The Importance of Compliance for Research Universities

Research universities are subject to many of the same controls as private enterprises. In this QAD Precision Report we look at how desktop shipping helps universities to mitigate costly compliance missteps.

Universities are at the cross-roads between public service and industry. On the one hand, a university’s core mission is to teach the next generation of entrepreneurs, business leaders, doctors, lawyers, journalists, scientists, and other professionals. On the other hand, many of the innovations that we use every day began life as university start ups.

The intellectual property a university generates can include prototypes, computer code, living tissues, cells or other biological samples, research papers, and teaching materials to name a few. This IP can be extremely valuable, and some IP may be subject to export controls. This is particularly true if the research has a potential military application.

In addition to technology, research universities share many similarities with life sciences companies. Research materials and samples can be delicate, temperature-sensitive or hazardous. Again, these may be subject to export regulations or other restrictions. 

Universities ship highly diverse goods from living cells, technology, books, experimental drugs and athletic equipment. As a result, there can be a lack of clarity of where export controls apply or where exemptions, such as the Fundamental Research Exclusion, are applicable. As a result, different schools, departments or research laboratories may work independently and, in some cases, without enough oversight.  

What is the Fundamental Research Exclusion?

A university that is conducting research on technology that has military or other restricted dual use applications, must comply with regulations restricting the export of such technology. In the US, deemed export restrictions may also apply if the research team includes foreign nationals or if researchers are partnering with peers at overseas academic institutions.

However, under US law certain science and engineering research is exempt from export controls. This is the Fundamental Research Exclusion  or FRE.  It is important to note that FRE does not apply to all research a university may undertake. The research must meet a number of conditions, which are as follows:

• The research team or individual researcher must be conducting basic or applied research

• The research will publish the resulting information and share this broadly within the scientific community

• No restrictions apply to publication, including government restrictions, non-disclosure agreements, or sponsor-approval 

Another important consideration is that FRE only applies to publishable results — not to  inventions, technology or equipment. Therefore, research conducted in disciplines such as science, technology, engineering and mathematics, may overlap with export controlled technologies.

Export Controls Explained

Individual countries and political entities have different rules and regulations regarding exports. In the US, for example, export controls take into account goods or technologies that may impact national security or foreign policy. The European Union also has robust regulations regarding the export of military applications, dual-use goods and a number of technologies. All of this means that universities, like private enterprises, must take steps to ensure that researchers do not violate their obligations under the applicable law.

However, a crucial difference between industry and academia is that larger companies have both technological and staff resources to help them mitigate compliance missteps. Most researchers are not experts in trade compliance laws and export controls. Therefore, a university benefits by putting in place institution-wide controls to ensure staff and students comply with export controls when shipping research materials.

Ideally, universities need to integrate automated compliance checks with shipping. Consequently, staff and students cannot ship research materials or other goods without first completing compliance screening. This ensures that the shipment does not violate in-country regulations and export controls. This includes ensuring compliance with sanctions, government and international Denied Party Lists (DPLs) and licence controls. Furthermore, universities can ensure that all shipments comply with their own policies and procedures regarding the sharing of intellectual property.

Equally importantly, all researchers and university staff will not only have performed due diligence, the system will create an electronic audit trail to prove so. 

Sounds great, but how do you do it? The answer is desktop shipping software.

The Compliance Benefits of Desktop Shipping

As the name suggests, desktop shipping software allows users to create a shipment and complete compliance screening from a computer terminal. 

With desktop shipping, universities can configure compliance checks depending on the type of shipment. After all, sending athletic equipment domestically before a big game is very different to shipping an experimental drug to a research partner at an overseas institution. Therefore, a comprehensive desktop shipping solution gives universities the tools to maintain an ongoing and effective compliance program for both  inbound or outbound goods, whether they ship domestically, internationally or both. As a result, universities perform due diligence with in-country regulatory programs and cross-border export requirements. 

International shipping requirements are subject to change. Import tariffs, packaging specifications, customs rules and compliance regulations are not static, but most university shippers are not experts in the rules pertaining to international shipping. Nevertheless, they must comply with these regulations. Furthermore, missing or incorrect documentation will result in your shipment delays. Customs authorities may impose fines, but even worse, sensitive samples may degrade or become useless should they not reach their destination in a timely manner.

Desktop shipping software automates carrier compliant labeling, generates appropriate shipping documents for global destinations and enables electronic customs reporting.  A best-in-class desktop shipping solution will ensure that all of the documents required are in the correct format and  presented at the right time. This will include international, regulatory and multilingual documentation, plus the correct documents for shipping hazmat and/or dangerous goods.

Three Further Benefits of Desktop Shipping

As you can see from the above, desktop shipping allows universities to ensure ongoing compliance with international shipping regulations and export controls. There are also other significant benefits to desktop shipping. We will list these here.

MULTI CARRIER SHIPPING

Desktop shipping software  gives universities access to a multi carrier network of parcel shippers, both domestic and global. As a result, universities can add smaller, regional or specialist carriers to their list of transportation partners, but still ship in the same way from the central desktop shipping solution. 

Muli carrier shipping can allow universities to make significant cost savings. For example, both Europe and Asia have hundreds of specialist and local carriers that may offer better rates, routes and services, particularly in certain countries or regions. 

With multi carrier shipping, users are able to seamlessly switch between carriers and service levels. When presented with an option for a lower cost service level that meets the shipment requirements, most users consistently choose this option, resulting in lower overall costs by not choosing unnecessary premium services.

VOLUME DISCOUNTS

Many large universities have hundreds of carrier accounts, split between different campuses, schools, labs and facilities. As a result, there is no leverage to  negotiate for volume discounts. In fact, many institutions simply have no visibility into how many parcels they ship annually because this data is split across so many different accounts. With desktop shipping, the university can centralize these accounts and negotiate more favorable rates based on volume.  

COST CENTER ALLOCATION

Desktop shipping software makes it easy to allocate shipments to the correct cost center — whether that is a grant, a research group or college. A further benefit is that this reduces the number of carrier invoices that must be manually processed and paid. This saves significant administrative costs and time. 

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About QAD Precision – Trusted Global Trade and Transportation Execution

QAD Precision, a division of QAD Inc., provides industry-leading global trade compliance, and multi carrier transportation execution solutions from a single, integrated platform. An ISO-certified company, QAD Precision assists companies to streamline their import, export and transportation operations, optimize deliveries, and increase logistics ROI. QAD Precision’s scalable and extensible solution easily integrates with existing ERP and WMS solutions. Industry leaders in every region of the world rely on QAD Precision’s global support centers to leverage thousands of carrier services and manage millions of global trade and shipping transactions every day. For more information about QAD Precision, visit www.qadprecision.com.