european export control update

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European Export Control Update

Naboth van den BroekBoston, 31 May 2012

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Attorney Advertising. Prior results do not guarantee a similar outcome.Attorney Advertising. Prior results do not guarantee a similar outcome.

1. EU Export Control Regime - Overview

2. Dual-Use Goods & Technology

3. Military Goods & Technology

4. Sanctions

5. Recent Developments / Update

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1. EU Export Control: Overview

National rules (27 Member

States)

Defense & Security= MbS

prerogative

Procedural rules and enforcement

European rules

Trade = EU prerogative

International rules

EU-level “Community” rules

EU-level “intergovernmental” rules (binding and non-binding)

Member States rules expanding scope of EU rules

Autonomous Member State rules

Member State procedural rules

International rules

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2. EU Dual-Use Rules: General

Community (EU) ‘Competence’ Largely regulated at EU level

Regulation 428/2009

Dual-use items are: “… items, including software and technology, which can be used for both civil and military purposes, and shall include all goods which can be used for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices.” (Reg. 428/2009)

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EU Dual-Use Rules: Coverage

General Single, regularly updated common list of items requiring export authorization “Catch all” for certain end-uses Items exported to final destination outside EU Some items (“sensitive” or “very sensitive”) are covered even for intra-EU transfer

(see Annex IV parts I and II)

Noteworthy Includes tangible technology (objects, documents, software) and intangible

technology (skills, know-how)

Includes physical transfer and electronic media, fax or phone

Includes “technical assistance”

Includes non-necessary information for patent applications

Includes technology integrated into other products

Non listed dual-use items: authorization may be required

Specific national rules may apply/interpretations may differ

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EU Dual-Use Rules: Procedures

License must be obtained in Member State where the exporter is

established

“Exporter” = person on whose behalf the export declaration is

made / who holds the power to determine the sending of the items

Licensing procedures established by each Member State, including

record-keeping

If multiple Member States involved there is a “consultation” process

(veto!)

Enforcement and Implementation at Member State level

Several types of licenses (“authorizations”)

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3. EU Military Export Controls

Member State “Competence” - however EU rules exist:

– Export outside the EU: Common position 2008/944/CFSP

– Export within the EU: Directive 2009/43

In both cases:

– Items listed in EU Common Military List (not exhaustive + regularly updated) (similar to U.S. ITAR but with some differences)

– License Member State

Bilateral issues

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4. EU Sanctions

EU and Member State legislation

– Enforcement & admin: Member State level

Generally in accordance with international policies (UN, OSCE)

EU sanctions “programs”: Iran, Libya, Syria

EU arms embargos/asset freezes/prohibition of specific services:

Afghanistan, Belarus, China, Eritrea, Iraq, North Korea, Zimbabwe,

terrorists group etc.

Focus on specific items, particularly arms, munitions; but sometimes

broader (technology, financing, specific end-users, flight bans,

investment)

Generally no US-style general embargoes

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Key Regulatory and Other Developments

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1. Dual-Use: Changes to the EU Dual-Use Rules

Annex I to Reg. 428/2009 amended on April 2012 comes into force on 15 June 2012

Regulation 1232/2011 (December 2012): Introduction of five new EU General Authorizations (EU GEAs) (total: 6)

EU001 – exports to Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Liechtenstein) and United States of America EU002 – export of certain dual-use items to certain destinations EU003 – export after repair/replacement EU004 – temporary export for exhibition or fair EU005 – telecommunications EU006 – chemicals

New measures to increase transparency and improve enforcement including possibility to prohibit certain exporters from using EU GEAs.

No EU GEA for Computers & Related Equipment; concern about human rights/monitoring

Reminder: Brokering services covered

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2. Dual-use: EU Green Paper on Dual-Use Goods

Proposed Reform: Amendment expected toward end-2012Key items expected:

Common risk assessment approach of all export control authorities

Improved exchange of info about suspicious transactions and licensing decisions

Phase out NGAs in favour of EU GEAs

Common approach to catch-all controls

Working toward a fully integrated internal market for dual-use items (phase out internal controls)

Coordinated enforcement across the EU + improved access to relevant info for customs enforcement

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3. Sanctions: Significantly more active sanctionslandscape

Sanctions are getting broader (Iran, Syria, Libya, terrorism blacklists)

Basic approach continues to follow the UN, but more active stance and closer coordination with U.S. sanctions policy

Member States continue to play an active role

Judicial Protection continues to be a challenge

Burma: suspended

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4. More active enforcement

Expect to see continued increase in focus on export controls and enforcement

Expect to see continued focus on sanctions

Expect to see more coordinated action (?)

Between MbS

Between policy areas

Focus on broader range of technologies (computers & related equipment, telecom equipment, software)

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5. More opportunities for risk mitigation and cooperation

Active compliance audits but also an increased focus on compliance programs to mitigate risk and reduce penalties

No formal Voluntary Disclosure process, but don’t forget regulatory cooperation…

Judicial Protection (sanctions, Lisbon Treaty)

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6. Don’t forget other EU Regulations!

EU regulatory policy is increasingly wide-spread and has an ever wider product and geographic scope

Beyond export control and sanctions, there are other areas of regulation for US exporters to take into account, including:

Environmental regulations (electrical goods, electronic waste, nanotech, biotech, etc.)

Technical standards and regulations

Competition rules (affecting licensing, reselling, distribution)

Data protection & Privacy

Sanctions for non-compliance can be severe US – EU Trade Cooperation (Working Group / FTA ?)

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Thank you for your attention!

Naboth van den Broek

[email protected]

european export control update

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