Please visit: http://www.aaei.org/ for more details

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"MK Data helps make my company more efficient because of its accuracy it helps from me from sending things to companies who have not agreed to our policies and it's quick and efficient. When I go to place an order it takes less than 10 seconds to get a response from MK Denial which allows me to quickly get to the next customer which means they don't have to wait and we don't take a chance of losing the customer by having them on hold. It's also easy to navigate through just point and click and you can set it up how you need it to work. It's a great system and very important to my day to day work!"

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"I have taken MK Data Services with me for the last 15 years to four different companies. MK Data has functioned in the best possible manner with the least waste of my time and effort. The tools and team at MK Data have exceeded my expectations not only with the on-line training, but also by providing awesome service!"

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"We run every order through MK Denial. It gives us peace of mind that we are checking to make sure that we are not selling to someone that we should not be. We try hard to screen our customers. We don't ever want our products to be used by the wrong people."

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"MK Data helps our Company as we can search our customers/suppliers status at the moment we are imputing cadastral data. As we are a global Company, this tool is essential. This means we don´t lose time to search for the situation of our customers/suppliers around the world and more important, we are confident that we are not making business with non-acceptable customers/suppliers."

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"MK helps us by eliminating organizations which is a threat to our Society & Government. MK helps us a lot as "We strictly do not do any business with Terrorist Organizations, Scam/Hoax Companies, etc." Our customers are located Globally and Increasing on a day to day basis, life gets easier (Thanks to MK), One Site to keep a tab on our New Customers!

When it comes to Companies located in the Middle East and other countries that are strictly monitored, MK helps use the most, as we do not have any source that can help us directly.

We would like to thank you for all the Service provided and the Updates!"

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"The services provided and data generated give me peace of mind to proceed with projects that in sensitive geographical and issue areas. When red flags are raised by MK Data, I also get a clear idea of why the concern exists, and that provides a sound basis for exploring workable alternatives."

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"Because your system is SO easy to use, we have probably saved hundreds of hours in waiting time from our previous vendor. This means our apps get approved faster, and orders go out the door faster."

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"It is vital to have a screening tool that provides fast and reliable results to be able to be in compliant with Export Control Regulations. MK Data delivers consistent, reliable results helping our company and people maintain 100% compliance to ITC Regulation."

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"MK Data provides a one-stop site for all our compliance needs whether it be current denied parties searching or ensuring that our regulations are up to date."

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"My department handles Due Diligence, and I am the person who is doing it most of the time. We use MK Denial as one of the devices to assist us for background search. It is user friendly and definitely effective."

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"We are able to do a quick background check on all clients that will enter into our building for training. The speed of this service is especially helpful when we have last minute attendees who show up unexpectedly and need to make it to training on time. This keeps them happy and our great customer service is uncompromised!"

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"MK Data helps ensure my company is being compliant with export requirements regarding denied parties. The search is for several of the Govt. provided lists. I enjoy being able to screen via all of those. This makes my search very efficient and effective. It would take hours to look at each individually.

Thank you."

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"MK Data saves us a lot of time by compiling all denied parties into a great search engine. We have subscribed to the MK Data's Denial List for at least 15 years and are very pleased with it."

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"I use the MK Denial Data to screen our potential customers and end users to ensure we are able to do business with them. Without the MK Data I would be lost! It's very important and it gives our business piece of mind. Thank you."

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"It brings sanity in doing business globally."

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"A large portion of our customer orders are electronic fed to our production system and therefore are not seen by our staff until the product is ready for shipment. By screening through integration with MK Data we are able to eliminate that manual step at the end of the line and reduce the bottleneck at distribution."

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"MK Data provides us with the tools for both automated and manual trade compliance screening functions, saving us time and money through automation and still allowing us a deep dive into the details on a manual basis. It's a must for any company performing sanctioned party screening."

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"We use 'MK Denial' countless times each day. We use it to screen clients, we look up regulations, we search for ECCN's, and many other uses. We also avail ourselves of MK training opportunities such as audio conferences. We subscribe to Export Practitioner. We switched to MK from another vendor, and are glad we did!"

