Export Classifications: What is it, and How?
The U.S. export regulations identify controlled technology by publishing control lists:
In order to understand what export restrictions apply to your technology, you must first determine which regulation(s) may apply. This is called the “export classification” process. Once you determine the export classification for your technology, you can proceed to the next step of determining if an export license or authorization is needed prior to exporting your commodity outside the U.S., or sharing your technology with foreign nationals .
There are two primary methods for obtaining an export classification: obtaining a vendor classification (preferred), or conducting one’s own self-classification (see below).
1. Preferred Method (for commercial technology): Vendor Classification. Start by requesting the export control classification from the manufacturer/vendor — typically they have the most knowledge about the technology of the item.
Email the vendor’s sales department as follows:
“We plan on procuring one of your products (insert model name and number here) and I need to determine export licensing requirements. What is the export classification of your product. Please provide the ECCN or USML category.”
Note on Foreign Vendors and Small Businesses — Foreign vendors will not be familiar with U.S. export regulations and smaller U.S. businesses may or may not conduct business internationally. However, it is still worth asking the question in case they do. If they do not, proceed to the secondary method below.
2. Secondary Method: Self-Classification. This involves the scientist, engineer, or researcher with expertise in the applicable technology working in conjunction with the Export Compliance Office reviewing the applicable export regulations and determining the accurate classification.
For Biological Items the scientist, engineer or researcher should complete the Self-Classification Questionnaire for Biological Items and forward it to exportcontrol.lbl.gov for the next steps.
For all other tangible or technical items the scientist, engineer or researcher should complete the Export Classification Questionnaire for Non-Biological Items and forward it to exportcontrol.lbl.gov for the next steps.
What is a Deemed Export?
Deemed exports are exports of technical data or source code to foreign nationals here in the US. An export of technology or source code is “deemed” to take place when it is released to a foreign national within the US. A deemed export can also occur when technology is transferred to a foreign national by allowing use of controlled equipment that meets the “use technology ” threshold.
- Open labs that expose export controlled technology (“visual access” = export for ITAR)
- Lab notes, user manuals, software code, technical diagrams, or “know-how” that is not publicly available or fundamental research .
- Participation in research or meetings involving export controlled technology
Basically, any transfer of non-public technical data or software (written, visual, or audio) to a foreign national in the U.S.
As defined under the ITAR, 22 C.F.R. § 120.17, Deemed Export means: “Releasing or otherwise transferring ‘technical data’ to a foreign person in the United States.”
As defined under the EAR, 15 C.F.R. § 734.13, Deemed Export means: “Releasing or otherwise transferring ‘technology’ or source code (but not object code)1 to a foreign person in the United States.”
1 “Software” is defined as “a collection of one or more ‘programs’ or ‘microprograms’ fixed in any tangible medium of expression,” and “Source Code (or source language)” is defined as “a convenient expression of one or more processes that may be turned by a programming system into equipment executable form (‘object code’ (or object language)).” 15 C.F.R. § 772
Fundamental Research Exclusion (FRE)
The Fundamental Research Exclusion (FRE) provides that technology (meaning “technical data”) or software that arises during, or results from, fundamental research and is intended to be published is excluded from the export control regulations.
The FRE does not apply to all LBNL activities.
The exclusion for fundamental research from export controls applies to technical data only,
- When conducting fundamental research,
- With the intent to publish the results, AND
- You have accepted no publication/dissemination or access restrictions (i.e. your project is not subject to publication approval by sponsors or the government, nor have you accepted citizenship-based restrictions on who may be included on the research team).
“Fundamental Research” — NSDD 189, National Policy on the Transfer of Scientific, Technical and Engineering Information, defines fundamental research as: “… basic and applied research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community, as distinguished from proprietary research and from industrial development, design, production, and product utilization, the results of which ordinarily are restricted for proprietary or national security reasons.”
As defined under the ITAR, 22 C.F.R. § 120.11(8), Fundamental Research means: “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:
(i) The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity, or
(ii) The research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.”
As defined under the EAR, 15 C.F.R. § 734.8(c), Fundamental Research means: “research in science, engineering, or mathematics, the results of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons.”
Special Rules for Cuba, Iran, North Korea and Syria
The OFAC regulations pertaining to transactions with these countries vary by country. These regulations address not only export, but a much broader spectrum of activity (e.g., funding or providing a service) that OFAC restricts absent specific license approval.
For example, the Cuba sanctions regulate personal travel to Cuba as well as professional research activity conducted with Cuba institutions here and abroad. That said, the Cuba regulations allow for a broad range of research and humanitarian related activity when approved by license from OFAC.
The Iran regulations, on the other hand, do not regulate individual tourist travel to Iran, but remain highly restricted as to any activity, research or otherwise, which OFAC defines as a “service” to Iran. While certain kinds of collaborative research activity are permissible with Iranian institutions, to the extent such research contemplates the exchange of material items with Iran, or providing advice on establishing a laboratory or research facility in Iran, a license may be required. Likewise, peer review or editorial comment that extends beyond the scope of what is normally defined as credential input or scientific journal editorial review may likewise trigger a license requirement.
With respect to North Korea, U.S. Persons are generally prohibited from engaging in transactions with them without prior government authorization.
With respect to Syria, because of the geopolitical instability in the country, transactions with Syria likewise must be evaluated carefully for evolving sanctions and requirements.
Hence, when contemplating any research or transactional activity with one of these OFAC countries or foreign nationals known to reside in these countries, contact the Export Control Liaison for your division/functional area or Berkeley Lab’s Export Control Administrator for assistance before proceeding.
For more information, visit the OFAC FAQs.
What are the Penalties for Export Violations
Failing to obtain the necessary authorization (either license or license exception) prior to “export”, or engaging in prohibited export controlled activity, is an export violation and subject to severe criminal and civil penalties for both the institution and the individual who authorized the violating activity. In addition to the penalties listed below, individuals and/or the Lab may be subject to debarment and revocation of export privileges.
ITAR: maximum criminal penalty of $1 million per violation and, for an individual person, up to 10 years imprisonment. In addition, munitions violations can result in the imposition of a maximum civil fine of $500,000 per violation of the ITAR, as well as debarment from exporting defense articles or services.
EAR: For dual-use export control violations, criminal penalties can reach a maximum of $1,000,000 per violation and, for an individual person, up to 20 years imprisonment. Dual-use violations can also be subject to civil fines up to $300,000 per violation, as well as denial of export privileges.
It should be noted that in many enforcement cases, both criminal and civil penalties are imposed.
What Sorts of Things are Export Controlled
- Equipment, instruments, tools, prototypes, or “components” of the foregoing.
- Materials: raw or finished, organic or inorganic.
- Software, source and object code (does not include open-source)
- Technology (i.e. Technical Data in any form)
Below are links to the actual “control lists” maintained by federal agencies: