GTM Best Practices

When most people think of export compliance, images of large multinational corporations come to mind. Universities are in the business of education and they don’t sell products, so why would a university need export compliance procedures?

Since 9/11, the U.S. government has become increasingly concerned with foreign nationals on student visas gaining access through research grants to sensitive information and technology. Because of increased scrutiny, one incentive is the cost of non-compliance. Penalties range from 5 to 10 years imprisonment and fines of $250,000 to $1,000,000. Additional costs include loss of contracts, grants, employees and other collaborative efforts. Some of the recent violations include:

• Professor convicted for allowing unauthorized foreign citizens access to restricted technology in violation of the Arms Export Control Act
• University fined for financial dealings with Iran and Cuba
• Universities cited for failure to obtain licenses for access by foreign nationals to military technology
• University involved in unauthorized export of biological materials

Knowledge is power. University of Tennessee faced its second count of export violation this year because its professors were unknowing violating export laws. Read more about this case from this Denied Party Screening blog.

Former University of Tennessee Professor John Reece Roth was recently sentenced  to 48 months in prison for violating the Arms Export Control Act.

U.S. District Judge Tom Varlan said UT professor emeritus J. Reece Roth could have caused “harm to the security of the United States” by allowing foreign national students, one from China and one from Iran, to work on a contract to produce technology to be used on unmanned Air Force drones.

Varlan noted that the Air Force was forced to scrap the research out of fear it had been compromised, although there was no testimony at Roth’s trial last year that any foreign government actually had accessed the information or that Roth ever had tried to sell or give the information to foreign governments.

Roth repeatedly has said he did not believe that mere research and the results of that research violated the Arms Export Control Act. However, Varlan said testimony showed Roth continued to allow foreign national students access to restricted data and even took various reports to China with him after he was twice warned by UT officials about the law.

Interested in learning how you can better manage this facet of trade compliance?  Check out more details here.

You can’t mess with export controls, especially if you deal with sensitive technologies.  Here’s an example of the consequences of export control violations: Atmospheric Glow Technologies and former University of Tennessee professor J. Reece Roth.

July 2006: Feds start inspecting.
June 2008: Company files for bankruptcy
August 2008: Company pleads guilty
May 2009: Prosecuters recommend 5  – 6 1/2 years in prison for Mr. Roth. Meanwhile sentencing will take place at another hearing at an undetermined date in the future.

Props again to International Trade Law blog:

Dr. Roth faces a maximum penalty of five years in prison and a $250,000 fine for the conspiracy and fraud convictions. The 15 convictions for violating the AECA each carry a maximum penalty of 10 years in prison and a $1 million fine.

Atmospheric Glow Technologies faces a maximum criminal fine of $1,000,000 and a maximum term of five years of probation for each of the 10 counts.

KnoxNews.com has good coverage of the whole saga