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Strengthened Export Controls: Facts and Myths

Some assertions in the media present incorrect information or interpretations of the Defence Trade Controls Act 2012 (DTC Act). Let’s be clear on the facts and the myths.

Person with microscope

1. The DTC Act controls ideas.

Claim:If you deal in new ideas in innovation areas, and you do not apply for a Defence permit, you are putting yourself at serious legal risk.
Claim: Australian academics who teach mathematics may need to run new ideas by the Department of Defence before sharing them or risk imprisonment.

Fact: The Defence Trade Controls Act 2012 DOES NOT control ideas.  It does require a person to obtain a permit before sending controlled technology, as included on the Defence and Strategic Goods List, to another person overseas.
A lot less technology is controlled than might be expected. Controlled technology is technology that is not available in the public domain and is not basic scientific research. Technology is only controlled if it has been developed sufficiently to meet the high threshold of being specific and particularly responsible for achieving or extending controlled performance levels, characteristics or functions.
Our findings to date, based on assessments of applications and publications, is that the control threshold is much higher than researchers anticipate. Most academic research undertaken in Australia does not involve controlled technology.
If a researcher believes that his or her research might involve controlled technology, and they are planning to send the controlled technology to a person who is overseas, we advise that they contact Defence Export Controls to obtain tailored advice.

2. Defence Export Controls has the right to search a researcher’s premises.

Claim:A granted permit gives Defence Export Controls the right to search your premises (home or work) and copy any documentation found.

Fact: The Defence Trade Controls Act does NOT provide Defence with the power to search permit holders' premises. It does provide the Secretary of the Defence Department with the power to serve a notice requiring a person to provide information and documents in relation to activities carried out under a permit.
Along with the strengthened export controls provisions, the Defence Trade Controls Act also implements the Treaty between Australia and the United States on Defence Trade Cooperation. The Treaty provisions only apply to members of the Australian Approved Community as set out in the Act, and only in relation to activities carried out as an Australian Approved Community member. The Treaty regime in the Act is a separate regime to the strengthened export controls regime and ONLY applies to Australian Approved Community members.
For the Treaty, there are provisions in the Act that provide for authorised officers to enter the premises of an approval holder under section 27 of the Act – Approval of bodies corporate as members of the Australian Community – for the purpose of assessing whether the Approved Community member has complied with the conditions of membership. It is these provisions that have caused unnecessary confusion and alarm.

3. The use or teaching of cryptography is controlled.

Claim: The introduction of criminal provisions to the DTC Act has raised serious questions about the safety of distributing or even teaching encryption among researchers.
Claim: The DTC Act subjects many ordinary teaching and research activities to unclear, potentially severe, export controls.

Fact: Teaching is not controlled, whether teaching cryptography or another subject. The Defence Trade Controls Act does not regulate the teaching of undergraduate university courses. Undergraduate teaching material is considered to be in the 'public domain' and exempt from control as it is highly unlikely to meet the control thresholds set out in the Defence and Strategic Goods List.

4. Teleconferences or video conferences that mention any technology will need approval.

Claim: The DTC Act introduces a permit regime for any “intangible supply” (especially electronic communication) of new ideas in DSGL areas.
Claim: Every time a mining company has a teleconference that mentions any technology they will need approval.

Fact: This is incorrect. Mentioning technology is not controlled. This is because (a) it is highly unlikely, almost impossible, that controlled technology will be supplied orally, and (b) the Act contains a provision that exempts oral supply from requiring a permit. In fact, this exemption was included because Defence believes it is so unlikely that a person could ever provide another person with controlled technology orally

5. Defence can retrospectively deem research to be controlled and impose criminal sanctions.

Claim: Defence Export Controls could retrospectively deem research leading to that controlled and some prior communications to be criminal acts.

Fact: This is incorrect. The DTC Act cannot be applied retrospectively.

6. Communication of ideas.

Claim: Researchers and innovators who communicate any new idea overseas without permission face ten years in prison and AUD400,000 fines.

Fact: This is a misleading statement. If a 'new idea' is sufficiently developed to be controlled technology as included on the Defence and Strategic Goods List, and what is being communicated meets the control threshold in the List, then yes, you will require a permit before communicating this 'new idea' to another person who is overseas. If you are communicating orally, an exemption applies and a permit is not required.