Council Regulation (EC) No 428/2009 (2) has been substantially amended several times. Since further amendments are to be made, that Regulation should be recast in the interests of clarity, effectiveness and efficiency.
(2)
This Regulation aims to ensure that in the area of dual-use items, the Union and its Member States fully take into account all relevant considerations. Relevant considerations include international obligations and commitments, obligations under relevant sanctions, considerations of national foreign and security policy including those contained in the Council Common Position 2008/944/CFSP (3), among them human rights, and considerations about intended end-use and the risk of diversion. Through this Regulation, the Union demonstrates its commitment to maintaining robust legal requirements with regard to dual-use items, as well as to strengthening the exchange of relevant information and greater transparency. With regard to cyber-surveillance items, the competent authorities of the Member States should consider in particular the risk of them being used in connection with internal repression or the commission of serious violations of human rights and international humanitarian law.
(3)
This Regulation also aims to strengthen the guidance to be given to exporters, in particular to small and medium-sized enterprises (SMEs), regarding responsible practices, yet without impairing the global competitiveness of exporters of dual-use items or other associated industry or academia which are resident or established in a Member State.
(4)
United Nations Security Council Resolution 1540 (2004), adopted on 28 April 2004, decided that all States are to take and enforce effective measures to establish domestic controls to prevent the proliferation of nuclear, chemical or biological weapons and their means of delivery, including by establishing appropriate controls over related materials, equipment and technology. Controls are also required under relevant international agreements, such as the Convention on the Prohibition of the Development, Production, Stockpiling and use of Chemical Weapons and on their Destruction (the ‘Chemical Weapons Convention’ or ‘CWC’) and the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and On Their Destruction (the ‘Biological and Toxin Weapons Convention’ or ‘BWC’), and in line with commitments agreed upon in multilateral export control regimes.
(5)
An effective common system of export controls on dual-use items is therefore necessary to ensure that the international commitments and responsibilities of the Member States and of the Union, in particular regarding non-proliferation, regional peace, security and stability and respect for human rights and international humanitarian law, are complied with.
(6)
The EU Strategy against proliferation of Weapons of Mass Destruction of 12 December 2003 (‘EU WMD Strategy’) emphasises the Union’s commitment to strong national and internationally coordinated export controls.
(7)
The contribution of exporters, brokers, providers of technical assistance or other relevant stakeholders to the overall aim of trade controls is crucial. In order for them to be able to act in conformity with this Regulation, the assessment of risks related to transactions concerned by this Regulation is to be carried out through transaction-screening measures, also known as the due diligence principle, as a part of an Internal Compliance Programme (ICP). In that regard, in particular the size and organisational structure of exporters have to be taken into account when developing and implementing ICPs.
(8)
In order to address the risk that certain non-listed cyber-surveillance items exported from the customs territory of the Union might be misused by persons complicit in or responsible for directing or committing serious violations of human rights or international humanitarian law, it is appropriate to place the export of such items under control. Associated risks relate, in particular, to cases where cyber-surveillance items are specially designed to enable intrusion or deep packet inspection into information and telecommunications systems in order to conduct covert surveillance of natural persons by monitoring, extracting, collecting or analysing data, including biometrics data, from those systems. Items used for purely commercial applications such as billing, marketing, quality services, user satisfaction or network security are generally considered not to entail such risks.
(9)
With a view to strengthening the effective control of exports of non-listed cyber-surveillance items, it is essential to further harmonise the application of catch-all controls in that area. To that end, Member States are committed to supporting such controls by sharing information amongst themselves and with the Commission, in particular regarding technological developments of cyber-surveillance items, and by exercising vigilance in the application of such controls to promote an exchange at Union level.
(10)
In order to enable the Union to react rapidly to the serious misuse of existing technologies or to new risks associated with emerging technologies, a mechanism should be introduced to enable Member States to coordinate their responses when a new risk is identified. Such coordination should be followed by initiatives to introduce equivalent controls at the multilateral level in order to broaden the response to the identified risk.
(11)
Transmission of dual-use software and technology by means of electronic media, fax or telephone to destinations outside the customs territory of the Union should also be controlled. In order to limit the administrative burden for exporters and the competent authorities of the Member States, general or global licenses or harmonised interpretations of provisions should be provided for certain transmissions, such as transmissions to a cloud.
(12)
Considering the important role of customs authorities in the enforcement of export controls, the terms used in this Regulation should, to the extent possible, be consistent with the definitions set out in Regulation (EU) No 952/2013 of the European Parliament and of the Council (4) (the ‘Union Customs Code’).
