Communication from the Commission on the review of the EC regime of controls of exports of dual-use items and technology {COM(2006) 829} {SEC(2006) 1696}
Date: 2006-12-19
Institutions: European Commission
Subjects: customs regulations, dual-use good, export monitoring, technology transfer

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.12.2006 
COM(2006) 828 final 

COMMUNICATION FROM THE COMMISSION 

ON THE REVIEW OF THE EC REGIME OF CONTROLS OF EXPORTS OF DUAL-
USE ITEMS AND TECHNOLOGY 

{COM(2006) 829} 
{SEC(2006) 1696} 

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COMMUNICATION FROM THE COMMISSION 

ON THE REVIEW OF THE EC REGIME OF CONTROLS OF EXPORTS OF DUAL-
USE ITEMS AND TECHNOLOGY 

Context and objective of the proposals 

EXECUTIVE SUMMARY 

Controls of exports of dual use items and technology play a key role in the fight against the 
proliferation of weapons of mass destruction (WMD). They are destined to avoid that goods 
or technologies otherwise used for peaceful purposes (called dual-use items) can reach states 
that  can  utilize  them  for  proliferation  programmes,  or  organisations  that  could  use  them  for 
terrorist or military purposes. 

In the aftermath of the attacks of 11 September 2001, the international community identified 
controls  of  dual  use  goods  and  technologies  as  one  of  the  key  aspects  in  the  fight  against 
proliferation and intensified work destined to reinforce them. Thus, the UN Security Council 
adopted Resolution 1540 in 2004, which called for the generalisation of export controls and 
for introduction of controls on transit and brokerage of dual use items. The EU Action Plan 
and Strategy against the proliferation of WMD, adopted by the European Council respectively 
in June and December 2003, called for a series of concrete measures to strengthen controls, 
including  the  provision  of  criminal  sanctions  for  export  controls  infringements.  They  also 
called for a review of the functioning of the controls applied by Member States, which was 
carried  out  in  2004  and  2005  and  which  identified  a  number  of  areas  where  improvements 
could  be  introduced;  it  was  followed  by  intensive  discussions  with  Member  States  and  the 
consultation of EU industry on possible measures to improve the EU export control regime. 

Dual use items comprise a very wide range of goods and  technologies,  such  as  chemical or 
biological products, nuclear technologies, optical and laser and material used in avionics, or 
certain software. These are high value added goods and technologies, in which EU industry 
has  a  competitive  edge.  The  EU  policy  in  this  area  has  to  find  the  right  balance  between 
protecting security and avoiding  proliferation  of  WMD  on  the one hand, and  promoting the 
competitiveness  of  EU  industry  and  the  maintenance  and  creation  in  the  EU  of  high 
technology jobs.  

In  the  light  of  the  preparatory  work  carried  out  over  the  last  two  years,  the  Commission  is 
presenting a proposal for a recast of the Council Regulation on controls on exports of dual use 
goods and technologies (Council Regulation (EC) No 1334/2000), together with a number of 
proposals for non-legislative action. These proposals have a triple objective: 

•  to improve security by making export controls more effective, in the context of an enlarged 

European Union of 25, and soon 27, Member States 

•  to  provide  a  more  friendly  regulatory environment  for  business in order to promote their 
international competitiveness, by introducing more clarity in the EU export control regime, 
reducing regulatory burdens in the implementation of controls by EU exporters, ensuring a 
more consistent and homogeneous application of the EU export control regulation across 
the EU, and facilitating trade within the internal market 

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•  to promote greater coordination of export controls at international level. 

Summary of the proposals 

A  number  of  proposals  for  the  amendment  of  the  Dual  Use  Regulation  will  increase  the 
effectiveness of controls in order to provide better security, such as: 

•  in compliance with UN Security Council Resolution 1540, certain controls will be applied 
to goods in transit within the EU, and controls will be introduced on brokerage activities 
when they concern goods or technologies that can be used in a WMD programme 

•  Member  States  shall  provide  for  the  application  of  criminal  sanctions  for  serious  export 

control offences 

•  improving the exchanges of information among Member States and with the different parts 

of their Administrations 

•  providing  for  adequate  review  opportunities  in  case  a  Member  State  intends  to  authorise 
exports that another Member State considers contrary  to its essential security interests or 
that have been previously refused by another Member States. 

•  Improving  the  cooperation  among  Member  States  regarding  the  application  of  national 

controls on non-listed items. 

Other proposals for amendment to the Dual Use Regulation will result in a better regulatory 
environment  for  EU  industry  and  both  facilitate  their  activity  within  the  EU  and  promote 
their international competitiveness, such as: 

•  replacement of the current prior authorisation requirements applied on intra-EU transfers of 
certain items with a prior notification requirement, which would still enable Member States 
to block undesirable transfers 

•  clarification of certain provisions of the regulation, such as regarding intangible transfers 

of technology, which are currently applied in a different way by Member States 

•  statement of the principle that legal security should be provided to bona fide EU exporters 
who  have  carried  out  exports  from  the  EU  in  conformity  with  EU  export  control 
regulations, in case such exports are considered illegal by a third country, and call for such 
situations to be handled via greater cooperation with third countries 

•  promotion  of  the  use  of  global  licences  based  on  greater  reliance  on  internal  controls 
applied  by  enterprises,  and  greater  recourse  to  Community  and  national  general  export 
authorisations 

•  provision for the establishment by Member States of indicative deadlines for the handling 

of applications for export authorisation. 

