Export Controls regulate the export and intra-Community transfer of military and dual-use items. Dual-use items are civil goods that can also have military uses, for example, chemicals, batteries, night vision goggles and metal powder. There have recently been two significant developments in the area of EU Export Controls: (i) the recast of the dua-use Regulation; and (ii) the adoption of an EU Directive promising the facilitation of intra- Community transfer of certain military items.
Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items
On 29 May 2009 the recast dual-use Regulation (Regulation 428/2009) was published in the EU Official Journal (EU OJ). Regulation 428/2009 will replace the currently applicable Regulation 1334/2000 from 27 August 2009. As is currently the case, dual-use items listed in Annexes I and IV to Regulation 428/2009 will continue to require an authorisation for export and intra-Community transfer respectively. Dual-use items not listed in these Annexes will be subject to an export authorisation requirement, if the exporter knows or is informed by the authorities that they are subject to certain end-uses. Most importantly, an authorisation is required if (i) the dualuse items in question are intended for use in connection with weapons of mass destruction (WMD) or missiles capable of delivering such weapons; or (ii) the purchasing country or country of destination is subject to an arms embargo and the items in question are intended for a military end-use.
In addition to the current rules, Regulation 428/2009 introduces new controls on brokering activities and transit.
Brokering services comprise the negotiation or arrangement of transactions for the purchase, sale or supply of dual-use items from a non-EU Member State to any other non-EU Member State and the selling or buying of dual-use items that are located in non-EU Member States for their transfer to another non-EU Member State. Under the new Regulation 428/2009 brokering services will require a prior authorisation, if they concern items listed in Annex I and the broker knows or is informed by the authorities that these are subject to an end-use in relation to WMD or missiles capable of delivering such weapons.
Transit is the entering and passing through the EU customs territory of non-EU dual-use items with a destination outside the EU. Member States may prohibit the transit of non-Community dual-use items listed in Annex I of the Regulation 428/2009 if the items are or may be intended for use in relation to WMD or missiles capable of delivering such weapons.
Under Regulation 428/2009 Member States will also be required to place a stronger emphasis on a company’s internal compliance with export control rules when reviewing an application for a global export authorisation. This could lead to a stronger focus on and controls of companies’ compliance with export control laws.
Please click here to view the full version of a Hammonds LLP Review of the developments relating to the dualuse Regulation..
Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community (Transfer Directive)
EU arms trade is currently subject to 27 national licensing regimes, which diverge widely. Member States have acknowledged that these disparities may impede the movement of defence-related products and distort competition within the internal market.
The Transfer Directive was published in the EU OJ on 10 June 2009 and encourages Member States to use a system of general and global, rather than individual, licences for certain types of intra-Community transfers of products listed in the EU Common Military List. General licences are established by national law or an administrative act, rather than in response to an application. Global licences authorise a supplier to transfer (categories of) defence-related products to certain (categories of) recipients during three years.
Use of such licenses can significantly facilitate and speed up a company’s daily business administration, as not each single shipment would need prior approval from the authorities. The most attractive general licence is arguably for certified recipients. For suppliers to benefit from this general licence, a recipient must undergo a detailed certification process that probes its reliability and compliance with export controls.
In addition, Member States may also entirely exempt certain intra-Community transfers from the licence requirement.
Member States must implement the Transfer Directive into national law by June 2011.
Please click here to view the full version of a Hammonds LLP Review of the developments relating to the Transfer Directive