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"The denial screening is the best in the industry and we use it around the world to make sure we are in compliance with the various lists that exist around the world. We are in 23 countries, 35 locations around the world and this system works best for us. We do use the manual web based system because to implement the automation through Oracle and SAP would be cost prohibited for our large company. We are very satisfied with this system and have gotten our sister companies to join in just recently."

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"Provide data used for systematic screening and ability to do secondary manual screening."

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"MK Data is the tool that we use for screenings our client/customers. So it is very helpful to the company because in here we can see if a client is with good record in USA / EUROPE / ASIA & MIDDLE-EAST or in any part of the world.
It is very efficient and effective because you will only input the clients name and country then the results will be viewed. It is time saving, less effort to use as it is a web-based tool that we can use in any computer or laptops. The user must only need internet connection plus the user name & password to use this application."

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"It keeps us out of jail! Seriously, it helps us to make sure that customers we sell to are not on the restricted or denied list and we sleep better at night knowing we have done our due diligence in keeping our company's interests secure. Thank you."

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"The fewer people I have to throw into the penalty box for export/import escapes, the better we can operate. MK Data is so simple to use that everyone actually ENJOYS screening their customers, suppliers, visitors, and transactions! (Well, ENJOYS might be a bit of a stretch, but easy to use means it gets done)."

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"My company exports a lot of technical data to customers and suppliers all over the world. MK Data allow the company to easily check to make sure the recipients of this data are authorised to have it. This is a crucial part of keeping our company competitive."

The email survey garnered almost 400 responses from MK Data Services customers. Almost 93 percent of customers reported that they are exceptionally satisfied with both the products they use and the customer service they receive. A majority of these respondents use MK Data Services' web based tools.

"We are helping these customers manage their global supply chain operations, which is vitally important to their success," said Ken Harris, managing partner of MK Data Services. "We are pleased with these survey results, and plan to carefully consider all feedback received from it so we can continue to improve our products and services."

Customers reported that products from MK Data Services make them more efficient in their jobs and that the tools are simple to use, especially for customer screening. Respondents also indicated that MK Data Services makes them feel confident that they are in compliance with regulations, and that it helps them know their customers better. Others said that they were satisfied with the accurate content and that it helped them make informed decisions.

To enter, ICPA members can submit a jingle, Haiku, poem, paragraph, referral, video or quote that describes why CiGDM/MK Data Services rock their compliance/Global Trade Management (GTM) world. The contest winner will receive an all-expenses paid trip, including first-class airfare (first-class round trip ticket from mainland U.S. to Hawaii), a six night stay at the conference hotel and if conference fees apply, CiGDM/MK Data Services will cover these fees as well.

Entrants will be judged on two criteria:

• Creativity - Who explains CiGDM/MK Data Services in the most creative way?
• Originality - Who has the most original submission?

The award will be presented during the ICPA 2012 Conference in Atlanta, GA. All finalists will be invited to attend the CiGDM/MK Data Services dinner award ceremony during the Atlanta conference - date and venue to be determined.

Supporting Resources and Ideas for Submissions

Video examples:

• http://www.xtranormal.com/watch/7494193/john-in-compliance-how-to-talk-with-your-cfo

·         http://www.youtube.com/watch?v=GbquORZoHB4

MK Data announced its Weak Aliases Screening Protection (WASP) assists customers in eliminating troublesome records from the screening equation. Earlier in the year, OFAC announced guidelines on expectations concerning SDN "Weak" aliases.

"In addition to subscribing to data listings, Citrix also subscribes to MK Data's Web Services for screening new online records," said Michael Martin, Global Trade Compliance Coordinator, Citrix. "We found many portal compliance needs were best met by MK Data's Web Services."