(13)
Various categories of persons can be involved in the export of dual-use items, including natural persons such as service providers, researchers, consultants and persons transmitting dual-use items electronically. It is essential that all such persons are aware of the risks associated with the export and the provision of technical assistance regarding sensitive items. In particular, academic and research institutions face distinct challenges in export control due to, inter alia, their general commitment to the free exchange of ideas, the fact that their research work often involves cutting edge technologies, their organisational structures and the international nature of their scientific exchanges. Member States and the Commission should, where necessary, raise awareness among the academic and research community and provide them with tailored guidance to address those distinct challenges. In alignment with multilateral export control regimes, the implementation of controls should provide, to the extent possible, for a common approach with respect to certain provisions, in particular regarding the academia related de-control notes ‘basic scientific research’ and ‘public domain’.
(14)
The definition of the term ‘broker’ should be revised to include legal persons and partnerships not resident or established in a Member State and that provide brokering services from the customs territory of the Union.
(15)
The Lisbon Treaty clarifies that the provision of technical assistance involving a cross-border movement falls under Union competence. It is therefore appropriate to introduce a definition of technical assistance and to specify the controls applicable to its provision. In addition, for reasons of effectiveness and consistency, controls on the provision of technical assistance should be harmonised.
(16)
As in Regulation (EC) No 428/2009, it should be possible for Member States’ authorities to prohibit the transit of non-Union dual-use items under certain circumstances where, through intelligence or other sources, they have reasonable grounds for suspecting that the items are or might be intended, in their entirety or in part, for a military end-use in a country that is subject to an arms embargo, or for the proliferation of weapons of mass destruction or their means of delivery.
(17)
Licensing conditions and requirements should be harmonised, where appropriate, in order to avoid distortions of competition and to ensure the consistent and effective application of controls throughout the customs territory of the Union. To that effect, it is also necessary that the competent authorities of the Member States are clearly identified in all control situations. The responsibility for deciding on individual, global or national general export authorisations, on authorisations for the provision of brokering services and technical assistance, on transits of non-Union dual-use items and on authorisations for the transfer within the customs territory of the Union of dual-use items listed in Annex IV, lies with national authorities.
(18)
Guidelines for Internal Compliance Programmes should be introduced in order to contribute to achieving the level-playing field between exporters and to enhance the effective application of controls. Such guidelines should take into account the differences in sizes, resources, fields of activity and other features and conditions of exporters and their subsidiaries, such as intra-group compliance structures and standards, thereby avoiding a ‘one model for all’ approach and helping each exporter to find its own solutions for compliance and competitiveness. Exporters using global export authorisations should implement an ICP unless the competent authority considers it unnecessary due to other circumstances it has taken into account when processing the application for a global export authorisation submitted by the exporter.
(19)
Additional Union general export authorisations should be introduced in order to reduce the administrative burden on companies, in particular SMEs, and authorities, while ensuring an appropriate level of control of the relevant items to the relevant destinations. Where necessary, Member States can provide guidance to exporters regarding the application of general authorisations. Member States can also introduce national general export authorisations for low-risk exports where they consider it necessary. An authorisation for large projects should also be introduced to adapt licensing conditions to the particular needs of industry.
(20)
The Commission, in close consultation with Member States and stakeholders, should develop guidelines and/or recommendations for best practices to support practical application of controls. When preparing the guidelines and/or recommendations, the Commission should have due regard to the information needs of SMEs.
(21)
Common lists of dual-use items, destinations and guidelines are essential elements for an effective export control regime.
(22)
Member States that establish national control lists pursuant to this Regulation should inform the Commission and the other Member States of such lists. Member States should also inform the Commission and the other Member States of all decisions to refuse an authorisation for an export for which an authorisation is required on the basis of a national control list.
(23)
In order to allow for a swift Union response to changing circumstances as regards the assessment of the sensitivity of exports under Union general export authorisations as well as technological and commercial developments, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union (TFEU) should be delegated to the Commission in respect of amending Annexes I, II and IV to this Regulation. Decisions to update the common list of dual-use items subject to export controls set out in Annex I should be in conformity with the obligations and commitments that Member States or the Union have accepted as members of the relevant international non-proliferation agreements and as members of multilateral export control regimes or by ratification of relevant international treaties. Where the amendment of Annex I concerns dual-use items which are also listed in Annex II or IV, those Annexes should be amended accordingly. Decisions to update the common lists of items and destinations set out in Sections A to H of Annex II should be made having regard to the assessment criteria set out in this Regulation. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (5). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.
(24)
The Commission should publish the updates to Annex I through delegated acts in all the official languages of the Union.
(25)
The Commission should publish and keep updated a compilation of national control lists in force in the Member States in all the official languages of the Union.
(26)
National provisions and decisions affecting exports of dual-use items should be taken in the framework of the common commercial policy, and in particular Regulation (EU) 2015/479 of the European Parliament and of the Council (6). Appropriate exchange of information and consultations on national provisions and decisions should ensure the effective and consistent application of controls throughout the customs territory of the Union.