It  is  also  proposed  to  achieve  greater  consistency  in  the  application  of  the  Regulation  by 
Member States via the adoption of guidelines or best practices for its implementation. 

Finally,  a  number  of  proposals  are  destined  to  promote  greater  coordination  of  export 
controls  at  international  level,  such  as  a  closer  coordination  of  EU  positions  in  the 

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international  export  control  regimes,  a  better  involvement  of  EU  industry  for  the 
determination of items to be subject to controls, and ensuring membership of all EU Member 
States in the regimes. The Commission has also set up a programme of technical assistance to 
help third countries to set up adequate export control regimes. The proposal for the Regulation 
includes  a  clause  providing  for  the  negotiation  of  agreements  with  third  countries  on  the 
mutual recognition of export controls, and a provision establishing the possibility of adopting 
ad-hoc export control procedures for EU research programmes and other projects where third 
countries are involved. 

Finally, the Commission proposes the introduction of a regulatory committee in particular for 
the introduction of amendments to the annexes of the Regulation, which contain the lists of 
controlled  items  and  other  technical  provisions.  This  procedure,  according  to  which  the 
Commission  would  adopt  these  amendments  after  obtaining  the  favourable  opinion  of  a 
committee  composed  of  Member  States,  would  enable  a  speedier  update  of  the  list  of 
controlled  items,  which  at  present  require  a  Council  decision  on  the  basis  of  a  Commission 
proposal. 

Next steps 

Although part of the European Community's common commercial policy, export controls of 
dual  use  goods  and  technologies  play  a  role  in  the  EU  security  policy,  and  is  related  to 
sensitive  policies  such  as  the  fight  against  the  proliferation  of  WMD.  In  this  area,  the 
Commission  intends  to  continue  working  very  closely  with  Member  States  so  that  the  EU 
export  controls  system  provides  the  contribution  to  European  and  world  security  that  its 
citizens  expect,  and  a  regulatory  environment  which  is  favourable  to  the  development  of 
research and industrial activity that European business needs to prosper. 

The Commission calls for a speedy examination of the proposals so that the Council adopts 
promptly the proposal for recast of the Dual Use Regulation and for action to be taken in the 
other areas for which no regulatory proposals have been made. 

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DRAFT COMMISSION COMMUNICATION ON THE REVIEW OF THE EC 
REGIME OF CONTROLS OF EXPORTS OF DUAL-USE ITEMS AND 
TECHNOLOGY 

I. 

Introduction – Purpose of the Communication 

Controls of exports of dual use items and technology play a key role in the fight against the 
proliferation of weapons of mass destructions (WMD). They are destined to avoid that goods 
or  technologies  can  reach  states  that  can  use  them  for  proliferation  programmes  or 
organisations  that  could  use  them  for  terrorist  or  military  purposes.  Although  they  have  a 
security  objective,  such  controls  are  carried  out  by  trade  policy  measures  that  impose 
constraints  on  the  activity  of  EU  manufacturers  and  exporters,  that  should  be  limited  to  the 
minimum necessary in order to promote their international competitiveness. 

The  main  objective  of  this  communication  is  to  propose  measures  destined  to  reinforce  the 
effectiveness  of  export  controls  on  dual-use  items  in  the  enlarged  European  Union,  in 
pursuance of the Action Plan against WMD adopted by the European Council in June 2003 
and  the  EU  Strategy  against  the  Proliferation  of  Weapons  of  Mass  Destruction  (WMD) 
adopted by the European Council in December 2003. It also aims at introducing more clarity 
and reducing regulatory burdens in the implementation of controls by EU exporters, and takes 
account of the need to adapt the legal framework to bring it in conformity with UN Security 
Council Resolution 1540. 

II. 

Background and context 

The  proliferation  of  Weapons  of  Mass  Destruction  and  their  possible  use  by  unscrupulous 
states  or  terrorist  groups  is  a  security  concern  of  major  international  importance.  The 
European  Security  Strategy  identifies  the  proliferation  of  those  weapons  and  their  means  of 
delivery  as  potentially  the  greatest  threat  to  Europe's  security.  It  notes  explicitly  that  export 
controls  had  a  beneficial  effect  in  slowing  the  spread  of  WMD.  One  of  the  ways  that  the 
European  Communities  contribute  to  the  fight  against  such  proliferation  is  through  its 
common commercial policy. Following two judgements of the European Court of Justice in 
1995,  which  declared  that  the  export  controls  of  dual-use  items  falls  within  the  common 
commercial  policy  (details  in  Annex  II  to  this  document),  the  Council  adopted  Regulation 
(EC)  No  1334/2000  setting  up  a  Community  regime  for  the  control  of  dual-use  items  and 
technologies.  

Council  Regulation  (EC)  No  1334/2000  establishes  a  Community  export  control  regime  for 
such dual-use items and technology, imposing an authorisation requirement for their export. 
The list of controlled items is set out in Annex I to the Regulation and is based on the lists 
established by the international export control regimes which cover biological and chemical 
items (the Australia Group), nuclear items (Nuclear Suppliers' Group) missile related (Missile 
Technology  Control  Regime)  and  conventional  arms  related  components  (Wassenaar 
Arrangement). Details on international export control regimes can be found in Annex III. 

Although  Regulation  (EC)  No  1334/2000  is  directly  applicable  throughout  the  EU,  its 
implementation relies on the national administrations of Member States, which are left with a 
relatively high degree of flexibility especially as regards the possibility to introduce additional 
national controls. 