Additional highlights:

• Added Method GetLogs to retrieve user's logs programmatically
• GetEntry can now retrieve DPL, GL or Premium list entries
• Search requests now include:
  • A user defined reference for tracking the search in the logs
  • A specification of the maximum number of hits returned
  • The ability to exclude weak aliases
  • The search report returned now includes:
    • A boolean indicating if the maximum number of hits was reached
    • A boolean on each entry indicating if it is considered a weak alias
    • Code details, if requested, now include the source country

Supporting Resources:

• Weak Aliases Screening Protection (WASP)
• MK Denial Web Service v3 documentation

Jeannette Chu currently serves as the Senior Policy Advisor to the Assistant Secretary of Commerce for Export Administration, Bureau of Industry and Security where she works on a broad range of national security and foreign policy issues including export control reform.

From 2005 through 2010 Ms. Chu represented the Bureau of Industry and Security as the Senior Export Control Attaché at the U.S. Embassy Beijing. She established the U.S.-China High Technology and Strategic Trade Working Group under the Joint Commission on Commerce and Trade and successfully negotiated an agreement with the Chinese government to expand U.S. government inspections at Chinese companies receiving controlled items from U.S. exporters. Ms. Chu also conducted 250 risk assessments at manufacturing and research facilities in 19 provinces in China, providing information critical to processing U.S. export licenses for controlled items. She also provided regular training to Consular Officers on technology transfer risk assessments.

Ms. Chu served as a Senior Special Agent with the Immigration and Naturalization Service (INS) from 1991 through 2005. She was the first immigration officer to be posted to China, opening the INS office at the American Consulate General Guangzhou (Canton, China), in 1997 and serving as the Officer-in-Charge of that office until 2000 when she became the Immigration Attaché/Officer-in-Charge of the INS office at the American Embassy Beijing. Ms. Chu established and directed the world's largest political asylee and orphan adoption processing centers, negotiated the repatriation of Chinese nationals intercepted abroad and deported from the United States, and trained U.S. and foreign government officials on detecting fraudulent documents and malafide travelers from China.

Ms. Chu's government career spans more than thirty years across seven agencies, including 24 years spent as a federal criminal investigator and 13 years as an American diplomat in China. She received her B.A. in Political Science from American University in Washington, D.C. Ms. Chu is a frequent speaker on China and trade compliance issues. Visit http://www.mktechnology.com/ht/display/EventDetails/i/4866 for more details.

Where do we stand in the reform process and what are the stakes?

Given all the talk about changes in the export control system, you are probably asking yourself "why don't I just wait for the dust to settle in Washington before making any commitments, or spending any time or money, regarding my export control compliance program?"   Why is this time going to be any different from the abortive reform efforts under Presidents Clinton and Bush?

Many company officials complain that they have heard it all before:   promises of reform about changes in the manner in which State and Commerce administer the ITAR and the EAR, which turn out to have little real impact.

Under the previous administration, the underlying reform directive was actually classified and could not be released to the public.  By contrast, the Obama Administration has announced its intentions with speeches and Presidential declarations about the need for export control consolidation, reform, and simplification.  The only thing missing thus far has been measurable changes in the regulations and policies.  We have reached a point where any more talk  that is not followed by visible results could lead company executives to just sit on their hands and postpone any decisions to implement an internal compliance program or to upgrade an existing program.

If the government can't or won't do a better job telling companies where the "risk" is in overseas markets, how are they expected to do on their own? Are some markets more risky than others?

Overlapping and extensive lists of problem entities complied by State, Commerce, Treasury and other agencies are not user-friendly, especially for small and medium-sized companies.  The announced export control proposal outlined by the Administration has pigeonholed countries into specific lists or tiers.  But it is not clear how the export control agencies are going to determine if a particular item or transaction presents more risk than another item to a different country in a different tier.  Reform proposals now being considered in the inter-agency process will have to address this problem and provide clear guidance.

What is the role of Congress in this reform effort?  If Congress fails to take action, will the reform effort slow or even stop?

