Export Controls and CSU Export Control Administrator [email protected].
C5 Export Controls 10 & 11 March 2009 Final London
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Transcript of C5 Export Controls 10 & 11 March 2009 Final London
What you need to know about EU Export Controls now
C5 3rd Annual Export Controls ConferenceLondon, 10 & 11 March 2009
Jasper Helder, partner Trade & CustomsBird & Bird LLP
2
Agenda
EU legislative frameworkDual Use
Current requirements
Recast (?)
Implementation
3
EU Overview
4
EU Policies (1)
Defense and security policy: national prerogative
Intergovernmental EU co-operation since 1970
Formalised in 1986 in Single European Act
EU Maastricht Treaty (1 November 1993): EU Common Foreign and Security Policy (“CFSP”) embedded in EU Treaty
5
EU Policies (2)
International Arrangements
Wassenaar Arrangement (“ Munitions List”)
Missile Technology Control Regime (“ MTCR”)
Nuclear Suppliers Group
Australia Group (non-proliferation of chemical & biological weapons)
Chemical Weapons Convention
Membership: mainly EU countries individually (e.g. EU observes in Wassenaar)
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EU Export Controls Overview
Dual Use Goods & TechnologyCommon EU Rules
National Additions
Military Goods & Technology Defence Policy is not EU authority
National Rules
Common EU Policy (Military List, Licensing Code)
Overlaps: from Dual Use to Military on national level
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EU Dual Use Controls, Current Status
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EU Export Controls: Dual Use (1)
Common regime: Regulation (EC) 1334/2000
Lastly amended by Regulation (EC) 1167/2008Annex I updated for changes made by Wassenaar Arrangement (2007), Missile Technology Control Regime (2007) and Australia Group (2007 and 2008)
Annex IV also updated (now includes certain detonation devices)
No substantive amendments of the rules themselves
9
EU Export Controls: Dual Use (2)
EU Regulation is not exhaustive
National legislation EU Member StatesControl lists (National “Catch All” additions)
Sanctions and related control lists
Application procedures for export licences
Dual Use Export Controls extend to some Military Goods as well
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EU Export Controls: Dual Use (3)
Exports of Goods subject to licensing (1)
Export of “dual-use” goods/ technology to non-EU countriesAnnex I of Regulation (EC) 1334/2000
National “Catch All”: Non-Annex I WMD items “May be” intended for use related to chemical, biological, nuclear weapons
Discretion of National Authorities
11
EU Export Controls: Dual Use (4)
Exports of Goods subject to licensing (2)
National “Catch All”: Non Annex I Military Use items for embargoed countries
Destination subject to UN, EU or OSCE embargo
Military end-use (incl. manufacturing, maintenance etc. of Military List items)
As per EU export country national Military List
Discretion of National Authorities
National “Catch All”: Prior Irregular Exports Items for use in products exported without or contrary to prior export license
Discretion of National Authorities
Exporter must notify “catch all” circumstances to authorities
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EU Export Controls: Dual Use (5)
Exports of Goods subject to licensing (3)
National Catch-All (article 5)Prohibition of export or licensing requirement for non-Annex I goods/technologies
Public security
Human rights
Discretion of National Authorities
13
EU Export Controls: Dual Use (6)
Intra-EU transfers of Goods subject to licensing
Certain “sensitive” goods and technologyAnnex IV of Regulation (EC) 1334/2000
If implemented by national laws: intra EU transfer for subsequent export without additional processing
art. 21 para 2 EU Dual Use Reg
UK, Germany
Others
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EU Export Controls: Dual Use (7)
No license required for transit through the EU
External transit (“T1 status”)
Storage in free zone or free warehouse where no storage records are required
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EU Export Controls: Dual Use (8)
Intangible Exports of Technology subject to license
Technology: specific information necessary for the Development, Production or Use of goods, incl. Technical Assistance.
Export = transmission of data re. Controlled technologies to non-EU destination
Electronic media
Fax
Telephone (descriptive discussion of technology)
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EU Export Controls: Dual Use (9)
No license required for intangible exports of Technology
Data in the Public DomainMade available without further dessimination restrictions
Basic Scientific ResearchExperimental, theoretical, not primarily directed towards specific objective/aim
Minimum necessary information for patent applications
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EU Export Controls: Dual Use (10)
Cross border projects involving multiple EU countries
License application in EU country where contractual exporter is established
Indicate location of other goods/technologies in application
Consultation between EU country that receives application and other EU countries
Objections must be raised within 10 working daysMay be extended in ‘exceptional cases’Objections are binding: one EU country refuses no license granted!No response: consent is deemed given
18
EU Dual Use Controls, Recast (?)