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All  the  25  EU  Member  States  are  members  of  the  Australia  Group  (AG)  and  the  Nuclear 
Suppliers Group (NSG), but Cyprus is not yet a member of the Wassenaar Arrangement, and 
seven Member States (Cyprus, Estonia, Latvia, Lithuania, Malta, Slovakia and Slovenia) are 
not yet members of the MTCR and neither is Romania (in the process of acceding to the EU). 
The European Commission is a member of the Australia Group and an observer in the NSG, 
but has no status in the MTCR and Wassenaar Arrangement although, since the adoption of 
the  Thessaloniki  Action  Plan,  it  can  participate  in  the  meetings  along  with  the  Council 
Secretariat as part of the EU Presidency delegation. 

Since the terrorist attacks of 11 September 2001, the initial mandates of those regimes, which 
had  the  aim  of  preventing  States  from  acquiring  dual-use  items  for  producing  WMD  or 
conventional weapons, have been adjusted to prevent also the acquisition by non-State actors 
of dual-use items that could be used for terrorist attacks (either massive or via conventional 
means).  

Another element of change in the international background is that, due to the intensification of 
international exchanges and the emergence of new economic actors, these international export 
control regimes no longer represent all the major suppliers of relevant dual-use technologies 
for the production of weapons or WMD.  

This loophole should partially be closed in the medium term by the implementation of the UN 
Security  Council  Resolution  1540,  which  multilateralizes  those  controls.  Other  issues  of 
concern  relate  to  ensuring  that the  international  export  control  regimes'  decisions  keep  pace 
with  innovation  trends,  that  controls  do  not  affect  items  widely  available  outside  the 
membership of international regimes and that the rules are harmonised to the maximum extent 
among the members of the international regimes. 

The threat of terrorist use of WMDs triggered the Thessaloniki Action Plan, which called in 
particular for strengthened EU export controls, enhanced exchanges of sensitive information, 
improved interaction with exporters, enhanced role of the EU in international export control 
regimes  and  the  launch  of  "peer  reviews"  of  Member  States'  implementations  of  the 
Regulation.  The  "peer  reviews"  were  coordinated  by  a  Task  Force  chaired  by  the 
Commission,  which  reported  on  its  conclusions  to  the  Council  in  November  2004.  The 
General Affairs Council has since then regularly reviewed the progress in implementation of 
the "peer reviews" (most recently in the statement made in December 2005). In addition, on 
17/18 June 2004 the European Council adopted a declaration on criminal sanctions, recalling 
the  commitment  expressed  by  Member  States  in  the  European  Strategy  against  the 
proliferation  of  WMD,  to  adopt  common  policies  related  to  criminal  sanctions  for  illegal 
export, brokering and smuggling of WMD-related material. 

In addition to the security dimension, in economic terms, the production and export of dual-
use items and technologies is important because the products and technologies in question are 
wide-ranging  and  are  of  high  value-added  and  technological  content,  and  the  EU  has  a 
competitive advantage as a major exporter of such items. Even if, due to the nature of dual-
use  items,  the  precise  statistics  are  not  available,  exports  of  goods  in  tariff  lines  including 
dual-use items amounted to about 128 bn € of EU  exports in 2004 and 142 bn € of EU exports 
in  2005,  or  13  %  of  total  EU  merchandise  exports1.  It  is  also  estimated  that  there  are  over 

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These  exports  concern  all  tariff  lines  covering  dual-use  goods,  and  thus  include  also  goods  that  are 
strictly speaking not dual-use ones. 

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5000 companies in the EU exporting such controlled items. 

III.  Main issues concerning export controls 

The main areas for improvement at EU and Member State level identified by the Task Force 
on the "peer reviews", and noted by the Council in its statement of 13 December 2004, were 
the following: 

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ensure transparency and awareness of legislation implementing the EU system; 

minimise any significant divergence in practices amongst Member States; 

investigate the possibilities for adding controls on transit and transhipment of dual-
use items; 

provide assistance in recognition of dual-use items subject to control; 

improve  exchanges  of  information  on  denials,  and  consider  the  creation  of  a  data 
base to exchange sensitive classified information; 

agree best practices for the enforcement of controls; 

improve  transparency  to  facilitate  the  coordinated  implementation  of  controls  on 
non-listed items (catch-all/end use control) at EU level; 

enhance interaction with exporters; 

agree best practices for controlling intangible transfers of technology. 

UN  Security  Council  Resolution  1540  introduced  certain  new  obligations,  including  the 
adoption  of  adequate  provisions  in  order  to  prevent  illicit  smuggling,  transit,  transhipment, 
brokering  and  re-export  of  dual-use  items,  and  established  the  principle  of  imposition  of 
penalties,  criminal  or  administrative,  for  infringements  of  export  control  regulations.  As  to 
brokering  controls,  the  Commission  understands  them  as  being  provision  of  intermediation 
services where the actor involved is aware of WMD end uses but nevertheless carries out the 
transaction.  