This time around, the Administration has organized the export control reform process into three distinct phases, with only the third and final phase requiring legislative action. The first phase would create a new regulatory framework.  The second would implement the new export control framework within existing legislative constraints, while the third phase (requiring legislation) would merge agencies, export control lists, and enforcement authorities.  In the end, we could look forward to a brave new world of a consolidated, single export control agency, with a single list, a single application, and a single enforcement authority.  We are years away from such a mega-agency, but companies may yet see real changes in the way that export controls are conducted within the next year.  That is why it is important to stay abreast of each new development in the Obama Administration export control reform effort.

On December 15^th we will be holding a Webinar to review the current status of reform efforts and assess if the Administration "really mean it this time around" and what your company needs to do in the current environment.

Please click here for more information

Visitors, contractors and employees are enrolled in Jolly's Lobby Track System through a fast passport or driver's license scan.  Lobby Track logs the registration, checks the visitor against MK Data Services watch lists and potential matches are presented should they occur.  Email notifications can be sent immediately to designated security personnel and authorities.  The Lobby Track system keeps a record of each visitor, logs each entry and issues visually expiring visitor passes.

MK Data's denied parties list sources include: U.S. Department of Commerce Unverified/Red Flagged List; European Union Sanctions List; United Nations Security Council Sanctions List; Japanese METI List; UK WMD List; Canadian Restricted Entities List; Australian Consolidated List; World Bank Debarred/Ineligible List; Swiss Restricted List; and FBI Most Wanted Lists - among others.

"Compliance with federal trade regulations through visitor screening has been a growing request from our Fortune 500 customers" said Kurt Bell, VP Sales and Marketing for Jolly Technologies. "We're very pleased to have chosen MK Data Systems to deliver this service.  Their comprehensive list not only strengthens our Fortune 500 position, but also provides solutions for foreign multinational corporations seeking trade compliance."

"We like how seamlessly Jolly has integrated our denied party screening into their visitor registration process," said, Ken Harris, Managing Partner for MK Data Services. "The receptionist scans a credential to register a visitor. The information is immediately transferred to our online service; We return the results which are displayed on their monitor within seconds.  It's an excellent example of how to integrate our web service with 3^rd party developed solutions."

The integration is supported in Lobby Track version 5.02.  New free trial downloads of Lobby Track version 5.02 may be found at www.jollytech.com and are available to dealers in Jolly Technologies' Partner Zone.

About MK Data Services
Founded in 1991 MK Data Services has built a reputation and gained acclaim as a company that provides exceptional customer service, top-notch solutions and the best business value in the industry.  Its mission is to provide the services and solutions necessary to ensure clients are protected and compliant with all of the necessary laws and regulations.  MK Data Services is based in Columbia, Maryland. For more information, visit www.mkdataservices.com or call 1-410-992-3282.

About Jolly Technologies
Jolly Technologies, founded in 2000, develops and distributes a suite of secure identification software products, including ID Flow, the world's #1 identification software, Lobby Track visitor/entry tracking software, access control software, and a variety of other custom security products. As the recognized leader in the rapidly growing secure identification market, Jolly Technologies is partnered with the industry's largest hardware manufacturers to offer complete solutions through our channel partners. Based in San Carlos, California, Jolly Technologies is one of the world's fastest growing software companies. For more information, visit www.jollytech.com or call toll-free 1-888-25-JOLLY.

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© 2010 Jolly Inc. All rights reserved. All other trademarks are the property of their respective owners.

Why is classifying encryption so difficult? It's not just because encryption is complicated and technical. It's because the fundamental reasons for controlling encryption are at odds with the very nature of today's encryption. The controlling regulations are in place ostensibly to comply with the Wassenaar Arrangement of 1996, and to give our government (literally) insight to domestic encryption. But today encryption is ubiquitous. It is in practically everything digital that we use today; Bluetooth headsets, printers, cell phones and PDA's, and even refrigerators. It is everywhere, and the government has been struggling to keep up with the overwhelming volume of Encryption Review Requests. That and President Obama's export reform initiative have resulted in the June 25th encryption controls changes, and the "optimization" of the Category 5 Part II negative list. It is this "negative list" that causes the "heavy lifting" in encryption classification. The hard part is not figuring out what constitutes "robust" encryption; the hard part is figuring out what is NOT robust encryption. 