(27)
The existence of a common control system is a prerequisite for establishing the free movement of dual-use items inside the customs territory of the Union.
(28)
Pursuant to and within the limits of Article 36 TFEU and in accordance with international obligations undertaken, Member States retain the right to carry out controls on transfers of certain dual-use items within the customs territory of the Union in order to safeguard public policy or public security. The list of items subject to intra-Union transfer controls set out in Annex IV should be periodically reviewed taking into account the further evolution of the underlying international obligations, as well as technological and commercial developments as regards the assessment of the sensitivity of transfers. Decisions to update the common list of dual-use items subject to export controls set out in Annex IV should be made having regard to Article 36 TFEU, namely the public policy and public security interests of the Member States.
(29)
On 22 September 1998, the Member States and the Commission signed Protocols additional to the respective safeguards agreements between the Member States, the European Atomic Energy Community and the International Atomic Energy Agency, which, among other measures, oblige the Member States to provide information on transfers of specified equipment and non-nuclear material. Intra-Union transfer controls should allow the Union and its Member States to fulfil their obligations under those agreements.
(30)
In order to achieve uniform and consistent application of controls throughout the Union, it is appropriate to broaden the scope of consultation and information exchange between the Member States and the Commission, and to introduce tools to support the development of a common export control network throughout the Union, such as electronic licensing procedures, technical expert groups and the setting up of an enforcement coordination mechanism. It is of particular importance to ensure that exporters, brokers, providers of technical assistance and other relevant stakeholders concerned by this Regulation, including industry and civil society organisations, are consulted, where appropriate, by the Dual-Use Coordination Group and the technical expert groups.
(31)
While customs authorities share certain information with other customs authorities using a risk management system in accordance with Union customs rules, it is also appropriate to ensure close cooperation between licensing and customs authorities.
(32)
It is appropriate to clarify that, to the extent that it concerns personal data, the processing and exchange of information should comply with the applicable rules on the protection of natural persons with regard to the processing of personal data and on the free movement of such data laid down in Regulations (EU) 2016/679 (7) and (EU) 2018/1725 (8) of the European Parliament and of the Council.
(33)
Member States and the Commission should take all necessary measures to ensure the protection of confidential information in compliance with, in particular, Commission Decisions (EU, Euratom) 2015/443 (9)and (EU, Euratom) 2015/444 (10) and the Agreement between the Member States of the European Union, meeting within the Council, regarding the protection of classified information exchanged in the interests of the European Union (11). This includes, in particular, the obligation not to downgrade or declassify classified information without the prior written consent of the originator. Any non-classified sensitive information or information which is provided on a confidential basis should be handled as such by the authorities.
(34)
Outreach to the private sector, in particular to SMEs, and transparency are essential elements for an effective export control regime. It is therefore appropriate to provide for the continued development of guidelines, where necessary, to support the application of this Regulation and for the publication of a Union annual report on the implementation of controls.
(35)
The Union annual report on the implementation of controls should include relevant information on the licensing and enforcement of controls under this Regulation, with due respect to the need to ensure the protection of the confidentiality of certain data, in particular where the publication of licensing data could affect national security concerns raised by Member States or jeopardise commercial confidentiality and allow non-Union suppliers to undercut restrictive licensing decisions by Member States.
(36)
In order to ensure that this Regulation is properly applied, each Member State should take measures to give the competent authorities appropriate powers.
(37)
In accordance with the EU WMD Strategy, each Member State should determine effective, proportionate and dissuasive penalties applicable in the event of infringements of the provisions of this Regulation. It is also appropriate to introduce provisions to support the effective enforcement of controls, among other things through an enforcement coordination mechanism.
(38)
The Union Customs Code lays down, among other things, provisions relating to the export and re-export of goods. Nothing in this Regulation constrains any powers under and pursuant to the Union Customs Code and its implementing provisions.
(39)
Export controls contribute to international security and have an impact on trade with third countries. It is therefore appropriate to develop dialogue and cooperation with third countries in order to support a global level-playing field and enhance international security. In particular, Member States and the Commission should enhance their contribution to the activities of multilateral export control regimes. Member States and the Commission should also support those regimes in developing robust export controls as a global basis and model for international best practice, and an important tool for ensuring international peace and stability. Contributions should be made when a new risk has been identified by all Member States in the field of cyber-surveillance items in order to ensure a multilateral level playing field.
(40)
This Regulation applies without prejudice to the Commission Delegated Decision of 15 September 2015 supplementing Decision No 1104/2011/EU of the European Parliament and of the Council (12), which establishes specific rules for the control of the export of items for the Public Regulated Service under the Galileo Programme.
(41)
This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union,
