BLOMSTEIN | Roland M Stein | Laura Louca
General restrictions
What restrictions apply in relation to the trade of goods, technology and services?
There are various trade-restricting, especially export-restricting, regulations within EU law. These regulations are directly applicable in EU member states without further implementing acts. The member states are responsible for the administrative enforcement of those regulations. The following is a brief description of the most relevant restrictions.Regulation (EU) 2021/821 (Dual-Use Regulation Recast)
The Dual-Use Regulation covers the export of goods that can be used for both civilian and military purposes (eg, certain chemicals, machines, technologies and software). The Dual-Use Regulation implements the international Wassenaar Arrangement (WA), the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group (NSG), the Australia Group and the Chemical Weapons Convention. According to article 3 of the Dual-Use Regulation, the export of all goods listed in Annex I Dual-Use Regulation is subject to authorisation. For goods not listed under Annex I, restrictions may still apply under certain circumstances, such as potential use for nuclear purposes or potential military use in a country subject to an arms embargo.
The EU member states also maintain their own lists of dual-use goods. For example, in Germany, Part I section B AWV lists additional dual-use goods whose export must be approved by the relevant authority.Regulation (EC) 258/2012 (Firearms Regulation)
This regulation lays down the licensing requirements and principles of the licensing procedure for the export of firearms, their parts, essential components and ammunition listed in Annex I to this regulation.Regulation (EC) 2019/125 (Anti-Torture Regulation)
The Anti-Torture Regulation prohibits exports and imports of goods that have no practical use other than capital punishment or torture and other cruel, inhumane or degrading treatment or punishment. It also imposes an authorisation requirement for goods that could potentially be used for the same purposes as above (potential torture or capital punishment goods).
Military Equipment and War Weapon Regulation: The term ‘military equipment’ generally covers goods that are primarily or exclusively used for military purposes, namely, weapons and ammunition of all kinds as well as accessories, spare parts or mounting devices for weapons, armoured vehicles, protective devices or clothing as well as relevant software or technologies. The Council Common Position 2008/944/CFSP defines common rules governing the control of export of military technology and equipment. The position further sets out guidelines for EU member states on effective arms export control and on the review of applications for export licences for items on the Common Military List.
Under article 346(1)(b) TFEU, member states can also issue measures regarding the trade of weapons, munition and war material. Many EU member states have used this provision, issuing national export lists on military equipment (eg, Part I section A AWV). These lists usually correspond with the European Common Military List and also include technology relating to the equipment.
In addition, several sanctions regulations make explicit reference to specific sectors whose trade is to be restricted under the regulation.General exemptions
Do any exemptions apply to the general trade restrictions?
There are different types of general exceptions applicable to EU trade restrictions. There are exemptions relating to the scope of application of regulations or the authorisation requirement. Examples of these include:
- article 8(3) of the Dual-use Regulation, which excludes the restrictions on technical assistance under certain circumstances, for example, the technical assistance is provided by authorities or agencies of a member state in the context of their official task;
- article 3 of the Firearms Regulation, which excludes state-to-state transactions or state transfers; and
- article 9(1)(a)(i) of the Firearms Regulation, which provides an exemption from the authorisation requirement for temporary export by hunters or sport shooters as part of their accompanied personal effects.
There are also exemptions in the form of EU and member state general export authorisations, which apply under specific circumstances. A general export authorisation is issued ex officio and has the effect of automatically authorising all exports that meet the established requirements. It is valid for everyone without prior application. However, companies must evaluate, at their own risk, whether their proposed exports are covered by the general authorisation. Additionally, they are obliged to notify the competent national authority about the envisaged export of goods under the general authorisation. The EU has issued several general export authorisations such as general export authorisation EU001 for goods under Annex I of the Dual-Use Regulation or EU006 regarding certain chemicals under the Dual-Use Regulation.Targeted restrictions
Have the authorities in your jurisdiction imposed any trade sanctions against dealing with any particular individuals or entities?
The imposition of trade sanctions against dealing with any particular individuals or entities generally falls within the jurisdiction of the EU. The EU provides for a Consolidated Financial Sanctions List. This list contains all persons, entities and bodies subject to financial sanctions under EU law. However, the list does not include those persons, organisations and institutions that are not subject to a comprehensive ban on making funds available, but to restrictions that are only limited to certain areas. In addition, the EU Sanctions Map offers the possibility to check personal restrictions. The EU Sanctions Map covers all persons, entities and bodies listed in the annexes to the embargo regulations, and not only those subject to comprehensive bans on making funds available.Licensing – scope
In what circumstances may the competent sanctions authorities in your jurisdiction issue a licence to trade in goods, technology and products that are subject to restrictions?
The licences to trade are issued on a case-by-case basis. The authorities consider all circumstances of the individual case. For these purposes, the final recipient, the political situation in the recipient country and the potential for misuse of the respective goods are taken into account.Licensing – application process
What is the application process for a licence? What is the typical timeline for a licence to be granted?
As a part of the administrative enforcement of the regulations, the application process for a licence follows the national system of the respective member state of the EU. Although the member states strive for a more uniform approach, the process and timeline greatly differ from state to state.
Most European countries have implemented a process to submit the application electronically (eg, the ELAN-K2 Export Portal by the German authorities).
Authorities often ask for a designated person responsible for the export and information on profiles of the companies involved in the transaction as well as their websites. In addition, the authorities usually request an end-user certificate and a technical description of the goods to be exported.
The duration of the approval process depends on the circumstances of each individual case (ie, type of goods, country of destination, end user or end use). In the case of exports to ‘sensitive’ countries, the process may take longer. This is because a more intensive investigation and, if necessary, the involvement of relevant ministries and other bodies is required. Practical experience indicates that in straightforward cases, a processing time of two to six weeks is common. In particularly critical cases, the process, however, can also take up to several months.Approaching the authorities
To what extent is it possible to engage with the competent sanctions authorities to discuss licence applications or queries on trade sanctions compliance?
In general, national authorities within the EU adopt a low-key approach to dealing with export authorities. It is therefore possible, advisable and very common to contact the competent authorities at an early stage to discuss licence applications or queries on trade sanctions compliance. Particularly in the case of exports of military equipment and dual-use goods, it is advisable to carry out the application procedure in close contact with the competent authorities by ensuring the greatest possible transparency, thereby demonstrating the reliability of the exporter and ensuring compliance with both national and European export control law.
This article first appeared on Lexology | Source
