Fisher And Associates Blog Hero Image

Fischer & Associates News

International Campuses and Research: 10 Key Points for Managing Export Control Compliance

March 19, 2015

Academic and research campuses operating internationally present unique export compliance requirements and oversight challenges from the U.S. and foreign jurisdiction’s perspectives. Often, plans to create an international campus and/or specific research centers abroad are made without direct or proactive input by an Export Control Administrator. Nevertheless, at some point, the Export Administrator (or equivalent position) will likely be called upon to opine on and/or manage various issues associated with these types of programs.

Here are 10 essential framework questions and assessment points the Export Administrator should consider:

  1. Will the charter for the international campus remain exclusively academic or will it include export- sensitive research?
  • Research activities trigger a broad spectrum of compliance considerations, as noted herein. However, purely academic programs/campuses can trigger screening, classification and OFAC requirements (addressed in items 4 – 6 below). Campus leadership may benefit from proactive creation of a “white paper” addressing compliance issues associated with hosting or conducting export-sensitive research abroad in connection with international campus planning.
  1. Will there be a designated compliance person/team positioned at the international campus to handle a range of compliance functions on behalf of the US-located “home campus”?
  • If so, leverage this person/team for export control visibility purposes. Ideally, compliance responsibilities would be reflected in the person/team’s job description.
  • Create a checklist of items to inform this person/team about what data is needed and when. (Points covered herein may serve as a guide.)
  • If there is no designated compliance function abroad, assert early on to international campus planners (research and academic) that the Export Administrator will need to be involved at various levels.
  • Key message to campus leadership: export control violations can inadvertently occur abroad and trigger serious legal consequences.
  1. Will research programs generated by the U.S. campus but conducted jointly with the international campus satisfy the criteria for the Fundamental Research Exclusion (FRE)? Will research programs independently generated and conducted by the international campus (separate from the home campus) satisfy the FRE policy for U.S. export control purposes?
  • Know your researchers: try to identify all current and intended research programs to determine whether any programs concern export-sensitive disciplines (e.g. core sciences, space, marine, aviation, advanced materials analysis, etc.).
  • If the intention is to remain within the FRE, coordinate with your Sponsored Research Department how foreign campus-initiated projects will be proactively vetted for publication and/or citizenship restrictions. Determine how you will gain adequate and timely visibility, perhaps through the designated compliance function at the international campus.
  • Brief PIs working abroad (US-based and foreign campus-based) on the requirements of maintaining FRE status. This will likely involve a thorough understanding of how foreign research funding/sponsorship operates for purposes of vetting restrictions, and could signal the need to involve local Counsel for certain contract negotiations.
  • Alert PIs (US-based and foreign campus-based) as to what constitutes a “defense service” under ITAR Section 120.9, including the use of public domain information for specialized defense purposes.
  • Where the intention is to accept restricted-funded research either through the home or international campus, proactively establish the parameters for such work so that it does not compromise other research intended for publication.
  1. From an end user perspective, what institutions and individuals are the international campus/research teams partnering with, and what watch list screening and oversight protocols should apply to these sponsored and collaborative activities?
  • Even if the international campus does not host export sensitive research programs, the university may decide that it does not wish to engage with any restricted institutions or individuals otherwise engaged in academic pursuits or faculty exchange programs.
  • Screening is often best accomplished when the foreign-based compliance function is trained to use the campus screening tool and report results of concern back to the U.S. export control administrator. However, it can also be accomplished at the home campus with timely data inputs.
  • Training should address the implications of engaging with restricted entities versus non-restricted individuals associated with restricted entities.
  1. Does the Export Administrator have sufficient visibility to recognize and address other control requirements triggered by international campuses and activities?
  • Leveraging a trained international campus compliance function will illuminate these control requirements.
  • OFAC controls (particularly with respect to the disposition of U.S. commodities and U.S. person PIs functioning abroad.
  • Classification of technical data and/or instruments which originate in foreign jurisdictions but which migrate to the home campus, thereby potentially triggering U.S. export control jurisdiction.
  • Visitor access controls with respect to selected laboratories at the international campus (i.e. controlled laboratory situations).
  • Compliance with U.S Anti-boycott regulations
  1. Are laboratory/academic set-up plans from the home campus taking into account the following technical controls, typically implemented by the Export Administrator?
  • Classification of procured laboratory hardware/computers and software programs being transferred internationally to the foreign campus: this may be strictly for academic purposes and/or research programs.
  • IT solution(s) to prevent unintended access by international institution participants (faculty/staff/students) to secured servers at the home campus.
  • Clean lap-top policy for those traveling to the international campus who may store controlled data on their computers.
  1. Who is responsible for managing foreign jurisdiction trade controls?
  • While these requirements are typically driven from the international campus, even a seasoned compliance professional positioned there may not have specific expertise in these areas. In that case, external resources/consulting advice may be required.
  • Local country Import Registration requirements (including cryptography for China) on behalf of the international campus (or as arranged by the international campus).
  • Local country export control requirements and related shipping function.
  • Tax and VAT evaluation (including VAT exemption where applicable) on behalf of the international campus – – services and imports.
  • Medical and Epidemiological Research involving human subject.
  1. Who is responsible for providing Anti-corruption guidelines and briefing to faculty and staff operating internationally?
  • Without question, after export control, violating U.S. anti-corruption regulations poses the next most significant area of compliance exposure with respect to operating internationally. Consequently, it is essential that the home campus provide guidelines/briefings to U.S. and international staff operating on behalf of the U.S. institution.
  • Where General Counsel determines that it is not equipped to address this area, coordinate an effort to seek external assistance to provide the needed guidelines and briefing.
  1. IP Protection and Commercialization: it is likely that your institution will want to exercise some degree of protection over its generated inventions and intellectual property, whether this is the product of U.S. funded/generated research, or is the product of research generated internationally and/or involving the international campus.
  • Joint collaborations with international partners add a degree of complexity to IP controls. While IP protection clauses typically fall within General Counsel’s domain, several aspects (noted below) can trigger export control consideration. It is critical to address how the Export Administrator gains proactive visibility to these items.
  • Training the appropriate individuals at the international campus to alert the Export Administrator will be an important part of the solution.
  • Non-Disclosure Agreements (NDAs) through which PIs at the international campus receive export controlled information: for example, background information from a foreign entity to launch a research program or service project: how will a TCP be implemented?
  • Requests for pre-patent publication reviews to protect third party IP: will these get reviewed by Sponsored Research to ensure FRE status is not compromised?
  • Watch-list screening of commercialization partners: who are we licensing software or transferring assets to?
  • Migration of export controlled items/data back to the U.S. campus for further commercialization: for example, data/software/commodities received abroad during a research program that trigger ITAR controls once received in the U.S.
  1. Has the home campus established a Recordkeeping and Audit requirement with respect to research activities occurring at the international campus?
  • These requirements are commonly overlooked by compliance personnel positioned at the international campus (as they are largely focused on fiscal and other controls).
  • As soon as possible, establish recordkeeping and self-assessment procedures that give the Export Control Administrator has direct visibility.
  • Consider conducting annual trade audits or assessments at the international campus where export sensitive research is occurring. These can be accomplished internally or through external consulting resources who are well positioned to audit applicable foreign trade requirements and compliance with anti-corruption procedures.

Posted March 19th, 2015 | Corporate

Fischer & Associates