Concrete  experience  has  also  shown  that  extra-territorial  application  of  export  controls  by 
third  parties  creates  difficult  situations  for  EU  importers  and  exporters.  In  order  to  avoid 
administrative or even criminal sanctions for actions that take place within the EU and which 
are  consistent  with  the  EU  rules,  they  are  sometimes  compelled  to  apply  third  countries' 
restrictions  on  re-exports  of  items  of  non  EU  origin  within  the  EU  or  on  exports  to  third 
countries of non-restricted items produced in the EU if they contain components of non EU 
origin. The EU nationals may also face requests for their extradition to a third country in cases 
where  their  exports  are  in  compliance  with  the  EU  rules  but  considered  illegal  by  a  third 
country.  It  would  be  appropriate  to  reiterate  that  a  comprehensive  legal  framework  for  the 
export  of  dual  use  items,  technology  and  related  services  is  provided  for  by  the  Dual-Use 
Regulation, and that it is important to ensure, in respect to differing third country legislation 
that might consider such exports as criminal offences, legal security for the exporters of dual 
use  items,  technology  or  services  subject  to  the  Regulation  who  act  in  conformity  with  its 
provisions and with those adopted for its implementation in compliance with the Regulation. 
The  best  way  to  address  these  problems  is  to  enhance  cooperation  between  the  EU  and  the 

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third  countries  concerned  to  promote  convergence  of  controls:  for  this  reason,  the 
Commission  has  proposed  to  introduce  in  the  export  controls  Regulation  a  provision  to 
promote such cooperation with third countries. 

The  experience  brought  by  EC-financed  projects, such  as  Galileo,  where  third  countries  are 
involved, have shown that it would be appropriate to put in place ad-hoc procedures to set the 
detailed EU rules for the release of dual use EU technologies to third parties in the context of 
those projects.  

Finally,  regular  contacts  with  industry  and  the  collection  of  exporters'  comments  in  the 
context  of  the  impact  assessment  study  (see  next  section)  have  shown  that  among  the  main 
industry concerns in this area are: 

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the need for greater transparency and predictability of rules; 

an acceleration of the speed of decisions by national administrations on applications 
for export authorizations including in particular for non-listed items; 

a  uniform  application  of  the  Dual-Use  Regulation  throughout  the  EU  in  order  to 
avoid  distortions  of  competition,  including  as  regards  the  interpretation  of  items 
under control and the application of national controls on non-listed items ; 

a  simplification  of  the  regime  by  limiting  the  complexity  of  the  lists  of  controlled 
items, notably by providing for regular reviews of the relevance of the lists against 
the  foreign  availability  of  the  items  and  innovation,  by  moving  the  focus  from  the 
items under controls to targeting the violators and by creating more trade facilitating 
instruments for reliable exporters; 

reducing multiple layers of regulation (in the Regimes, at EU level, and at national 
level,  in  addition  to  the  need  for  them  to  respect  controls  on  re-exports  applied  by 
third countries); 

the introduction of e-licensing;  

the  problems  caused  by  the  extraterritorial  application  of  controls  by  certain  third 
countries; 

the replacement of the current prior authorization requirement for intra-EU transfers 
currently applied on the most sensitive products with a system of prior notification. 

IV.  Recommendations and proposals for review of the EU export controls regime and 
of  its  contribution  to  international  efforts  against  proliferation  of  Weapons  of  Mass 
Destruction 

Before  formulating  the  specific  proposal  to  the  Council,  the  Commission  has  taken  into 
account, in addition to Member States’ and industry's views, the principle of proportionality 
so  as  to  ensure  that  the  legislative  changes  provide  added  value  to  security  without  unduly 
hurting the ability of EU companies to do business abroad. 

Most  of  the  other  legislative  changes  brought,  in  addition  to  transit,  transhipment  and 
brokering,  are  justified  by  the  early  recognition,  confirmed  by  the  "peer  reviews"  and  the 
impact  assessment  study,  of  differences  in  national  practices  of  implementation  of  certain 

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provisions  of  the  Regulation.  Such  provisions  could  be  strengthened  so  as  to  improve  the 
efficiency  of  the  EU  system  for  dual-use  export  control.  Areas  which  do  not  require 
legislative changes but rather administrative measures or the adoption of best practices were 
identified in the same way. 

The key objectives of the Commission recommendations are the following: 

•  achieving greater clarity, transparency and, where possible, simplicity of the EU dual-use 

export control system; 

•  ensuring the consistent application of the Regulation within the EU with greater efficiency 
and effectiveness of controls and elimination of distortions of competition among exporters 
within different Member States; 

•  limiting the regulatory burdens on EU exporters, taking into account the need to avoid that 

they are put in competitive disadvantage vis-à-vis exporters from third countries; 

•  reducing obstacles to trade within the EU internal market. 

Following  discussions  with  the  Member  States,  the  recommendations  of  the  Commission  in 
this communication are divided into five areas: 

a) 

Proposals for the recast of EC Regulation No 1334/2000. These are the subject of a 
separate  Commission  proposal  with  full  details  on  the  results  of  the  impact 
assessment study. The areas covered are, among others: the extension of controls to 
cover transit, transhipment2, brokering and re-exports; the clarification of the content 
of controls of intangible transfers of technology;  the establishment  of a comitology 
procedure for the adoption of lists of controlled items; the improvement of sharing of 
information  on  national  controls  on  non-listed  items  according  appropriate  security 
standards; the improvement of sharing of information on denials with the possibility 
to introduce a secure electronic system between the Commission, Member States and 
the Council; international cooperation with third countries, providing for possibilities 
of  adopting  ad-hoc  export  control  rules  in  the  case  of  specific  EC-funded  projects 
involving  potential  access  by  third  countries  to  the  EU  dual  use  technologies; 
insertion in the recasted Article 21 of the reference to criminal sanctions at least for 
serious  infringements  of  the  provisions  of  the  Regulation  and  of  the  regulations 
adopted by Member States for its implementation so as to respond to the call in the 
European Council declaration on criminal sanctions of June 2004, and to the call by 
UN  Security  Council  Resolution  1540  for  the  introduction  of  appropriate  civil  or 
criminal penalties for violations of such export control regulations; the replacement 
of  the  remaining  intra-Community  controls  by  a  system  consisting  of  prior-
notification  of  shipments;  provision  for  the  establishment  by  national  authorities  of 
indicative deadlines for the processing of applications for export authorisations, and 
of deadlines for the treatment of requests for information from licensing authorities 
concerning the application of national controls on non listed items and technologies. 