There are a total of eleven (11) Notes in Category 5 Part II of the CCL that exclude certain encryption items from classification in Category 5 Part II, or from classification under 5A002, which are subsequently classified under 5A992 instead. If you would like to learn more about encryption classification, I will be holding a Webinar on November 18th from 2:00 PM to 3:30 PM (EST) where I will provide an overview of encryption classification, its unique aspects in terms of U.S. export controls, prevailing regulatory interpretations, and approaches to risk management for compliance managers advising businesses. 

To learn more about my upcoming Webinar Encryption Classification: What You Need to Know click here.

Export controls are one of the principal means we use to defend our nation’s high technology advantage over potential adversaries.  It has been 22 years since the last major re-write of the Export Administration Act (“EAA”), the legislation that provides the basic authority for the President to control exports, and in that time our practices have become ineffective and redundant. If we do not reform and update our export control system, we will not only lose competitiveness internationally, we will also endanger our national security.

During the Cold War, working with our allies, export controls successfully isolated the Soviet Union and denied or at least delayed its acquisition of the high technology necessary to strengthen its military.

However, with the end of the Cold War, there is no longer unanimity among the Western allies about the nature of the threats we face. Nor is there any longer a U.S. veto that can be wielded when we disagree with our allies. Our current export control forum, the Wassenaar Group, is mostly concerned with keeping dangerous technology out of the hands of terrorists and rogue states.  The East-West targeting has been replaced with an emphasis on North-South conflict.

However, many potential adversaries do not fit the profile of the Wassenaar Group.  For example, China and Russia are certainly not rogue states. Nevertheless, the U.S. Government retains a restrictive licensing policy towards them. Russia is still not one of the top markets for U.S. exports, but China is, and the U.S. Government is consistently more limiting than its European allies with regard to licenses for products and technologies destined for markets like China.  Delays combined with foreign availability of products have meant lost business for U.S. firms and trade frictions with China. In a world with multiple sources of technology, it is almost impossible to limit the technology flow into China. The support of all high tech countries is necessary in today's world, and the U.S. Government's shift from a multilateral to a unilateral approach has not denied the Chinese key high technology products.

To take but one example, China is the largest and fastest growing machine tool market in the world. The U.S. still tightly licenses five-axis machine tools, because they are considered to be the most sophisticated. These licenses can take from six months to a year to gain government approval.  The Swiss, Germans, and Italians license products with identical capabilities in weeks.  Over the past decade the U.S. has lost 50 percent of its share in this fast-gowning market. At the same time, the domestic U.S. market has shrunk by 50 percent.

Similar problems occur in semiconductor manufacturing equipment and scientific instruments. Without the cooperation -- indeed, the enthusiastic support -- of our allies, the current export control system does not work.  It costs American jobs and does not accomplish its objectives.

We may view China as a potential threat, but many of our allies do not.  We may seek to isolate it from the highest levels of technology, but our allies are ready to supply most of the products and technology that are requested. 

We do have reasons to limit the export of our technology. There are nations who mean us harm. A strengthening of their power could adversely affect the strategic balance. So, the issue is, then, how we can have a working export control system that also receives multilateral support?

President Obama has made reform of the export control system a priority in his agenda.  The Obama Administration has declared that it intends to undertake a dramatic reorganization of the export control structure, and it has just issued a number of regulatory reforms regarding the way in which we administer export controls.  These reforms simplify the organization of export controls and provide a better definition which items belong on the military-oriented Munitions List and which items ought to be treated as dual-use (or principally civilian) technologies.  The new regulations are the first fruits of a review process that has been taking place at the President's request over the past year.  The ultimate objective is to improve national security by speeding up licensing time and shortening the list of controlled products that require an individual validated license.  This is the strategy of "higher fences around fewer products", which should lead to a system that is both more efficient and more capable of the protecting the items that remain under the purview of the export control system.