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EU Dual Use: Recast (1)
UN Security Council Resolution 1540, 2004
All States shall take and enforce effective measures to prevent proliferation of nuclear, chemical, or biological weapons, means of delivery, related materials
effective measures to account for and secure such items in production, use, storage or transport;
effective physical protection measures;
effective border controls and law enforcement efforts to detect, deter, prevent and combat, illicit trafficking and brokering
effective national export and trans-shipment controls, including controls of export, transit, trans-shipment and re-export and funds and related services such as finance and transport, end-user controls; appropriate criminal or civil penalties for violations
20
EU Dual Use: Recast (2)
“Peer review” of national implementation of Dual Use Reg. 133/2003, resulting in recommendations to Council (General Affairs and External Relations) in December 2004
Impact Assessment of certain proposed changes as from October 2005, results published in February 2006
Proposal: COM(2006) 828 final, December 2006 for Recast of Dual Use Reg.
Proposal: COM(2008) 854 final, December 2008 for 6 types of new General Community Licenses
26 January 2009: Meeting DG Trade & exporters
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EU Dual Use: Recast (3)
Intangible Exports
Currently: Transmission of controlled technology to non-EU destination
Recast: Transmission of software or technology or the provision of technical assistance, by electronic media, fax, telephone to a destination outside the EU, including making available in an electronic form such software, technology or technical assistance
Clarification Commission 26 January 2009: Transit of software, technology or technical assistance on carrier medium can be subject to transit controls
“Technical Assistance” does not include services provided by EU persons outside EU (covered by Joint Action CFSP 401/2000)
22
EU Dual Use: Recast (1)
Brokering Controls
Brokering for Dual-Use currently not covered on EU level
“Intermediation services”Negotiating or arranging purchase, sale or supply of Annex I items from 3rd country to 3rd countryBuying, selling, supplying Annex I items from 3rd country to 3rd country
License is required ifRelevant person is notified by national authorities or himself has grounds to suspect WMD use (incl. for delivery means)
Clarification Commission 26 January 2009:“Intermediation Services” include typical brokering activities, but can also include transportation services and finance
23
EU Dual Use: Recast (4)
Transit Controls
Currently Dual Use Reg. does not apply to transit
National authorities can intercept goods in transit for inspection
National authorities can confiscate such goods if:There are reasonable grounds to suspect
Goods are or may be intended for illegal proliferation or to endanger international security
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EU Dual Use: Recast (5)
Community General Export Authorisation
Currently, most EU countries require registration under national rules
Proposal: registration as per Dual Use RegulationMay also be done 30 days after export
CGEA can not be applied when:Exporter is notified of or aware of possible Military or WMD use
Goods are destined for free zone or free warehouse in of the 7 CGEA countries
Then: export license application shall be examined as if for individual specific license
25
EU Dual Use: Recast (6)
Intra EU transfer of “sensitive” items
Currently, intra EU transfer of Annex IV items requires license
Proposal: Pre-transfer notificationBy supplier to his national authorities, no later than 8 days in advance
Supplier must register with national authorities
Information to be provided as per Part II of Annex V
Shippers’ authorities will notify national authorities EU destination country
Transfer can be suspended if:
Incomplete pre-transfer notice/supplier not registered
Serious reasons to consider transfer against EU or national security interests
26
EU Dual Use: Recast (7)
Licensing criteria:
Currently: obligations of EU countries under non-proliferation regimes, EU CFSP and/or other sanctions & embargoes (UN etc.)
Proposal: Exporters Internal Compliance Program = relevant factorGlobal License applications
Intermediation Services applications
EU countries favour no connection between licensing & ICP
Sounding procedure for national “catch all”National authorities must reply in 20 working days to query whether license is needed for exports of non-Annex I items
27
EU Dual Use: Recast (8)
Recordkeeping
Currently: in accordance with the practice in force in the respective EU country Commercial documents such as invoices, manifests and transport documents containing sufficient information to identify:
the description of the dual-use itemsthe quantity of the dual-use itemsthe name and address of the exporter and of the consigneewhere known, the end-use and end-user of the dual-use items
Proposal: extends recordkeeping obligation for:Intra-EU transfer of “sensitive” itemsIntangible Exports & Intermediation Services
nature of the items, technology or software the period during which the items were transferred/subject of provision of intermediation services destination of the transfers.
