Extraordinary Meeting 12 April 2013
Outcomes of the Strengthened Export Controls Steering Group – Extraordinary Meeting: 12 April 2013
- The Steering Group is mandated by the Minster for Defence to advise ‘whether the Defence Trade Controls Act 2012, the regulations and the implementation arrangements are not more restrictive than United States export control regulations in relation to university activities’.
- To develop this advice, the Steering Group met on 12 April 2013 with US Government regulators from the Department of State and Department of Commerce, and two knowledgeable export control practitioners from theUSuniversity and legal sectors.
- This meeting enabled the Steering Group to gain a greater understanding of the US system, including its practical application in the university context.
- While the Australian export control system only regulates transfers from a person inside Australia to a person outside Australia, US export controls regulate:
- transfers from a person inside the US to a person outside the US;
- transfers within the US where non-US persons are involved (as release of technology to a foreign national in the US is “deemed” to be an export to the home country of the foreign national);
- transfers outside the US from US to a non-US person; and
- the re-export of US origin goods and technology within or from countries outside the US.
- The US university representatives noted that managing “deemed” exports (transfers between US and non-US persons working together at US universities – 4ii above) is a significant issue for US universities. The Australian legislation does not restrict the transfer of controlled technology to a foreign person inAustralia.
- Also, US military and dual-use export controls are regulated by multiple departments, with their own control lists, policies and processes. The US is working towards a single licencing agency and control list as part of its export control reform agenda, as a longer term measure.
- These vast differences in the design of US and Australian export control systems mean that it is difficult to make a direct comparison of these systems and their relative impacts on universities. It is also important for each country to develop a system that meets its own particular requirements, with a focus on managing risk and regulatory burden through working closely with stakeholder advisory groups from affected sectors.
- The Steering Group did identify some specific areas for further investigation. Australia’s controls on publication appear more restrictive than the US dual-use publication controls, and the US system contains a greater number of exclusions and exemptions, both in terms of specific research exclusions and broader licence exemptions. The Steering Group will consider broader exemptions for dual-use technologies and a different approach to managing publication, drawing on the practice of other countries, including the US, and reflecting the specific circumstances of Australia’s university and industry sectors.
Research exemptions or exclusions
- The US has a fundamental research exclusion which at face value seems very broad. However, the fundamental research exclusion may only apply to an accredited institution of higher learning, and the rules governing the fundamental research exclusion are complex. For example, within US universities export control regulations might apply to fundamental research where there is:
- Use of equipment or materials enumerated in the Commerce Control List or International Traffic in Arms Regulations (US control lists);
- language in the request for proposal or award documents identifies export control restrictions;
- there are restrictions on publication or on who might participate;
- proprietary information is being used in the conduct of the research;
- presentations at closed conferences or meetings; or
- contracts with government sponsors funding research with potential military applications.
- The limitations on the use of the fundamental research exclusion illustrate the complexity of US export controls relating to research and how US export controls connect to other broader mechanisms that protect information such as classification of information or protection of corporate research or intellectual property.
- Through its pilot studies, the Steering Group will determine the impact of Australia’s new export controls on the university and research sectors, and may recommend that additional exemptions or exclusions be applied to reduce the burden on exporters of dual‑use technologies, particularly with regard to lower-risk activities. The intention would be to keep any exemptions or exclusions as clear and simple as possible, and to apply them across the board rather than limit them to specific sectors.
- The Steering Group noted that Australia appeared more restrictive in prohibiting the publication of controlled technology in comparison to the US. The USdual-use controls do not have a prohibition on publishing the design of or how to enhance a controlled technology on the Commerce Control List unless the research was performed under a government contract that restricts publication.
- While such publication is not subject to US dual-use controls, it may be subject to broader scrutiny as dual use research of concern. For example, in 2012 the US Department of Health and Human Services sought expert advice from the National Science Advisory Board for Biosecurity to inform the US Government position on publication of research relating to the H5N1 virus.
- The National Health and Medical Research Council (NHMRC) is developing a supplement to the Australian Code for the Responsible Conduct of Research to consider dual use research of concern. The Steering Group agreed that this may be an appropriate alternative approach to managing publication of controlled technology and this could be tested through the pilot program. If successful the Group may consider the scope of the publications offence.
Institutional compliance frameworks
- The Steering Group noted that many US universities have well developed compliance frameworks. There is generally an area within the university that is responsible for compliance with export controls. These areas are relied upon by researchers to provide export control advice and assist with or submit export applications. They are also responsible for promoting export control compliance within the organisation.
- The Steering Group agreed there would be value in bringing people with experience of US best practice university compliance frameworks to Australia to share their experiences and lessons learned with the Steering Group and pilots.
- The Steering Group will, through its pilot program, consider broader exemptions or exclusions for dual-use technologies and an alternative approach to managing publications, for recommendation to Government.