b) 

Indication  of  the  areas  where  guidelines  and  best  practices  could  be  elaborated. 
Guidelines and best practices are modalities  for implementing certain provisions of 
the Regulation which could be agreed at the level of the Council Dual-Use Working 

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Transhipment is covered partially by the definition of transit 

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c) 

d) 

e) 

Group and prepared by the experts in the "Coordination Group". They would not be 
legally  binding  but  provide  standards  for  the  application  of  export  controls  and, 
where appropriate, would be made available to the public, as in the case of the best 
practices  for  outreach  to  industry  adopted  in  December  2005.  In  some  cases,  those 
guidelines could consist of an adjustment of the international regimes' guidelines to 
take account of the EU specificities, in particular the existence of the single market 
and  the  common  EU  borders.  The  following  areas  are  suggested  for  best  practices 
and  guidelines:  controls  of  intangible  transfers  of  technology  including  technical 
assistance and definition of exemptions related to public domain and basic scientific 
research;  global  export  authorizations;  enforcement  practices,  such  as  common  risk 
analysis;  internal  compliance  programmes;  supporting  documents  to  assess  export 
applications and coordination of national controls on non-listed items. 

Indication  of  the  areas  where  administrative  action  could  be  sufficient,  such  as: 
transparency;  improvement  of  national  and  EC  website  providing  a  common  entry 
point;  enhanced  use  of  the  pool  of  experts  to  ensure  consistent  and  uniform 
interpretation of Annex I in the EU; elaboration of tools for the identification of dual-
use items; and training of licensing and customs officers.  

Areas  which  will  be  subject  of  upcoming  Commission  proposals,  in  particular  the 
creation  of  additional  and  new  Community  General  Export  Authorizations  to 
facilitate trade of non-sensitive items to non-sensitive destinations which are mainly 
covered currently by national general export authorizations (see Annex V. for more 
details). 

Finally,  there  are  several  issues  that  go  beyond  the  mechanics  of  the  EU  export 
control regime and which have been underlined by the Council (in particular in the 
Thessaloniki  Action  Plan)  and  confirmed  by  the  "peer  reviews",  which  need  to  be 
addressed: 

i) 

Limitations of the international export control regimes  

The export control regimes cannot provide for a totally secure system of controls as, 
amongst  other  things,  their  membership  is  limited  and  their  rules  are  not  legally 
binding,  leaving  much  room  for  manoeuvre for  national  implementation.  Generally 
speaking, regimes do not impose restrictions on exports to countries which have not 
ratified  the  relevant  non-proliferation  treaties.  This  is  a  deficiency  of  the  regimes 
which should ideally be addressed in order to make sure that sensitive exports take 
place  only  to  countries  which  are  safe  and  which  are  not  going  to  use  goods  or 
technology in any proliferation activity.  

In  addition,  given  the  high  speed  of  innovation  and  the  expansion  of  the  dual  use 
sector  due  also  to  the  changes  in  defence-strategies  and  increased  reliance  on  new 
technologies, the regimes have to face major challenges in their activities of selecting 
items to submit to controls. This would call for improved interaction with industry. 

In  the  specific  case  of  the  Wassenaar  Arrangement,  a  limitation  is  that  there  is  no 
rule  imposing  prior  consultation  in  case  one  member  country  intends  to  grant  an 
export  authorisation  for  an  essentially  similar  transaction  to  one  denied  by  another 
member country. 

The EU could work towards promoting a tightening of the regimes in this respect. 

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ii)  Membership  of  all  EU  Member  States  in  international  export  control 
regimes  

At the time of the latest enlargement, only three of the new ten EU Member States 
were  members  of  all  international  export  control  regimes.  This  posed  a  major 
problem  as  non-membership  in  a  regime  means  that  such  Member  States  have,  by 
virtue  of  the  Dual-Use  Regulation,  to  apply  controls  without  participating  in  the 
discussions on items to be controlled, or on the enforcement of export controls that 
take  place  in  the  regimes.  They  also  do  not  have  access  to  crucial  sensitive 
information such as the refusals of export authorisations made by non EU members 
or the list of sensitive end-users, which are key to implement efficient controls at the 
national and EU level. 

