The Department of Commerce's Bureau of Industry and Security (BIS) issued an administrative penalty on Indiana University-Bloomington as part of a larger settlement related to the university's violation of the Export Administration Regulations (EAR). On 42 occasions, the Bloomington Drosophila Stock Center exported shipments of varying strains of fruit flies genetically modified to contain transgenes of the A subunit of the toxin ricin (controlled toxin). By itself, the protein expressed by the Ricin A gene is not a danger; however, ricin and its subunits are controlled for export under the EAR's Commerce Control List (CCL) under Export Control Classification Number (ECCN) 1C353.a.3 – and 1C353.b.2 prior to April 2, 2018 – and require a license for export to countries that are listed in Chemical and Biological Weapons Column 1 (CB1) on the EAR's Commerce Country Chart.
For reference, virtually all worldwide locations require a license to receive items controlled for CB1 reasons on the EAR's Commerce Country Chart. As a result, it is understandable that BIS would issue this administrative penalty on Indiana University and direct them as part of the settlement agreement to engage in extensive outreach to other universities and stock centers on the requirements for exporting materials that are export-controlled, especially where there are chemical and biological weapons uses.
In particular, the Bloomington Drosophila Stock Center exported genetically modified fruit flies containing ECCN 1C353 material to 30 different institutions in 16 destinations across the world, all of which shipments required a license for export. Nonetheless, for reasons undisclosed in the proposed charging letter, the settlement agreement, or the order, no license was sought or acquired for any of the 42 exports made by the Bloomington Drosophila Stock Center.
BIS stated in the order issuing the administrative penalty that it did not impose a monetary penalty on Indiana University (IU) because the IU Export Control Office discovered the unlicensed exports and voluntarily disclosed them to BIS. The terms of the administrative penalty imposed on IU are as follows:
- IU's is subject to a "suspended denial" of its ability to export items falling under ECCNs 1C351, 1C353, and 1C354 – while the denial of export privileges for items falling under these ECCNs is suspended by BIS, if IU fails to comply with the terms of the order or engages in any additional violation of the EAR in a 12-month period following June 24, 2024, the suspension can be revoked by BIS.
- IU is required to provide export compliance training on the EAR within 12 months of June 24, 2024 to relevant IU administrators, including to relevant research administrators and relevant fiscal officers.
- IU is required to provide a presentation of lessons learned from this matter to a forum of stock center directors, such as meetings of the directors of National Institute of Health-sponsored stock centers, which occur biennially.
- IU is required to provide a presentation of lessons learned from this matter to the annual Association of University Export Control Officers conference or other forum intended to bring awareness of this issue to university compliance leaders in the United States.
- IU needs to report to and collaborate with BIS related to the pertinent training provided to key stakeholders at IU and to external stock centers and university compliance professionals.
In announcing the issuance of the order in this case, BIS Assistant Secretary for Export Enforcement Matthew Axelrod made clear that BIS wants research institutions and universities to fully understand that export violations can occur even for small items and that organizational compliance procedures are essential. Assistant Secretary Axelrod stated: "At the end of the day, Indiana University's voluntary self-disclosure and extensive cooperation throughout the investigation resulted in a non-monetary resolution, which demonstrates the value for academia of disclosure and cooperation when violations of our export rules are discovered."
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