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					      Understanding Global Export
          Compliance at Intel
Presented to:
Best Practices in Enterprise Export Control Compliance
Workshop for Philippines




Bangkok, Thailand
21 October 2009                Mario R. Palacios
                               Global Export Compliance
                               Intel Global Trade
               Intel Snapshot


 Founded in 1968
World’s largest semiconductor
 company
 $5.3 billion 2008 Net Income
 > 80% of the company’s $37.6 billion
  2008 sales were outside the U.S.
 > $10 billion annual investment in
  R&D and capital investments
 300 facilities in 50 countries
> 80,000 employees
                           What We Do
                           WiiMAX              NAND




              MID                                         Netbooks/
                                                           Nettops
                            Mobile            Desktop


                                       IA

             Consumer                                       Visual
             Electronics             Server               Computing



                           Health              Embedded




Silicon Technology | iA Platform Architecture | Market Creation

                           Intel Employees
                    Fab and Assembly Test Sites



                                        Ireland           Israel                         Dalian

   Oregon                                                                      Chengdu


California                  Massachusetts
                                                                                                  Shanghai
   Arizona
                                                                                                    Cavite
       New Mexico         Costa Rica                                    Vietnam

                                                                            Penang
                                                                             Kulim



                                                                   Wafer Fab
                                                                   Assembly/Test



             Currently operating 11 fabs in the United States, Israel, and Ireland
                          with 1 more under construction in China
  Global Export Compliance at Intel

Keep Intel Legal Worldwide by:
Ensuring compliance with the U. S. Export regulations
Ensuring compliance with the laws of the countries where we
conduct business.


Proactively Enable Intel Business Development by:
Proactively securing appropriate export licenses
Participation in Government Counsels and Influencing
Legislation.
Importance of Export Compliance
Consistent with Intel’s policy on ethics and keeping Intel legal


 Non-compliance could result in:
    Bad press
    Damage to the Intel name and our reputation.
    Increased government scrutiny
    Less ability to influence legislation/regulation
    Denied Export Licenses
    Loss of Export privileges
    Civil and/or criminal penalties


                Non compliance costs!
The Global Export Environment at Intel
           1990’s                     21st Century

•90% products controlled        •90% products decontrolled
•One technology:                •Many new technologies:
Microprocessor                  Cat 1, 2, 3, 4, 5, 6, ITAR
•Technology rarely              •Technology routinely shared
distributed outside US          across all geos and all
•Emerging sites in Controlled   businesses via servers
Countries                       •Globalization
•Country controls                   • Restricted Countries:
                                        China, Russia, India
                                    • People controls:
                                        Workforce Mobility
                                    •Host Country Controls
         Global Export Control Regimes
   Wassenaar Arrangement (WA)
    – Conventional arms and dual-use goods and technologies
   Missile Technology Control Regime (MTCR)
    – Unmanned delivery systems capable of delivering weapons of
      mass destruction
   Nuclear Suppliers Group (NSG)
    – Nuclear weapons
   Biological Weapons Convention (BWC)
    – Chemical and biological weapons proliferation
   Australia Group (AG)
    – Chemical and biological weapons
          U.S. Export Control Regulations
 Dept of Commerce: Export Administration Regulations (EAR)
   – Administered by the U.S. Department of Commerce, Bureau of Industry and
     Security (BIS)
   – Control “dual-use” items (i.e., items that may have both commercial and
     military applications)


 Dept of State: International Traffic in Arms Regulations (ITAR)
   – Administered by the U.S. Department of State, Directorate of Defense Trade
     Controls (DDTC)
   – Control items specifically designed, developed, configured, modified or
     adapted for a military application


 Dept of Treasury: Office of Foreign Asset Control Regulations (OFAC)
   – Administered by the U.S. Department of Treasury, Office of Foreign Asset
     Control
   – Administers and enforces economic and trade sanctions
         U.S. Export Control: Licensing
 Reviewing agencies have common national security and
  foreign policy interests, but unique perspectives
 Reviewing Agencies:
  – Department of Commerce
     – Technical issues
     – Economic issues
  – Department of Defense
     – National defense issues
  – Department of Energy
     – Nuclear issues
  – Department of State
     – Foreign policy issues

 If consensus is not possible, the application will enter into the
  dispute resolution process
  How to Ensure Export Compliance
CUSTOMER SCREENING                    COMMERCE CONTROL LIST




CUSTOMER                              CLASSIFICATION



                 AUTHORIZATION
    END-USE                                    ECCN




                      COUNTRY


                     COUNTRY CHARTS
        Customer Screening Controls
   U.S. EXPORT PROHIBITION

Exports/Reexports are prohibited
when the exporter knows or
suspects that goods are destined
for facilities or activities involving:
– embargoed destinations
– denied persons
– nuclear proliferation
– chemical/biological weapons
– missile delivery systems
– missile technology locations and projects
– government end-users for restricted
  encryption items
     Map of Restricted Countries
 




