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BIS Announces Settlement Agreement with Indiana University Over Export Control Violations

On June 24, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced the settlement of an administrative enforcement action involving Indiana University of Bloomington (“Indiana University”) over multiple violations of export controls spanning a four-year period. According to the settlement agreement publicized by BIS, Indiana University illegally exported genetically modified strains of fruit flies containing transgenes of a certain subunit of the ricin toxin to thirty (30) different institutions in sixteen (16) separate jurisdictions from approximately November 2017 and April 2021.

While the protein expressed by the transgene in question is not itself capable of producing the ricin toxin, both ricin and its subunits are controlled for chemical and biological weapons proliferation purposes under ECCN 1C353. These commodities are prohibited for export without a license to any country designated on  the Commerce Country Chart’s CB1 category—including all sixteen (16) destinations implicated in Indiana University’s export violations. Notably, however, the settlement agreement indicates that Indiana University did not engage in export activity related to Entity List parties. Furthermore, the total value of the exports in question amounted to less than $600. Most significantly, upon discovering the violations in question, Indiana University promptly disclosed the facts and circumstances underlying the infractions to BIS.

In exchange for Indiana University’s admission to violating the relevant provisions of the Export Administration Regulations (“EAR”), BIS stipulated to the settlement of the administrative proceeding under favorable terms that include the imposition of a suspended penalty. Pursuant to the express terms of the settlement agreement, Indiana University is subject to a one-year suspended denial of export privileges for all items classified under ECCNS 1C351, 1C353, and 1C354. Provided that it commits no additional EAR violations during that time, conducts appropriate export compliance training, and presents to both the biomedical research and academic research communities at-large on the topic of export controls, the agreement provides that the penalty will ultimately be waived.

The latest enforcement action highlights the importance of complying with export control regulations when engaged in academic research activities. While the broadest possible dissemination of knowledge in the scientific community is a necessary predicate to innovation, institutions engaged in such research must remain cognizant of U.S. export control laws, which are designed to frustrate the ability of adversaries and other malign actors to acquire and co-opt the most sensitive commodities and technologies. As the volume of trade controls increases—owing primarily to a noticeable uptick in geopolitical conflict—universities and colleges in particular remain vulnerable to potential export violations.

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