In September 2003, the Commission services proposed to Member States a strategy 
destined,  in  conformity  with  the  Thessaloniki  Action  Plan,  to  promote  the 
membership  of  all  the  new  Member  States  in  all  the  international  export  control 
regimes,  which  was  endorsed  by  the  Council's  Political  and  Security  Committee. 
This led to the admission of all new EU Member States in the Australia Group and in 
the Nuclear Suppliers' Group in May 2004. However, they were not so successful in 
the MTCR to which seven of the new EU Member States and Romania have not yet 
acceded,  nor  in  Wassenaar  where  Cyprus  remains  a  non-member.  It  is  important 
therefore to continue the active promotion of membership while taking due account 
of  the  necessity  for  the  regimes  to  enlarge  to  other  major  suppliers  of  dual  use 
technologies and maintaining efficient decision-making systems. In the meantime, it 
is  necessary  to  find  also  a  practical  short-term  solution  (possibly  a  temporary 
observer status) to combine the need for new EU MS to get access to all the relevant 
sensitive information, in particular denials and technical information on items to be 
controlled. 

iii)  EC participation in the Regimes and coordination of EU positions 

The Thessaloniki Action Plan and the EU Strategy against the proliferation of WMD 
call for making the EU a leading co-operative player in the export control regimes, 
among other by ensuring coordinated positions in the regimes and by providing for 
greater  involvement  of  the  Commission  in  the  regimes.  The  Commission  services 
proposed in 2003 to the Council a policy to that end which has been only partially 
implemented. One of the reasons of the difficulties for the Commission to enhance 
the  EU  coordination  has  been  its  lack  of  appropriate  status  in  the  regimes  in 
particular  the  MTCR  and  the  Wassenaar  Arrangement  which  undermines  the 
Commission's  capacity  to  contribute  effectively  in  areas  covered  by  the  Dual  Use 
Regulation. 

The Commission therefore recommends that its status in the international regimes be 
examined  with  Member  States  so  as  to  ensure  as  a  first  step  the  access  to  the  e-
systems of management of documents by MTCR and Wassenaar Arrangements.  

The Commission maintains that the EU coordination and involvement, as underlined 
in the EU Strategy against the proliferation of WMD, is a political priority for the EU 
to  successfully  prepare  the  sessions  and  facilitate  the  negotiation  of  proposals  with 
third  country  members;  such  coordination  has  proved  useful  in  defending  EU 
interests in particular in the Australia Group at the time of adoption of its guidelines 

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or  in  MTCR  and  the  Wassenaar  on  the  issues  such  as  export  controls  related  to 
technologies  that  can  be  used  for  the  Galileo  project.  Ad  hoc  meetings  of  the  EU 
delegates  participating  in  international  export  control  regimes  and  in  relevant 
Council  Groups  should  be  developed  further.  Enhanced  coordination  between  the 
different  competent  Council  Groups  (CONOP,  CODUN,  COTER,  Atomic 
Questions, COARM and the Working Party on Dual-Use Goods; cf. glossary of the 
terms in Annex I) should be maintained and promoted in order to ensure consistency 
and efficiency of the implementation of the EU strategy against the proliferation of 
WMDs. 

Such  improvements  would  also  enable  the  Commission  to  contribute  to  the 
facilitation of regular dialogue between the EU Member States and the EU industry 
prior to regimes' examinations of control lists, and ensure that the EU suppliers can 
contribute to proposals aiming at adjusting the regimes' decisions to the EU capacity 
of supply and of innovation in dual use sectors.  

iv)  Technical assistance to third countries and international cooperation 

The  Commission  is  well  aware  that  the  efforts  of  the  international  community  to 
promote strong national export controls and to multilateralize them aim at filling the 
gaps  originating  from  the  increased  sources  of  supply  of  dual-use  items  from  the 
countries  having  less  than  optimal  export  control  policies  and  practices.  The  EU 
Strategy  against  the  proliferation  of  WMD  articulates  a  clear  commitment  to 
strengthening  export  control  policies  and  practices  within  the  EU  borders  and 
beyond, in coordination with international partners. It identifies the need to set up a 
programme  of  assistance  to  States  in  need  of  technical  knowledge  in  the  field  of 
export control. 

In November 2003, the General Affairs and External Relations Council adopted the 
text aimed at mainstreaming non-proliferation policies into the EU's wider relations 
with  third  countries,  inter-alia  by  introducing  a  non-proliferation  clause  in 
agreements with them. The EU now aims at including provisions of non-proliferation 
in  all  the  new  agreements  with  third  countries  as  has  been  done  with  the  ACP 
Countries  in  the  revised  Cotonou  Agreement  (these  countries  have  agreed  to 
cooperate with the EU in countering the proliferation of WMD through an effective 
system of national export controls). A key element of the clause sets out that the EU 
partners must establish an effective system for national export control for the WMD 
related  goods.  As  a  consequence,  the  EU  is  now  committed  to  providing  greater 
export control assistance. 

The Commission is seeking to do more on export control technical assistance. This is 
why it has launched, in close cooperation with the Council Secretariat (in particular 
with  the  Office  of  the  Special  Representative  of  the  High  Representative  of  the 
European Union for Foreign and Security Policy) and with Member States, a number 
of  activities  of  technical  assistance  to  the  countries  such  as  Croatia,  Serbia, 
Montenegro,  Bosnia  and  Herzegovina,  the  Russian  Federation,  China,  Ukraine  and 
the  United  Arab  Emirates.  This  work  will  underpin  a  programme  of  continuing 
export  control  assistance  to  be  funded  from  the  new  instrument  of  stability  in  the 
2007-13 period. 

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The  Commission  is  committed  to  develop  its  interaction  with  other  third  countries 
and  major  trade  partners  and  international  organisations  based  on  the  experience 
gained in particular in its cooperation with the IAEA (International Atomic Energy 
Agency).  To  this  end,  it  intends  to  facilitate  in  particular  the  adoption  of  project-
specific export control measures so as to facilitate the participation of third countries 
in the EU financed research and industrial projects on the basis of fruitful experience 
gained in particular in the Galileo project. 

