In December 2006 the European Commission proposed in the recast of the current EU Dual Use Regulation to create new CGEAs. On 16 December 2008 the European Commission proposed six additional CGEAs. The European Commission organised on 19 February 2009 a conference on dual use export controls for which exporters have been invited. During this meeting the European Commission presented also the proposal concerning the new CGEAs. From the discussions it can be noted that the proposal is welcomed by exporters, but that changes have to be adopted in order to ensure effectiveness of the use of the CGEAs.
Current System regarding CGEAs
An export license is needed for the export of dual-use items listed in the EU Dual Use Regulation. Exporters have to apply for a license, which can be individual, general or global. For certain countries, the European Union (“EU”) has issued a CGEA for the export of dual-use items with the exception of certain “sensitive” dual-use items. These countries are Australia, Canada, Japan, New Zealand, Norway, Switzerland, and the United States of America. In order to use the CGEA, the exporter has to register at the competent authorities in the EU Member State where he is established. For these exports, an exporter does not have to apply for a national general, individual or global license, but the exporter can use the CGEA by means of registration and indicating “ EU001” in Box 44 of the Single Administrative Document.
Proposal of six new CGEAs
The European Commission has proposed six new CGEAs:
- Low value shipments (EUR 5000)
- Export after repair/replacement;
- Temporary export for exhibition or fair;
- Computers and related equipment;
- Telecommunications and information security;
The proposal is based on the current national general authorisations issued by the competent authorities in the United Kingdom, Germany, France, Sweden, Netherlands, Italy and Greece. The United Kingdom, for example, issues Open General Export Licenses (“OGELs”) for these categories. In order to use the OGELs, the exporter has to register itself.
Main characteristics of the six new CGEAs
The conditions for the proposed CGEAs differ per CGEA. However, in general the common characteristics of the proposed CGEAs are the following:
- Limited to specified countries;
- Limited to certain categories listed in the EU Dual Use Regulation;
- CGEAs do not authorize export of items that have WMD-end use;
- CGEAS cannot be used for goods that are destined for free zone or free warehouse in of countries listed in the CGEAs;
- The exporter has to inform the competent authorities of the EU Member State where he is established of first use of the CGEA no later than 30 days after the date of first export;
- Obligation of the exporter to inform the purchaser before export that the items concerned cannot be re-exported to non-EU Member States of French overseas collectivity. Please note that this obligation applies only to CGEAs relating to low value shipments, computers and related equipment, telecommunications and information security and chemicals);
- EU Member States can refuse the use of CGEAs to an exporter who has been sanctioned of an export-related offence punishable by the withdrawal of the right to use these authorisations.
Comments on proposed CGEAs.
Although CGEAs could facilitate the export of dual-use items, there are some issues in the proposal that could amended in order to ensure effectiveness of the CGEAs.
During the meeting on 19 February 2009, exporters commented that the use of the proposed CGEAs seems to be very limited due to the geographical coverage of the CGEAs. The CGEA for low value shipments is, for example, limited to Argentina, Brazil, Iceland, South Africa, South Korea and Turkey. For certain CGEAs it would have been an option to include states that are participant of the international proliferation regimes, which has not been done. It can be questioned why certain countries have not been listed in the CGEAs, whereas they are participant of (certain) international proliferation regimes.
Secondly, the current proposal provides that only exporters that have obtained Authorised Economic Operators (“AEO”) - status can use the CGEA for low value shipments. This condition has not been proposed for other CGEAs. It is questionable why this condition should specifically apply for CGEAs for low value shipments and not to other CGEAs. The benefits of AEO have been subject to debate the last years. The proposal of the European Commissions shows that that there could be a benefit for companies having AEO compared to companies not having AEO in case of export of dual-use items, although the advantage of the AEO is currently limited to export of low value shipments.
Finally, it is important to note that the CGEAs can be used retroactively. The exporter has to inform the competent authorities of the first use of the CGEA no later than 30 days after the date of first export. The proposal does not define “first export”. Moreover, the proposal does not stipulate the consequences of exports carried out under the CGEA of which the use has been notified after the export of the dual-use items and whereby it turned out that the goods could not have been exported under the CGEA concerned. In this case the dual-use items have already left the customs territory of the EU but without a correct export license. The consequences for such situations will have to be stipulated in the national legislation of the EU Member States concerned.
The proposal to include six news CGEAs could facilitate the export of dual-use items. However, the practical relevance can be questioned due to the geographical coverage of certain CGEAs. It is questionable why the condition of having AEO-status is required for CGEAs for low value shipments and not for other CGEAs. Finally, the current proposal does not define the consequences of the export of dual-use items under CGEAs of which the registration has been notified retroactively, but for which the CGEA could not have been used. From the discussions during the meeting at 19 February 2009 it can be noted that the proposal is welcomed by exporters, but that changes have to be adopted in order to ensure effectiveness of the use of the CGEAs. It is not excluded that the proposed CGEAs will not be adopted in the current format.