These reforms are a good first step.  Export controls can be made more relevant and effective if they are made more targeted and administered more efficiently.  It also makes sense to consolidate the IT system and coordinate enforcement across agencies, as the President proposes.  But more needs to be done, either by the Congress, or the Congress in concert with the Administration:

1.    We need a better defined purpose for export controls – in harmony with our allies if possible.  China is a particular problem.  We currently have what amounts to unilateral controls to China that accomplish nothing strategically but do antagonize the Chinese and deprive US companies of a rich market for their high tech goods.  Either the controls have to be made multilateral, or they need to be adjusted to the point where they are more realistic.

2.    We need to clarify to our allies why it is in their interest to support export controls, even if individual countries might prefer not to.  Japan and Australia recognize the potential strategic threat that China poses, but the Europeans tend to see China simply and overwhelmingly as a rich market – period.  It will be a tall order to change that perception, but our China policy will be ineffectual otherwise.

3.    We need to broaden the list of countries to which we have few or no controls.  Today we waste valuable time and resources licensing goods and technology to our closest allies.  The currently pending Australian and United Kingdom defense cooperation treaties would go a long way toward accomplishing the goal of refining and targeting our licensing system, yet they have been languishing for years awaiting Congressional approval.

4.    There must be a major restructuring of the ways in which we conduct export controls.  Today there are seemingly endless inter-agency debates and needless delays before many licenses are approved.  A major goal of the Obama Administration reform effort is to clarify the control definitions and the jurisdictional lines between control agencies.  It is a worthwhile undertaking.  For my part, I do not believe that we need a single agency to accomplish export efficiency and focus.  We do, however, need to have clear lines and definitions among the agencies.  Moreover, Congress does not seem to be in a mood to grant broad powers to the President to reorganize the entire system, but I am convinced that Congress would applaud a system that was reformed to the point where licenses moved swiftly through a bureaucracy that was streamlined and clear in its lines of jurisdiction.

Our national security and our economic interests demand that we treat export control reform as a priority.  We cannot afford to go still more years without addressing this issue.  But the question remains whether there is the political will to complete the job.

___________________________

Paul Freedenberg served as Under Secretary of Commerce for Export Administration under President Reagan and is Chairman of MK Technology in Washington, D.C.

The report assesses how nine companies see themselves as implementing their own best practices. It does so through a series of carefully structured interviews with 29 of their key export managers and executives providing the first effort at updating the 2000 landmark Nunn-Wolfowitz Report The companies shared views confidentially with MKT and not with each other or with Thales. To read this exclusive white paper click here.

The world post 9/11 is undeniably a very different place for research universities and colleges. The level of risk and potential exposure that research universities and colleges face has increased dramatically, and the penalties associated with noncompliance range from mild to severe. In November of 2001 the Bush Administration reaffirmed that National Security Decision Directive (NSDD) 189 remains in effect. This directive establishes national policy for controlling the flow of science, technolgy, and engineering information produced in federally funded fundamental research at colleges, universities, and laboratories. Fundamental research is defined as follows:

"Fundamental research means 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."

The tragic events of 9/11 only served to heighten security concerns and as there is a renewed interest in ensuring that the existing laws and regulations are enforced as strictly as possible. One of the challenges that research universities and colleges face today is understanding the legal basis for export controls in order to ensure that they are in compliance. The Case for Compliance Several recent high-profile cases have highlighted the need for universities and colleges engaged in research related activities to tighten their compliance controls and establish safeguards for the institutions and its staff members. Among the recent cases that highlight the need for tighter controls is the case of John Reece Roth, 71, a prominent plasma physicist who was sentenced to four years in prison for 18 counts of conspiracy, wire fraud and violations of the Arms Export Control Act, after he allowed a Chinese graduate student to see sensitive information on unmanned aerial vehicles (UAVs), also known as drones.

