New Export Rules On Dual-use Goods

On 22 June 2000, the EU Council adopted a new EU regime for exports of dual-use goods, which will take effect from October this year (Council Regulation (EC) No. 1334/2000, OJ L159, 30.06.2000).

Dual-use goods are goods, including software and technology, which can be used for both civilian and military purposes. Whereas, for security reasons, military equipment and hardware are not subject EC rules, trade in dual-use goods comes within the EC’s common commercial policy. This new Regulation replaces existing EU rules on exports of dual use goods, which were commonly recognised as being so weak as not to provide any effective degree of harmonisation of exports controls (hence customs officials and industry having to deal with 15 different kinds of export licences).

The new regime consolidates the EU common list of dual use goods and introduces a new single General Community Licence. This licence will be used for the authorisation of exports of all EU-listed dual use goods exported to ten non-EU countries (USA, Canada, Japan, New Zealand, Australia, Norway, Switzerland, Poland, Hungary and the Czech Republic). Furthermore, authorisations between Member States will be abolished.

The introduction of the General Community Licence will certainly be welcomed by both customs officials and Indus-try. However, a number of problems with the previous regime have still not been effectively addressed. Firstly, the list of dual use goods in Annex I of the Regulation is still extremely broad, covering for example textile materials such as Gore-Tex and a broad range computer software and technology products. Secondly, the new export regime will apply to the transmission of software or technology by electronic means, fax or even telephone. Thirdly, the Annex I list is not exhaustive and national export bodies will still be entitled to require authorisation for export of non-listed goods to all or certain destinations. Therefore, where there is any degree of doubt, it will still be necessary for exporters to contact the national export authorisation bodies. The contact points for the relevant authorities are published by the Commission (see OJ C334, 12.12.1995).

An interesting issue that has also arisen in discussions on the new regime is the extra-territorial application of US regulations on dual-use goods. At present European companies are required to ask US authorities for an export licence to sell a product anywhere in the world if 10% of its components are "sensitive" and of US origin. Violation of these rules can mean companies being fined and denied access to US suppliers and the US market. European exporters have asked the Commission to put pressure on the US not to apply these regulations to companies established in Europe.