The Dangers of Ignoring Export Compliance for Universities

This February was a bad month for university researchers. Hundreds of UK academics are under suspicion of having violated export controls — and a US Ivy League university agreed to pay a fine for exporting pathogens without the correct licenses. In this QAD Precision Report, we look at export controls for universities.

This February, academics on both sides of the Atlantic experienced a wake-up call regarding the importance of export compliance.

On 2 February, the United States Department of Commerce’s Bureau of Industry and Security (BIS) announced it has reached a settlement with Princeton University. The university agreed to pay a $54,000 fine for alleged violations of the Export Administration Regulations (EAR).

BIS alleged that Princeton violated EAR when the university exported strains and recombinants of animal pathogens to foreign academic institutions. These pathogens require an export license, which Princeton did not obtain. 

In addition, BIS further alleged that the university had committed 37 violations of EAR. Princeton exported these goods to research institutions in countries such as Australia, Canada, China, Japan, the United Kingdom, as well as a number of European countries, amongst others. Most of these countries — with the exception of China — are close US allies.

A far more serious breach may have taken place in the United Kingdom. In early February, The Times reported that nearly 200 British academics are under investigation for violations of the Export Control Order 2008. 

HM Revenue and Customs is investigating the academics. It is thought that these academics may have inadvertently helped China build weapons of mass destruction. 

The academics are under investigation for sharing sensitive research in advanced military technology. This includes designs for aircraft, missiles and cyberweapons. If found guilty, the academics could face up to ten years in jail. 

Fundamental Research vs Export Controls

Most research conducted by US educational institutions is not subject to export control regulations. This is due to the “Fundamental Research Exclusion” (FRE). FRE applies to research that is published and shared with the academic community.

However, FRE does not mean that all academic research is exempt from export controls. Similar laws and regulations exist in the UK and the European Union. Most university research is exempt from export controls, especially if it is basic science or has been published.

Governments put export controls in place for certain academic disciplines. These include aerospace engineering, biological sciences, chemistry, nuclear physics and so forth. Given the nature of these disciplines, governments restrict access to this research due to national security concerns.

Furthermore, governments also restrict items that have both civilian and military applications —these are “dual use” goods.

Export controls do not only apply to physical items. Therefore, the regulations forbid the sharing of certain kinds of data or know-how too.

Understanding Exports

One issue perhaps is a lack of clarity over what exactly an export is. While most people understand that shipping an item overseas is an export, the term is much broader. 

An export can also refer to the electronic or telephonic transfer of information. Similarly, providing access to a database or other repository to a foreign national qualifies as export. Lastly, if you bring information with you into a foreign country on your laptop, an external drive or other means, that’s also an export.

In addition, academics in the US also have to abide by “deemed export” regulations. Under these laws, academics (and others) may not share sensitive technology or information with US-based foreign nationals. Academics outside the US, working with a US partner, must comply with deemed export rules as well. 

Deemed export laws can be a particular challenge for universities. Not only do universities have to comply with export controls when working with international institutions, they must also comply with deemed export rules. In many cases, students, post-doctoral researchers, and faculty members may be foreign nationals.

In the case of Princeton, the university sent controlled physical goods without the correct licenses. However, the UK academics are alleged to have committed a very different kind of export control violation — the sharing of information, not goods.

How Universities Ensure Compliance with Export Controls

It is important for a university to undertake a risk assessment vis-à-vis export regulations. A university that specializes in, for example, the arts, is as a consequence, likely to have less risk than one that undertakes biological research.

Secondly, it is important that the university clearly communicates with faculty and students about their, and the institution’s obligations, under the law. 

Thirdly, educational institutions should consider supporting university export control programs with technological solutions that prevent missteps from occurring.

Desktop shipping solutions have many benefits for universities. These include:

• Standardizing shipping across the institution

• Controlling costs

• Allowing universities to leverage volume discounts

• Cost center allocation to the correct grant, a research group or college

• Generating compliant carrier label and all shipping documentation

• Package tracking

• Proof of delivery

Most importantly, desktop shipping solutions can include compliance and license checks depending on the type of shipment, the ship-to destination, and so forth. As a result, students and faculty will not be able to ship goods until they have completed all necessary export control checks.

To find out how QAD Precision can help your educational institution, please contact us here.

Oh No You Didn’t! The Dangers of Ignoring Restricted Party Screening [Live Webinar] 

On Thursday 25 March 2021 at 3pm GMT /10am EST, QAD Precision is hosting a 30-minute webinar on the importance of restricted party screening. To register for the webinar, please click here.

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Further Reading

HIGHER EDUCATION, INTELLECTUAL PROPERTY AND EXPORT CONTROLS

THE IMPORTANCE OF COMPLIANCE WITH DEEMED EXPORT REGULATIONS

EXPORT COMPLIANCE IS NOT ENOUGH: INTEGRATED SHIPPING SOLUTIONS FOR UNIVERSITIES