equipment by foreign nationals (e.g., using it in the ordinary way specified in the user manual, in such a manner that does not disclose technical information about the equipment beyond what is publicly available, does not require a license. However, a license may be required if a foreign national is "using" the equipment in such a way as to access technical information beyond what is publicly available (for example, accessing the source code of software or modifying a piece of equipment in such a way as to gain non-publicly available technical information about its design.)