Roth, a retired professor at the University of Tennessee, helped found the university spin-off, Atmospheric Glow Technologies in 2000. The company won $10 million dollars in government grants to develop a radio-frequency technology to create ionized gas, or plasma, for use in a wide variety of applications, including sterilizing medical devices. In 2004, the company received a U.S. Air Force contract to develop a plasma actuator that could help reduce drag on the wings of drones, such as the ones the military uses. Under the contract, Roth was prohibited from sharing sensitive data with foreign nationals. According to the information released at trial, in 2006, Roth took a laptop containing sensitive plans with him on a lecture tour in China without gaining the proper export controls. Roth also allowed graduate students Xin Dai of China and Sirous Nourgostar of Iran to work on the project, both students are foreign nationals, which violated his contract.

Cases such as this are increasingly being prosecuted and the regulatory environment is both stiffening and becoming more ambiguous. Understanding what constitutes compliance, how to become compliant and to reduce risk is paramount for any university or college engaged in research activities.

Understanding Export Controls

As you can imagine the laws, rules and regulations regarding US export controls can be daunting and wading through all of the applicable laws, rules and regulations can be a complex and time-consuming undertaking. Many research universities and colleges today employ compliance experts and have compliance officers in addition to access to a variety of services and solutions that help the institution remain in compliance with the applicable laws, rules and regulations regarding the export of information or goods deemed to important to our national interests. For the layman it is important to understand the basis for export controls, which can be found in the following:

• The Export Administration Act of 1969
• Export Administration Regulations (EAR)
• 15 CFR §§730-774
• Arms Export Control Act of 1976
• International Traffic in Arms Regulations (ITAR)
• 22 CFR §§120-130

Digging into either the EAA, EAR, AECA or ITAR to fully understand the basis for export controls would take a significant investment in time, which is why we have outlined the following primer on export controls.

The Export Administration Act

The Export Administration Act (EAA) is the statutory authority for the Export Administration Regulations (EAR), which are administered by the Bureau of Industry and Security (BIS)[See Reference 1] located in the Department of Commerce.  These regulations establish the framework for regulating exports of dual-use, potentially sensitive commodities, software, computers, and technology.

Exports are restricted by item, country, and recipient entity. The EAA, which was written and amended during the Cold War, focuses on the regulation of exports of those civilian goods and technology that have military applications (dual-use items).  Export controls under the EAA were based on strategic relationships, threats to U.S. national security, international business practices, and commercial technologies many of which have changed dramatically in the last 20 years.

What is important to understand is that the EAA has consistently evolved and become increasingly complex particularly post 9/11. Among the changes to the EEA include legislation passed by the House and Senate and signed by the President on November 13, 2000 (P.L. 106-508) extended the EAA of 1979 until August 20, 2001, temporarily removing the need to operate the export control system under International Emergency Economic Powers Act (IEEPA) powers. Since then, export control authority has again been operating under IEEPA provisions pursuant to Executive Order 13222, issued August 17, 2001. The plethora of changes and provisions to the EAA are mind numbing, the important takeaway is that research universities and colleges need to be aware of the potential implications of non-compliance.

Under EAA the penalties associated with export control violations range the gamut from mild to severe. Criminal violations of the export controls can include fines up to $1M, or 5X the value of export, whichever larger, per violation and up to 10 years in federal prison. The penalties for civil violations of export controls are also significant and can include fines up to $120K per violation and the loss of export privileges. The reality is that new legislation is always being proposed to revise the penalty structure and increase penalties for export control violations. There are no anticipated changes in the regulatory environment that will change the nature of EAA compliance for research universities and colleges, compliance is not only mandatory it is essential to maintaining the institutions ability to engage in federally funded research activities.

