Toward the end of 2014, the European Commission updated Annexes to EU export control and sanctions regulations that may change how these regulations affect your exports.Review of how these changes affect the items you export is recommended to ensure that your company continues to be compliant. In addition, it is important to keep in mind, that controls and sanctions of other jurisdictions, such as the United States may also be applicable to your transactions.
- New EU dual-use list
Commission Delegated Regulation (EC) No 1382/2014, dated 22 October 2014, which came into effect on 31 December 2014, updated the EU Dual-Use List (Annex I to the EU Dual-Use Regulation, (EC) No 428/2009, as amended), which includes the list of items subject to dual-use export controls in the EU.
The updated list reflects changes taken within the framework of the Wassenaar group and other international regimes to ensure compliance with the EU’s and Member States’ commitments under those regimes, to which the United States is also a party. The changes take into consideration developments between 2011 and 2013. For some time, the EU Dual-Use List has been out of date – it was last updated in 2012 to reflect changes in the international regimes up to 2010 – because changes to the List required approval through the EU’s ordinary legislative process. To remedy this problem, in April 2014, the European Parliament and the Council of the European Union delegated authority to update Annex I by means of delegated regulation, subject to the right of the Parliament and the Council to object within 2 months (subject to extension). In the future, changes to the List should not be so delayed.
The new Regulation introduces some 400 changes to the list, which are summarized in a Comprehensive Change Note published by the European Commission.
- changes to technical parameters for nuclear reactor parts and components, such as frequency changers;
- new controls on certain chemicals, such as plant pathogens;
- new controls on special materials, electronics and computers, telecommunications and information security equipment, sensors and lasers, aerospace and propulsion, for example underwater survey equipment, carbon monoxide lasers and hydro-acoustic sensors; and
- controls aimed at restricting the spread of technologies that can be used for mass surveillance, monitoring, tracking and interception.
In a few cases, the new Regulation removes items and technologies which have become more widely available and represent a lower security risk, and therefore do not need to be subject to control any longer. But predominantly these changes to the dual-use list resulted in additional items becoming subject to new controls. Export licenses already issued for these goods generally retain their validity.
These EU Regulation does not affect national dual-use controls which have been or may be implemented at the Member State Level. The EU Dual-Use Regulation permits member states to establish national controls on items not listed on Annex I only for reasons of public security or human rights considerations. Nor do the changes to the EU Dual-Use List affect controls on military items, which are controlled at the Member State Level.
- New EU sanctions against Russia and Crimea
Furthermore, the European Commission amended Regulation (EC) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine by Regulation (EC) 1290/2014, which came into effect on 4 December 2014. Among other amendments, the regulation includes changes regarding the description of CN codes listed in Annex II, which lists certain technologies suited to the oil industry for use in deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia. Five CN Codes, relating to pumps, have been changed to clarify that the controlled pumps are those that are "specially designed to pump drilling muds and/or cements into oil wells”, or are "suitable solely or principally with oil field machinery” of certain headings.
With respect to the EU sanctions against Crimea the European Commission significantly expanded Annex II by Regulation (EC) 1351/2014, which came into effect on 18 December 2014. The new Annex II does not refer to individual CN codes only; now it covers all products of eighteen Customs Tariff Chapters (25-29, 72-76, 78-81, 86, 88, 89 and 98) plus individual products of Customs Tariff Chapters 38, 71, 82, 84, 85, 87, 90.
The US has recently expanded sanctions with respect to Crimea that essentially prohibit the exportation, reexportation sale or supply directly or indirectly from the United States or by any US person wherever located of goods, services or technology to Crimea. In addition, both US and non-US persons are prohibited from exporting or reexporting to, or transferring within, Crimea items that are subject to US jurisdiction – generally US-origin items and non-US items with more than 25% US content. These restrictions go beyond those implemented in the EU.
As a guide and for a better overview of items subject to EU and US sanctions involving Russia and Crimea you can refer to our Side-by-Side List.
* * *
The complexity of export controls and and sanctions regulations, which are constantly changing, requires continued vigilance.