Proposal for a COUNCIL REGULATION amending Regulation (EC) No 1334/2000 with regard to intra-Community transfers and exports of dual-use items and technology

(presented by the Commission)

EXPLANATORY MEMORANDUM

Under Council Regulation (EC) No 1334/2000, dual-use items and technology should be subject to effective control when they are exported from the Community.

To ensure that such control was fully effective, when Regulation (EC) No 1334/2000 was adopted, Category 0 as defined in Annex I (nuclear materials, facilities and equipment) was included in its entirety in Annex IV (items requiring authorisation for intra-Community transfer) in order to enable the Member States and the EU to comply with their international commitments, particularly within the NSG.

On 22 September 1998 representatives of the Member States and the Commission signed protocols additional to the respective safeguard agreements between the Member States, the European Atomic Energy Community and the International Atomic Energy Agency (IAEA), which, among other measures, oblige the Member States to provide information on specified equipment and non-nuclear material, and in particular to notify transfers of such goods.

Responsibility for notifying the IAEA of transfers of the specified equipment and non-nuclear material rests with the Member States, while under the Euratom Treaty the Commission alone is competent to supply information regarding nuclear materials..

Accordingly, under Annex III to the additional protocols the task of notifying the IAEA of intra-Community transfers of such materials falls to the Community.

However, Regulation (EC) No 1334/2000 makes no distinction between obligations relating to the specified non-nuclear materials and equipment and those relating to nuclear materials. It has since become apparent that intra-Community controls on non-sensitive nuclear materials under Regulation (EC) No 1334/2000 are hampering trade without improving the level of protection already conferred by the Euratom Treaty.

Furthermore, not only is the intra-Community licensing procedure for these materials redundant (since operators send information about transfers direct to Euratom's safeguards office, which then forwards it to the IAEA), it is incompatible with the principle of free movement of nuclear materials under the Euratom Treaty.

In the 1984 Dublin Declaration on common policy, however, the Member States acknowledged the need for intra-Community controls on transfers of goods regarded as particularly sensitive in the context of weapons non-proliferation, including certain special fissile materials (item 0C002), viz separated plutonium and "uranium enriched in the isotopes 235 or 233" to more than 20%. Controls on these goods should remain in place.

The following, therefore, can be taken out of Annex IV: the whole of 0C001; part of 0C002, taking into account the particularly sensitive nature of special fissile materials, for which controls must remain in place; and items 0D001 and 0E001, insofar as they relate to decontrolled items, i.e. the whole of 0C001 and part of 0C002.

Amending Annex IV in this way necessitates a corresponding change in Part 2 of Annex II on the Community General Export Authorisation, otherwise categories 0C001, 0C002 (in part), and 0D001 and 0E001 (insofar as they relate to the first two), no longer falling under Annex IV, would qualify for the general authorisation procedure and would no longer be subject to controls when transferred to the non-EU countries listed in Part 3 of Annex II. This would be in breach of the undertakings given by Member States individually within the NSG. To avoid such a situation, it is therefore necessary to list items 0C001 and 0C002 (in part), and 0D001 and 0E001 (insofar as they relate to the first two) individually in Part 2 of Annex II, since they have been taken out of Annex IV.

Commission proposal

In the light of the above considerations it is necessary :

(a) to remove from Annex IV item 0C001 ("natural uranium" or "depleted uranium" or thorium in the form of metal, alloy, chemical compound or concentrate and any other material containing one or more of the foregoing);

(b) to remove part of the coverage of item 0C002 (special fissile materials) from Annex IV, in line with the 1984 Dublin Declaration [1] which imposed restrictions on intra-Community trade in two types of such materials: separated plutonium and "uranium enriched in the isotopes 235 or 233" to more than 20%. These will continue to require an authorisation for intra-Community transfer;

[1] "On 20 November 1984 the foreign ministers of the Community adopted a Declaration of Common Policy which was subsequently taken over by Austria, Finland, Portugal, Spain and Sweden. It covers in particular arrangements for the transfer between Member States of separated plutonium and uranium enriched to more than 20% in the isotopes 235 or 233 and the transfer of installations, principal components of crucial importance, reprocessing or enrichment technology or the technology of heavy water production".

c) to remove from Annex IV part of the coverage of items 0D001 and 0E001 insofar as they relate to 0C001 and (part of) 0C002, which no longer fall under Annex IV;

d) to insert in Part 2 of Annex II items 0C001 and (part of) 0C002 and 0D001 and 0E001 (insofar as they relate to the first two).