The Arms Export Control Act & ITAR

Like EAA, the Arms Export Control Act of 1976 is complex and offers a variety of challenges for research universities and colleges regardless of whether they are conducting federally funded research for the United States Department of Defense (DOD) or not. The International Traffic in Arms Regulations (ITAR) implemented provisions of the AECC, described in Title 22 (Foreign Relations), Chapter I (Department of State), Subchapter M of the Code of Federal Regulations. Delving into the AEC or ITAR in depth would take a great deal of time, what is important to understand is that the goal of ITAR is to safeguard US national security and to further US foreign policy objectives, and is enforced by the United States Department of State. As you may have guessed by now, AECA and ITAR are complex and unfortunately somewhat ambiguous, which creates challenges for research universities and colleges.

Among the ambiguities are the definition of “defense services,” and its nexus to the sharing of data already in the public domain, whether information is in the public domain only if it has already been published or if it is in the public domain if there is an intent to publish, and ITAR’s limitation of the definition of fundamental research such that it only covers work conducted at a university. There are important differences in some key definitions between ITAR and the Export Administration Regulations, which are important to understand including the following:

• Under EAR, research at federally funded research and development centers and research conducted by scientists or engineers working for a business entity can be considered fundamental research if the other conditions for fundamental research are met. With that said, ITAR refers to research conducted only at “accredited institutions of higher learning.”
  
• The language of ITAR indicates that the fundamental research exclusion applies to information “which is published” and is generally accessible or available to the public. However, EAR exempts information that is publicly available, that is already published or will be published, or that arises during or results from fundamental research.
  
• EAR explains that no license is needed for classroom or laboratory teaching of foreign nationals in U.S. universities if the information is in the public domain. ITAR handles teaching by saying that “information concerning general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities, or information in the public domain” is excluded from the kinds of technical data that are subject to controls.
  
• An EAR exclusion is not lost when a university accepts a temporary delay of publication for prepublication review for proprietary or patent-protection purposes, but ITAR does not contain such language, and so whether this safe haven is available under ITAR is ambiguous.
  
• An EAR exclusion is not lost in a federally funded project when a university accepts specific national-security controls if controls are not violated in exporting the controlled information, but under ITAR the exclusion is lost in a federally funded project if such controls are accepted.
  
• A supplement to EAR provides extensive explanatory questions and answers regarding what is not subject to EAR in the context of university and research laboratory activities. There is no such elaboration in ITAR documents. 
  Conclusions

As you can quickly ascertain the laws, rules and regulations governing the export controls are complex and can be challenging to understand. Export controls are only part of the compliance challenges facing research universities and colleges today. Post 9/11 US based universities and colleges have to remain in compliance with the USA Patriot Act and other rules and regulations governed by the United States Department of Homeland Security. With that said, implementing policies, procedures and processes to protect the institution does not have to be complicated and or expensive. MK Data Services offers a variety of cost effective services and solutions that enable research universities and colleges to screen their staff, students, vendors and partners to determine quickly if a potential risk exists that requires further examination.

Specifically, MK Data Services provides a web-based denied parties screening solution, bulk screening services, automated batch screening services and a web-services based solution that can be integrated with the university or colleges existing legacy information technology solutions to provide a comprehensive compliance solution for the institution. MK Data Services provides compliance services and solutions to some of the nations premier research universities and colleges, to learn more about how MK Data Services can help your institution maintain compliance please contact us today.

References

The Export Administration Act of 1969, United States Government Printing Office, US Department of Commerce, Bureau of Industry and Security The Arms Export Control Act, US Department of State, Directorate of Trade Controls, http://www.state.gov 

Tennessee physicist sentenced to 4 years for sharing drone plans with foreign students, 2009, Brendan Borrell, 60-Second Science Blog, http://www.scientificAmerican.com

CSR Report for Congress, The Export Administration Act: Evolution, Provisions, and Debate, 2008,Ian F. Fergusson, Specialist in International Trade and Finance, Foreign Affairs, Defense, and Trade Division, Congressional Research Service 

Space Science and the International Traffic in Arms Regulations: Summary of a Workshop, 2008, Margaret G. Finarelli, Rapporteur, Joseph K. Alexander, Rapporteur, National Research Council

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[1] This agency was known as the Bureau of Export Administration prior to April 2002.