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European Export Control Update

European Export Control Update. Naboth van den Broek Boston, 31 May 2012. EU Export Control Regime - Overview Dual-Use Goods & Technology Military Goods & Technology Sanctions Recent Developments / Update. National rules (27 Member States) Defense & Security= MbS prerogative

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European Export Control Update

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  1. European Export Control Update Naboth van den Broek Boston, 31 May 2012

  2. EU Export Control Regime - Overview • Dual-Use Goods & Technology • Military Goods & Technology • Sanctions • Recent Developments / Update

  3. 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 1. EU Export Control: Overview

  4. 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)

  5. 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

  6. 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”)

  7. 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

  8. 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

  9. Key Regulatory and Other Developments

  10. 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

  11. Dual-use: EU Green Paper on Dual-Use Goods • Proposed Reform: Amendment expected toward end-2012 • Key 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

  12. 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

  13. 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)

  14. 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)

  15. 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 ?)

  16. Thank you for your attention! • Naboth van den Broek • naboth.vandenbroek@wilmerhale.com

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