V. 

Impact assessment of proposals 

A  collection  of  exporters’  views  on  the  implementation  of  the  Regulation  and  an  impact 
assessment  study  were  launched  in  September  2005,  in  order  to  assess  the  consequences  of 
different  options  for  the  reform  of  the  export  controls.  The  impact  assessment  study,  which 
included a public call for expression of views by all interested parties, involved the Member 
States, exporters and transporters as well as traders. The results were made public in February 
2006 3 and then discussed with Member States and exporters. 

Most  of  the  recommendations  and  comments  made  by  the  interested  industry  associations 
have  been  taken  into  account,  although  in  certain  respects  this  communication  does  not 
include  certain  suggestions  because  they  would  be  not  politically  feasible  (for  instance,  a 
radical simplification of the lists of controlled items or of the national controls).  

Different  options  were  tested  and,  following  the  results  obtained  from  the  study  as  well  as 
from Member States and exporters' comments, the Commission has retained the best options 
in  terms  of  cost-effectiveness.  Any  changes  to  the  regulatory  regime  proposed  have  been 
considered  against  the  need  to  limit  burdens  on  manufacturer  and  exporters  as  well  as  on 
Member  States’  Administration  strictly  to  the  minimum  necessary.  A  more  detailed 
presentation  of  the  impact  assessment  is  contained  in  the  explanatory  memorandum  of  the 
Communication proposal to amend and recast Council Regulation (EC) No 1334/2000 and in 
a note annexed to that proposal.  

The  Commission  proposal  for  controls  of  transit  and  transhipment  will  allow  the  national 
competent authorities of the Member States to take possession of a dual-use item in transit (as 
defined  in  the  proposed  recast  Regulation)  when  aimed  at  a  third  country  only  if  the 
intelligence  gathered  by  the  Member  States  indicates  the  intention  of  using  the  item  for 
proliferation  of  weapons  of  mass  destruction  in  violation  of  international  non-proliferation 
treaties  and  arrangements.  Not  many  such  cases  are  expected  to  occur.  The  possibility  of 
applying  controls  to  each  single  transhipment  within  the  EU  has  been  discarded  because  of 
the impracticality of doing so. 

As regards the provision of intermediation services regarding dual-use items (or brokering), 
the  impact  assessment  study  found  practical  difficulties  regarding  the  implementation  of  a 
systematic control (authorization) of intermediary activities carried out by EU natural or legal 
persons as well as the impossibility to apply such controls to EU citizens carrying out their 
intermediary  services  abroad.  This  led  the  Commission  to  propose  to  limit  the  controls  to 
activities taking place from the EU and to the cases where the broker is aware that the items in 
question could be used for proliferation purposes. 

3 

Document available at the following address: 
http://ec.europa.eu/comm/trade/issues/sectoral/industry/dualuse/pr230206_en.htm 

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The  impact  assessment  study  has  shown  the  benefit  of  measures  ensuring  enhanced 
transparency in the EU and Member States' legislation.  

In  addition,  the  study  has  provided  additional  elements  in  favour  of  further  defining  and 
clarifying  at  the  EU  level  the  conditions  of  use  of  the  Community  general  export 
authorisation and national general authorisations.  

The  impact  assessment  study  has  also  stressed  the  need  to  create  additional  Community 
general  export  authorisations  so  as  to  align  EU  practice  with  that  of  other  major  suppliers 
and members of international export control regimes. Exporters have made proposals that the 
Commission  intends  to  follow  up,  probably  at  the  time  for  making  proposals  in  2007  for 
amendments  to  Annex  I  to  the  Regulation  (details  provided  in  Annex  V  to  this  document). 
There is a possible trade-off between the creation of new Community Export Authorisations 
to  certain  countries  and  a  tightening  of  controls  of  exports  to  the  countries  which  are  not 
members to the regimes.  

The adoption of best practices for the granting of global export authorisations should further 
spread  the  use  of  those  authorisations  so  as  to  avoid  distortion  of  competition  between  EU 
exporters. 

The  impact  assessment  study  has  also  highlighted  the  security  and  trade  added  value  of 
harmonising  the  implementation  of  national  controls  on  non  listed  items.  The  European 
Commission  has  raised  Member  States'  attention  to  the  fact  that  a  growing  share  of  denials 
cover  non  listed  items  which,  by  definition,  are  free  for  export  in  the  other  Member  States 
except  if  those  Member  States  apply  the  same  end  use  control.  The  study  proposed  that 
national customs would be able to stop any non-listed dual use item subject to a national end 
use control. It also revealed that without enhanced harmonisation of notification of controls to 
industry and improved awareness raising, there is a risk that denials for non-listed items are 
being undercut via export through another Member State.  

The introduction of a "comitology" procedure should speed up the adoption of updates to the 
annexes of Regulation No (EC) 1334/2000. An active involvement of the Commission in the 
international export control regimes will also be required.  

The proposals to enter into negotiations with third countries so that the single market is not 
affected by third countries' rules on re-export rules applied within the EU would be of benefit 
to  EU  industry  as  well  as  to  exporters  from  third  countries.  Proposals  to  introduce,  as 
derogations  to  the  current  rules  established  by  the  Regulation,  as  necessary  and  along  the 
example of the Galileo project, a common EU decision making process and possibly also the 
introduction of a project-specific export control regime for exports of new or sensitive listed 
dual-use  technologies  developed  in  the  EU  would  benefit  industrial  projects  and  research 
projects which are co-financed by the EC and Member States and which are opened to third 
countries. 