• US government regulates technology restrictions (i.e., Controlled
  Technology (CT)) by countries if deemed to impact US National Security,
  Military impact or Anti-terrorism.
• Intel further defines additional restrictions if deemed to impact Intellectual
  Property (IP) or competitive advantage.
                  Physical Export Controls
                                                          Sales & Mktg
                                                          Sensitive
                                                          Customer
      Export                                              Screening
      Licensing
                          GTS
     PTC              DPL Screening
                                                   GCIM
     Classification
                                                                  Export
                                                                  Classification,
                                                                  Licensing, &
                                                                  Screening
                                        SAP
                                                               Manual
                                                              Commercial
                                                                Invoice
                  NFGSS
Export
Classification                        Commercial
Licensing, &                           Invoices

                                                             Shipping
      Compliance based on Intel & US
        Government requirements
                                           Compliance verification
       Intellectual Property
                                              Export Licenses
       Registered Classified data

       Controlled Technology                IP security plan

       Un-registered Classified data
                                       Technology Control Plan




•   Security (Logical & Physical)
•   Risk/Compliance Assessment
•   Business travel                     Compliance Categories
•   Relocation assignments             Business need to know
•   Contractors/Outsourcing
•   Training and Awareness
  Global Technology Transfer Controls

  Impact to Intel’s           Spans Multiple
Global R&D Activities:        Technologies:


• Deemed Exports              •Development and
• Deemed Reexports            Production Technology
• Technology Transfers to
                              •IC’s,Computers,
  Mfg, ATM, Labs & Design
  Centers                     telecommunication,
                              encryption
• Global Workforce 24x7x365
• Contingent Workforce        •EAR     (Cat 3, 4, 5)
• Intern Hiring
                              •ITAR:    Defense Services
• Technical Conferences
• IP Security Controls
  Intra-Company Export License Controls
           License approval: 2- 4 months
                       Software &
Deemed Export          Technology Transfer       Project Based

Authorization to        Authorization to       Authorization to
transfer controlled     transfer controlled    transfer controlled
software &              software &             software, technology,
technology to an        technology to a        equipment, spares to
individual in the       specific end-user in   a specific end-user in
U.S.                    a restricted country   a restricted country
Used to hire foreign    Used for restricted
nationals from          country nationals      Used to facilitate Fab
restricted countries    who travel to non      construction projects
to work in the US       restricted countries   and to train
while under a work      for training or        employees at Intel
visa                    relocation             facilities
                                             •Our crown jewels
  Extreme Concepts                               •IP laws –
                                                 copyrights,
                                                trademarks,
                                                patents, etc.
                                              •Administered by
                                                    Legal
                                               •Red & Orange
                                               classifications


•IP vs. CT
•Enabling vs. Restricting
•Need to Know vs. Unlimited Access
•Globalization vs. Nationalism
                                                Only a subset of
•Export Regulations vs. Local Privacy Laws             IP
                                                 Regulated by
                                                EAR, ITAR, OFAC
                                                Administered by
                                                      GTT
                 Key Messages

 Maintain Compliance Globally! Priority!
  – Export Compliance is fundamental to our operation.
 U.S technology and products are subject to U.S.
  Export Regulations in all parts of the world.
 Compliance to export laws is mandatory for all U.S.
  exporters and authorized distributors.
 IP Security protocols and export regulations
  compliance
  – fundamental partnership for global compliance
 An effective compliance program begins with a global
  worldview
Backup
                                                        Dept of Commerce,
                                                        Dept of State, OFAC, UN
                 Country Classification
                         January 2009

 “Non-controlled”   HPC Countries       Controlled       Embargoed
 Countries                              Countries        Countries

Australia             All countries      Albania          Burma (Myanmar)++
Austria               except those       Armenia          Cuba
Belgium               listed as “non-    Azerbaijan       Iran
Canada                controlled         Belarus          North Korea
Denmark               countries”…        Cambodia         Sudan
Finland                                  China            Syria
France                                   Georgia
Germany               For Example:       Iraq
Greece                                   Kazakhstan
Ireland               Argentina          Kyrgyzstan
Italy                 Costa Rica         Laos
Japan                 Egypt              Libya           ++ OFAC sanctions
Luxembourg            India              Macau           on investment and
Netherlands           Israel             Moldova         facilitation
New Zealand           Korea              Mongolia
Norway                Malaysia           Russia
Portugal              Mexico             Tajikistan
Spain                 Philippines        Turkmenistan
Sweden                Poland             Ukraine
Switzerland           Romania            Uzbekistan
Turkey                                   Vietnam
United Kingdom
United States
        ITAR Prohibited Destinations
 When operating under the ITAR, we must be aware
  that the ITAR has an extended embargoed list (to
 support the US and UN arms embargo)


 Below are the countries listed in ITAR § 126.1
 Belarus                 Haiti           People’s Republic of
 China
 Cuba          Liberia           Libya
 Iran                    Sudan           Vietnam
 North Korea             Iraq            Somalia
 Syria         Afghanistan
 Venezuela               Rwanda
 Burma                   Democratic Republic of Congo