2000/0300 (ACC)

Proposal for a COUNCIL REGULATION amending Regulation (EC) No 1334/2000 with regard to intra-Community transfers and exports of dual-use items and technology

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof,

Having regard to the proposal from the Commission [2],

[2] OJ C..., ..., p. ...

Whereas:

(1) Under Council Regulation (EC) No 1334/2000 of 22 June 2000 setting up a Community regime for the control of exports of dual-use items and technology, [3] dual-use items and technology should be subject to effective control when they are exported from the Community.

[3] OJ L 159, 30.6.2000, p.1.

(2) In order to enable the Member States and the EU to comply with their international commitments, particularly within the NSG (Nuclear Suppliers' Group) Category 0 as defined in Annex I to that Regulation (nuclear materials, facilities and equipment) was included in its entirety in Annex IV (items requiring authorisation for intra-Community transfer).

(3) It has since become apparent that intra-Community controls on non-sensitive nuclear materials under Regulation (EC) No 1334/2000 are hampering trade without improving the level of protection already conferred by the Euratom Treaty. The controls imposed on such materials should therefore be abolished.

(4) In the 1984 Dublin Declaration on common policy, however, the Member States acknowledged the need for intra-Community controls on transfers of goods regarded as particularly sensitive in the context of weapons non-proliferation. Controls on certain special fissile materials under item 0C002 (separated plutonium and "uranium enriched in the isotopes 235 or 233" to more than 20%) should therefore remain in place.

(5) Regulation (EC) No 1334/2000 should be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1334/2000 is amended as follows:

1) The following three indents are inserted in Part 2 of Annex II after the first indent:

"- 0C001 "natural uranium" or "depleted uranium" or thorium in the form of metal, alloy, chemical compound or concentrate and any other material containing one or more of the foregoing;

- 0C002 "special fissile materials" other than those specified in Annex IV.

- 0D001 (software) and 0E001 (technology) insofar as they relate to materials of 0C001 ("natural uranium" or "depleted uranium" or thorium in the form of metal, alloy, chemical compound or concentrate and any other material containing one or more of the foregoing) or 0C002 special fissile materials other than those specified in Annex IV."

2) In Part II of Annex IV the words "All Category 0 of Annex I is included in Annex IV" are replaced by:

"All Category 0 of Annex I is included in Annex IV except for the following materials:

- 0C001: this item is not included in Annex IV;

- 0C002: this item is included in Annex IV only as it relates to the following special fissile materials:

a) separated plutonium;

b) "uranium enriched in the isotopes 235 or 233" to more than 20%

- 0D001 (software) and 0E001 (technology) are included in Annex IV except insofar as they relate to decontrolled items, i.e. all of 0C001 and the part of 0C002 not covering the following special fissile materials: separated plutonium and "uranium enriched in the isotopes 235 or 233" to more than 20%."

Article 2

This Regulation shall enter into force on the fifth day following its publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

FINANCIAL STATEMENT

1. TITLE OF OPERATION

2. BUDGET HEADING(S) INVOLVED: A-7030

3. LEGAL BASIS : Article 133 of the EC Treaty

4. DESCRIPTION OF OPERATION :

4.1 General objective : Technical amendment of annexes II and IV to Council Regulation (EC) No 1334/2000 (dual-use)

4.2 Period covered and arrangement for renewal.

Indefinite

5. CLASSIFICATION OF EXPENDITURE OR REVENUE : not applicable

6. TYPE OF EXPENDITURE OR REVENUE : not applicable

7. FINANCIAL IMPACT : not applicable

8. FRAUD PREVENTION MEASURES : not applicable

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS : not applicable

10. ADMINISTRATIVE EXPENDITURE (SECTION III, PART A OF THE BUDGET)

This section of the financial statement must be sent to DGs XIX and IX; DG IX will then forward it to DG XIX with its opinion.

Actual mobilisation of the necessary administrative resources will depend on the Commission's annual decision on the allocation of resources, taking into account the number of staff and additional amounts authorised by the budget authority.

10.1 Effect on the number of posts

>TABLE POSITION>

If additional resources are required, indicate the pace at which they will have to be made available.

10.2 Overall financial impact of additional human resources

(EUR)

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The amounts given must express the total cost of additional posts for the entire duration of the operation, if this duration is predetermined, or for 12 months if it is indefinite.

10.3 Increase in other administrative expenditure as a result of the operation

(EUR)

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The amounts given must correspond to the total expenditure arising from the operation if its duration is predetermined or expenditure for 12 months if it is indefinite.