Export Controls: State and Commerce Should Improve Guidance and Outreach to Address University-Specific Compliance Issues

GAO-20-394 Published: May 12, 2020. Publicly Released: May 12, 2020.
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Fast Facts

Over 1.2 million foreign students studied—with many contributing to important research—at U.S. universities in 2018. But there is a risk they may “export” sensitive knowledge that they gain to their home countries.

The Departments of State and Commerce share guidance with exporters, including universities, to help them comply with export control regulations and safeguard controlled data and technologies that may be shipped overseas or shared with foreign nationals in the U.S. However, we found that this guidance doesn’t address issues most relevant to universities.

Our 4 recommendations include improving guidance and outreach to universities.

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Lab work

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Highlights

What GAO Found

The Departments of State (State) and Commerce (Commerce) have each provided guidance and outreach to support exporters' understanding of and compliance with their separate export control regulations. Exporters, including universities, are subject to these regulations if they ship export-controlled items overseas or if they share such items, including technology or source code, with foreign persons in the United States. University and association officials raised concerns that State and Commerce guidance and outreach does not adequately address export compliance issues that are more common to universities than to industry, such as fundamental research—i.e., research that is ordinarily published and not subject to export control regulations. Without additional guidance and outreach that addresses such issues, universities may not have the information they need to adequately comply with these regulations and properly safeguard export-controlled items.

Officials from selected universities and university associations identified three export control-related challenges in working with other federal agencies. For example, university and association officials asserted that Department of Defense (DOD) officials misunderstand the term fundamental research, which may limit universities' ability to conduct research for DOD. DOD acknowledged that some officials have inconsistently interpreted the regulations and that it has not yet fully addressed this challenge. Additionally, university and association officials expressed concerns that threat briefings and other guidance that the Federal Bureau of Investigation (FBI) and Department of Homeland Security provide are not helpful because, for example, they do not contain unclassified information that can be shared widely. To address these concerns, the FBI partnered with a university association to produce a series of unclassified “awareness-raising” materials for university audiences, among other efforts.

Seven of the nine universities GAO visited have export compliance policies and practices that generally align with State's and Commerce's export compliance guidelines. For example, most have demonstrated a strong management commitment to export compliance and have robust practices for tracking export-controlled items, recordkeeping, and reporting potential violations. However, GAO identified gaps in some universities' practices in four areas—risk assessments, training, internal audits, and export compliance manuals.

Number of Foreign Students at U.S. Universities in 2018, by Country

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Why GAO Did This Study

Over 1.2 million foreign students studied at U.S. universities in 2018 (see fig.). Although foreign students and scholars contribute to U.S. research, there is a risk that they will “export” sensitive knowledge they gain to their home countries. To mitigate this risk, the U.S. government implements export controls.

GAO was asked to review agency guidance and universities' security practices. This report examines (1) the extent to which State and Commerce have provided guidance and outreach that supports U.S. universities' understanding of export control regulations; (2) challenges U.S. universities face working with other federal agencies, such as DOD; and (3) the extent to which universities' export compliance practices align with State and Commerce guidelines.

GAO reviewed related laws, regulations, and guidance, and interviewed officials from relevant federal agencies and four university associations. GAO also visited nine universities—selected, in part, on the basis of research expenditures and geography—and assessed their compliance practices against agency guidelines.

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Recommendations

GAO is making four recommendations, including that State and Commerce should improve their export control guidance and outreach, which may help address gaps in university export control compliance practices. GAO also recommends that DOD take steps to ensure its officials consistently interpret export control regulations. State, Commerce, and DOD concurred with the recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of State The Secretary of State should ensure that the Deputy Assistant Secretary for Defense Trade Controls, in consultation with university representatives, provides additional or revises existing guidance and outreach to address university-specific export control issues to further support universities' understanding and compliance with the International Traffic in Arms Regulations. (Recommendation 1)
Open
The Department of State concurred with the recommendation. As of December 2022, State completed revisions to its Compliance Program Guidelines; however, the updated guidelines published in December 2022 did not include additional guidance related to topics specific to universities. We will continue to monitor State's progress in implementing this recommendation.
Department of Commerce The Secretary of Commerce should ensure that the Under Secretary for Industry and Security, in consultation with university representatives, provides additional or revises existing guidance and outreach to address university-specific export control issues to further support universities' understanding and compliance with the Export Administration Regulations. (Recommendation 2)
Closed – Implemented
The Department of Commerce concurred with the recommendation. In its November 2020 response to Congress, the agency stated that it (1) had already increased its outreach to universities, (2) planned to discuss university-specific challenges with university representatives, and (3) planned to revise current guidance to address challenges identified by university representatives. For example, in September 2020, Commerce provided a session focused on academic-related export control issues at its annual conference for the first time. This session included information about fundamental research and deemed exports, two areas for which university officials requested additional guidance. Commerce then sent a set of questions to the members of the Association of University Export Compliance Officers in November 2020 to collect information about the challenges that university officials face in implementing export control regulations. In response to the survey results, Commerce developed a brochure in September 2021 that includes information about the applicability of export controls, including the Export Administration Regulation's treatment of fundamental research, to academic institutions. Commerce has made the brochure available at outreach events attended by university export control professionals.
Department of State The Secretary of State should ensure that the Deputy Assistant Secretary for Defense Trade Controls revises existing export compliance guidelines to include information concerning periodic risk assessments to remind exporters that it is beneficial to periodically identify, analyze, and respond to new risks as part of an effective International Traffic in Arms Regulations compliance program. (Recommendation 3)
Open
The Department of State concurred with the recommendation. As of December 2020, State was in the process of revising its existing Compliance Program Guidelines to include information concerning periodic risk assessments and risk factors, as well as a risk matrix tool to help exporters identify potential export compliance vulnerabilities. As of July 2022, State reported that it expects to publish the updated Guidelines by the end of calendar year 2022. We will continue to monitor State's progress in implementing this recommendation.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Research and Engineering takes steps to ensure that its program officers and contracting officers are interpreting export controls consistent with regulations and guidance and consistently determining whether university research constitutes fundamental research. (Recommendation 4)
Open
The Department of Defense concurred with the recommendation. DOD held a listening session with members of the university community and DOD Components involved in research and the management of research awards in June 2021. The virtual listening session included over 60 participants from these groups. DOD used this event to collect input from university stakeholders on where the greatest challenges are in consistent application of fundamental research and export control policy. As of November 2022, the Department intends to use this information to develop new policy guidance on fundamental research by January 2024. We will continue to monitor DOD's progress in implementing this recommendation.

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