Universities Should Implement Internal Control Programs to Monitor Compliance with Export Control Laws

Article excerpt


Colleges and universities often do not pay much attention to export control laws, erroneously believing that the fundamental research exception covers all research performed at universities. However, in this post-9/11 world, the government has started looking at compliance by universities in the export control arena. Defending the university from allegations of violating these laws would tangle the university in a morass of laws and regulations that few understand, are better to avoid, and are costly and tine-consuming to defend against. A cost-effective solution would be to implement an internal control program to ensure that the university is complying with its legal obligations and as documentation to quickly identify where the compliance broke down, if anywhere. This paper briefly summarizes the main export control regulations relevant to universities, including the fundamental research exception, and discusses the steps a university should take in order to implement an internal compliance program.


Colleges and Universities often do not pay much attention to export control laws, which are perceived to be targeted at large corporations and because the fundamental research exception excludes most higher education research. However, export control laws do not exclude all higher education research and it would behoove the institutions of higher education to verify that their policies and procedures comply with these laws. This is especially true in the post-9/11 world where the government seeks to prevent terrorist groups such as al Queada and "rogue nations" such as North Korea from acquiring technical information that could be used to build nuclear, chemical, or biological weapons. The government has started looking at compliance by universities and colleges in the export control arena. In fact, one agency with export control regulations, the Department of Commerce, stated that one of their priorities for 2005 is to look into compliance by universities.1 Allegations of violating export control laws would tangle the college or university in morasses of laws and regulations that few understand, are better to avoid, and are costly and time-consuming to defend against.

This article will first briefly describe the background of export control laws, and outline the issues relevant to universities.2 Then, this paper will discuss the two main agencies which regulate export control laws and detail the fundamental research exception. Finally, this paper will detail some of the procedures universities should take to ensure that they comply with the export control laws.


A. Overview of Export Control Laws

The U.S. uses export control laws as one tool in its national security arsenal. These laws are decentralized,3 meaning that over ten federal agencies have export control regulations. A non-comprehensive list of agencies is: the Departments of Commerce, State, Treasury, Interior, and Energy; the Food and Drug Administration; the Nuclear Regulatory Commission; Federal Maritime Commission; and the U.S. Maritime Administration.4 One reason for this decentralization is the wide variety of materials which are the province of these agencies that are capable of being exported.

The two agencies with export control laws most relevant to universities are the Bureau of Industry and Security (BIS) (formerly the Bureau of Export Administration (BXA)) in the Department of Commerce, and the Directorate of Defense Trade Controls (DDTC) (formerly the Office of Defense Trade Controls) in the Department of State. The BIS export control regulations are called the Export Administration Regulation (EAR);5 while the DDTC export control regulations are called the International Traffic in Arms Regulations (ITAR).6 This article will focus on the EAR and the ITAR.

Competing with national security concerns are the American desires for freedom of markets and intellectual freedom. …


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