The Bureau of Industry and Security (BIS) has released guidance on improving academia research export compliance programs. This guidance is based on recent trends in Voluntary Self-Disclosures conducted by academic institutions where Export Administration Regulations (EAR) violations occurred .
Voluntary Self-Disclosures
A Voluntary Self-Disclosure (VSD) is conducted when an organization recognizes that violations or suspected violations of United States export regulations have occurred. It is the responsibility of the organization to report such findings in a timely and transparent manner to the appropriate federal agency. The three major sets of U.S. regulations for export compliance are, the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), and the Office of Foreign Assets Control (OFAC).
The BIS encourages voluntary disclosures of potential violations of the EAR. When these disclosures are conducted in a timely and comprehensive manner with full cooperation, the BIS will substantially reduce civil penalties. This includes cases where controlled items, technology, have been transferred or transactions that have involved boycott violations.
Unauthorized Export of Biohazards
Several unauthorized exports of biohazards have occurred at universities due to a lack of knowledge of specific requirements of export control requirements detailed in the Commerce Control List. A variety of microorganisms and toxins were thus exported including Dengue-2 virus, pseudorabies virus strains and genetically modified viruses.
Unauthorized Export to Parties on Entity List
Genetic materials and modified organisms were exported along with an element commonly used in nuclear reactor control rods to parties on the Entity List. The Entity List is a list of parties ( persons, entities, and governments) for which trade restrictions are in place.
Deemed Export Violations
Academic institutions disclosed that unauthorized releases of EAR controlled technologies had occurred in the areas of aerospace propulsion, telecommunications, and electronics. Analysis of the incidents pointed to a lack of awareness of deemed export regulations and insufficient controls.
Temporary Imports, Export, Reexports, and Transfers
Two voluntary self-disclosures involved improper use of TMP licenses involving the hand-carrying of infrared cameras out of country. TMP licensed are used for temporary imports, exports, reexports of controlled items and have a limit of one year before which, the article must be returned. Again analysis showed a lack of understanding regarding the use of TMP licenses.
Electronic Export Information
A number of academic institutions reported that they had failed to file exports in the Automated Export System and had listed values of exports below actual cost. A lack of documented procedures and insufficient training were cited as causes for the incident.
Recordkeeping
Three incidents involved failure to maintain accurate records of exports. Export records are to be maintained for a minimum of five years though seven years is often recommended as a conservative measure. Insufficient training on the importance of recordkeeping practices was cited as the cause of the violations.
The Importance of Proper Training
Regular training is a requirement by the Directorate of Defense Trade Controls (DDTC) and the BIS for all persons involved in an export compliance program. Export compliance is not just the responsibility of a few team members. In order to avoid violations of export regulations, every individual having access to or involved in the export of a regulated article or technology must aware of these regulations and their responsibility to adhere to them.
CVG Strategy Export Compliance Management Programs
The BIS guidance on academia research export compliance illustrates the increasingly dynamic nature of export regulations. Organizations involved in export activities must therefore develop more substantive export compliance programs Keeping in step with these changes.
Failure to comply with regulations can result in criminal prosecution including imprisonment and fines. It can also result in civil penalties and disbarment from export activities. Aggravating factors for export enforcement include the lack of a documented and executed export compliance management program.
CVG Strategy can help you in understanding the International Traffic in Arms Regulations (ITAR) and the EAR, and help you establish a coherent and effective export compliance program. We can perform export control classifications, perform audits, assist in filings for export licenses and educate your team. Regardless of whether your business falls under EAR or ITAR, CVG Strategy has the expertise to help you develop robust solutions.