Proposal: maintains period of 3 years after export
During 26 January 2009 conference, Commission re-emphasised current obligations to state ECCN and Controls on commercial documents
28
EU Dual Use: Recast (9)
Criminal Penalties
Currently: obligation on EU countries take appropriate measures to ensure proper enforcement, in particular ‘effective, proportionate and dissuasive’ penalties
Proposal extends this to ensure criminal enforcement of serious offences
Intentional export violations for WMD & delivery means
Forgery of documents & omissions of information to obtain licenses
29
EU Dual Use: Recast (10)
ComitologyCurrently: informal group of EU country experts to discuss issues re. Application of Dual Use Reg. and exchange information
Proposal: Comitology for Dual Use Reg.Limitations in respect of: Penalties (national criminal statutes) and Licensing for EU financed projects
Advantage: access to documentation, more transparancy
International Co-operationCommission can negotiate with 3rd countries re. Mutual recognition of export controls
In particular to eliminate 3rd country licensing requirements for the reexport of dual-use items within the EU
Will the US give up re-export licensing under EAR ?
30
EU Dual Use: Recast (10)
Comments sought from industryUse of global licenses by EU countries/3rd countries as trade facilitation tool
Use of global licenses by US
General Comments on Recast (mid-March 2009)
31
EU Dual Use: Recast (11)
Way forwardUncertain (time frame ?)
EU countries appear to prefer national regulation
But: pressure from industryDiverging ECCN interpretations
Diverging licensing criteria
Diverging time limits for licensing processing (not covered in Recast)
Enforcement (criminal) is national prerogative
32
EU Dual Use Controls, Implementation
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Implementation (1)
Common feature: Export of listed goods/technologies is prohibited
Listed: EU Dual Use RegMay be supplemented on national level
May be supplemented by EU Sanctions regulations
“Catch all” decisions on national level
Unless licensed by national administrationCategories of licenses are specified in EU Dual Use Reg
Additional (reporting and other) requirements may be imposed in licenses
Unlicensed export/non-compliance with license conditions commonly defined as criminal offence
34
Implementation (2)
Transparency of administration varies substantiallySome EU countries provide published guidance (e.g. UK, Germany, France), some do not (e.g. Belgium, Italy)
Concrete licensing criteria Controlled or “of concern” entities/individual listsPublished standardised license conditions (e.g. UK)“Catch all” additions to EU Dual Use control list may or may not be publishedSome EU countries provide for institutionalised “control status” verification procedures (e.g. UK “rating enquiry”)License application processing time varies between EU countries
Sophistication/experience of administration varies substantiallyVery rough disctinction between EU countries with substantial defense industry and othersInformed Compliance attitude vs. Enforced Compliance attitudeAdministration resources vary between EU countries
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Implementation (3)
Licensing approach variesSome EU countries: emphasis on global licenses & ICP
Some EU countries: emphasis on individual specific licenses
8 Member States have created "National General export authorisations“10 in force in Austria
3 in force in France
1 in force in Italy
5 in force in Germany
1 in Greece
10 in Sweden
1 in Netherlands
more than 10 in UK (OGEL, standardized conditions)
36
Implementation (4)
Enforcement (currently, EU countries appear to prefer emphasis on criminal enforcement)
National administrations may have duty to report violations to Prosecuting Authorities
May impede voluntary disclosures
Prosecuting Authorities may not have discretion to refrain from prosecutionTransparancy varies between EU countries
Guidelines for prosecution not commonly established or publicly avialableNo public reporting on concrete cases in most EU countriesWhere settlements occur, these are not commonly publishedWhere settlement is possible, no published guidelines for amounts/measures
In some EU countries, legal entities can not be prosecuted for export controls violations, only individuals
Legal representatives (appointed directors/officers) liable q.q. (e.g. Italy)Company staff directly involved in relevant transactions (most EU countries)
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Questions ?
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Thank you for your attention
Jasper Helder
Bird & Bird LLP
T + 31 70 353 89 24
M + 31 6 46 17 94 82
W www.twobirds.com/customs