Jurisdiction and Classification
Chicago’s tangible items such as laboratory instruments and materials, as well as software and technical data need to be classified prior to exportation to determine which control requirements apply to the item; in certain cases, laboratory access by certain foreign nationals for whom particular items are restricted, may also apply.
JURISDICTION DETERMINATION
Chicago must ensure that all “defense articles” (equipment, materials, technical data and software that appear on the United States Munitions List) are properly identified and treated as such. The process of determining whether an item is controlled as a defense article under the USML is called “jurisdictional determination,” because it is a process of determining whether they are controlled under the jurisdiction of the Department of State’s Directorate of Defense Trade Controls (DDTC’s), International Traffic in Arms Regulations (ITAR). This process is fundamental to Chicago’s export compliance program, as an ITAR determination governs licensing and authorization requirements for access by foreign nationals1 in our laboratories2 , as well as transfers and exports out of the country. Hence, Chicago requires that no item (equipment, material, technical data, or software) can be exported by any means, including access by foreign nationals within the U.S., until jurisdictional determination is confirmed.
The requirement to determine whether an item, in fact, meets the definition of a defense article may be triggered at numerous phases of the research process, from the earliest concept design stages. Many activities and functions such as Procurement, Human Resources, and IT, among others, are directly affected by this requirement. Therefore, all personnel thus affected must be aware of the jurisdiction determination process as assisted by the Export Control Administrator and remain aware of all locations where such items are being used or stored.
Note: in the event a clear jurisdictional determination cannot be made from the facts at hand (i.e., there is an ambiguity as to whether the item may be alternatively controlled by the Department of Commerce as “dual use” or not controlled at all), Chicago will apply for a Commodity Jurisdiction (“CJ”) from DDTC. A CJ is a letter to DDTC requesting that the agency opine on the proper jurisdiction of an item, i.e. whether it is covered under the USML (and if so, underwhich Category) or falls under Commerce Department control. CJs are potentially complex documents that require significant preparation, the results of which can have significant implications for Chicago’s current and future endeavors.
USML CATEGORIZATION
Once an item has been determined to fall under ITAR jurisdiction, its USML category must be identified. A defense article’s categorization has important implications for Chicago in terms of potential licensing requirements or export restrictions, so categorizations must be performed precisely. For example, an asterisk next to a category’s subparagraph denotes Significant Military Equipment (SME) which carries special licensing provisions and/or reporting.
ECCN CLASSIFICATION
Items which do not fall under ITAR jurisdiction are controlled by the Department of Commerce (DOC), Bureau of Industry and Security (BIS), under the Export Administration Regulations (EAR). These items require EAR classification prior to export.
EAR classification is the exercise of understanding where an item or technology falls in the Commerce Control List (CCL). The CCL describes “dual-use” items (those items that may be considered for commercial or military use.) A classification will determine whether an export license is required based on the destination of the item or technology. It is important to note that items purchased either “off-the-shelf” directly from a manufacturer, or by any other commercial means may be controlled under the EAR. Likewise, imported items (not withstanding foreign origin) could likewise be subject to EAR restrictions upon export out of the country.
Hence, Chicago requires proper export classification of EAR items to determine licensing requirements before any shipment or release is made. This also includes “deemed exports,” defined as access by foreign nationals under certain circumstances to controlled EAR data for development, production or use of an item, where such applications fall outside the normal fundamental research exclusion.
There are three ways to classify an item. Chicago may self-classify; use a classification provided by a manufacturer, if available/applicable; or seek a formal classification from BIS.
For self-classifications of items that are under the jurisdiction of BIS, the employee would locate an Export Classification Number (ECCN) on the CCL. The employee would first review categories 0 through 9 on the CCL which cover areas such as electronics, lasers, computers, sensors, aviation and marine applications, encryption, telecommunications, etc. Categories are then further divided into product groups A through E such as components, test equipment, materials, software, and technology. Once the category and product group have been determined, one may determine which ECCN heading and subheading will apply to the item by reviewing the characteristics of the item being classified. The ECCN will explain possible related export controls, possible license exceptions, and the reason for control. The reason for control in combination with the destination of the item will determine licensing requirements.
For assistance with Jurisdiction Determinations, ITAR Categorization, or EAR Classification, please contact the Export Control team at exportcontrol@lists.uchicago.edu or contact Julie DeVoe at juliedevoe@uchicago.edu.