US University Dodges Fine After Disclosing Export Violations to BIS

“Researchers should take note: even the smallest items, like a genetically modified fruit fly, can implicate chemical and biological weapons controls,” said Matthew Axelrod, the top BIS export enforcement official. He said the university’s voluntary disclosure and “extensive cooperation” with the agency’s investigation “demonstrates the value for academia of disclosure and cooperation when violations of our export rules are discovered.”

As part of a settlement, the school must train “relevant IU administrators” on the EAR and export compliance. It must also give presentations about its illegal exports to a forum of the directors of the Bloomington Drosophila Stock Center, the university department that collects and distributes insect strains, as well as to the "broader university export control community." If the school commits another EAR violation during a one-year probationary period, BIS may revoke its export privileges.

The agency said it could have imposed a maximum penalty of $368,136 per violation, a denial of export privileges, an “exclusion from practice before” BIS and “any other liability, sanction, or penalty available under law.” But IU’s self-disclosure, cooperation with BIS and “remedial measures after discovering the conduct” led to a “significant reduction in the penalty,” the agency said.

John Sonderman, director of the BIS Office of Export Enforcement, said the agency “expects vigilance and export compliance among research institutions,” but it also offers “appropriate non-monetary resolutions” for exporters that self-report “non-egregious violations.” He said BIS is “pleased to have reached an agreement with IU that reflects IU’s commitment to export compliance as well as BIS’s interest in enforcing and upholding the integrity of the export control regulations.”

Sonderman also said the settlement is a “direct result” of the agency’s recent outreach with American universities. BIS over the past two years has begun working closer with more than 20 schools as part of a new program aimed at improving compliance at universities that have faced high risks for illegal technology transfers (see 2206290019 and 2303100021).

BIS said IU’s violations took place between 2017 and 2021, when the Bloomington Drosophila Stock Center exported 42 shipments of various strains of genetically modified fruit flies “containing transgenes of the A subunit of the ricin toxin” to research institutions and universities around the world. The shipments, worth about $580, required an export license and were classified under Export Classification Control Number 1C353.b.2 until April 2, 2018, and since have been classified under 1C353.a.3.

IU sent the strains to 30 different institutions in 16 separate destinations, BIS said, adding that none of the institutions was on the agency’s “lists of parties of concern.” But all 16 destinations were listed under the CB1 category on the agency’s Commerce Country Chart, which made them subject to a license requirement. “However, no license was sought or obtained for any of these exports,” BIS said.

BIS said fruit flies “modified to express Ricin A are used frequently in basic research of fruit fly development.” It also said the “protein expressed by the Ricin A gene is not, by itself, a toxin, and does not pose a danger.” But ricin and its subunits are controlled under the Commerce Control List and by the Australia Group, the multilateral export control group that looks to restrict exports of items that contribute to chemical and biological weapons proliferation.

An IU spokesperson declined to respond to a request for comment.