Most  of  the  actions  envisaged  in  addition  to  those  described  above  will  bring  a  better 
coordination  and  implementation  of  export  control  activities  within  the  EU  and  greater 
transparency. They will promote the level playing field needed by EU industry to maintain its 
competitiveness.  Most  of  the  actions  proposed  will  require  a  better  and  in  some  cases  a 
different utilisation of available resources in the Member States. 

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Increased cooperation between the Member States may require some resources in the Member 
States  who  have  developed  the  most  advanced  capacities  but  will  strengthen  the  overall 
efficiency of the EU regime. Some Member States may need to upgrade their export control 
activities  and  resources  devoted  so  that  they  meet  high  standards  of  efficiency,  and  also  to 
meet  the  exporters'  requests  for  quicker  and  more  efficient  systems  such  as  a  speedier 
treatment  of  applications  for  export  authorisations  if  possible  within  given  deadlines,  risk-
based  management,  industry  awareness  raising,  expansion  of  internal  compliance-based 
controls, or more support to industry in responding to their enquiries. 

VI.  Conclusions and next steps 

The first priority should be an early adoption by the Council of the necessary amendments to 
the Regulation contained in the proposal for a recast text. 

However,  since  the  improvement  of  export  controls  does  not  in  all  the  instances  require 
regulatory action, the Commission also invites the Council to note all the areas where action 
has  been  proposed  and  to  endorse  concrete  action  to  be  taken  within  an  indicative  agreed 
timeframe, which the Commission suggests could be the end of 2008 for all measures to be in 
place,  and  early  2007  for  the  access  by  Commission  to  the  WAIS  and  ePOC  (e-systems  of 
distribution of respectively Wassenaar and MTCR regime). The Commission also invites the 
Council  to  keep  in  mind  the  national  implementation  of  some  of  the  "peer  review" 
recommendations which will be subject of regular reports from the Presidency to the Council, 
the next one being planned for December 2006. 

In  its  next  report4  on  the  implementation  of  the  Regulation,  the  European  Commission  will 
review the implementation of the Regulation and the progress achieved in the areas mentioned 
in this communication, and will point to areas where further action would be desirable. It will 
also  continue  its  reflection  on  the  operation  of export  controls  so  that they  can  move  in  the 
direction  of  being  more  industry-compliance-based  as  opposed  to  case  by  case  export 
authorisation-based. 

Annexes 

I. Glossary of basic dual-use terms and acronyms 

II. Jurisprudence of the European Court of Justice on dual-use 

III. Background on the international export control regimes 

IV. Details of the Commission proposal under sections IV. a) and b) of the Communication 

V. Suggestions for the scope of additional Community General Export Authorisations 

4 

Report 2000-2004 available on: 
http://ec.europa.eu/comm/trade/issues/sectoral/industry/dualuse/legis/index_en.htm 

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ANNEX I 

Glossary of basic dual-use terms and acronyms 

•  AG  (Australia  Group):  this  international  export  control  regime  sets  up  guidelines  for 
export controls of biological and chemical dual-use items and establishes lists of items that 
each  Member  commits,  at  political  level,  to  integrate  into  its  national  legislation  to  the 
extent  that  this  is  compatible  with  its  constitution  and  other  national  specificities  of  its 
legal  and  administrative  system.  Its  name  derives  from  the  decision  of  Australia  to  chair 
this group. The first meeting of what subsequently became known as the Australia Group 
took place in Brussels in June 1985. Subsequently the meetings have taken place in Paris, 
to the exception of the 20th anniversary, in 2005, which was held in Sydney. The number of 
members including the EC participating in the AG has grown from the original 15 in 1985 
to 405 at present. Website: http://www.australiagroup.net/ . 

•  Article  18  Coordination  group:  expert  meeting  chaired  by  the  Commission  whose 
mandate  is  set  by  the  Article  18  of  the  Regulation  No  (EC)  1334/2000.  The  EU  experts 
(one  per  Member  State)  are  nominated  by  the  Member  States.  The  Group  discusses  any 
implementation issue related to the Regulation. It is opened to exporters on ad hoc basis. It 
has been opened to custom authorities in 2005 and to specialist technology experts in 2006.  

•  Research:  experimental  or  theoretical  work  undertaken  principally  to  acquire  new 
knowledge of the fundamental principles or phenomena or observable facts, not primarily 
directed towards a specific practical aim or objective. 

•  BTWC – Biological and Toxin Weapons Convention. 

•  Catch-all or End Use Control: ad hoc controls applying to non-listed items and based on 
the assessment by the exporter and/or the governments of the risk attached to the end use 
of  these  items  when  exported  to  certain  end-users.  Those  controls  can  be  imposed  by 
Member States at the national level via their notifications to exporters (Articles 4.1 to 4.3 
of the Regulation) and rests also on the exporters who must report to national competent 
authorities  if  they  are  aware  of  certain  transactions  covering  non  listed  items  which  may 
lead to proliferation of weapons of mass destruction or other purposes and cases referred to 
in  Articles  4.1  to  4.5  of  the  Regulation.  In  those  cases,  exporters  have  to  ask  national 
governments if export authorisations are requested prior to the export. 

•  COARM  is  the  EU  General  Affairs  Council’s  working  group  dealing  with  conventional 

arms. 

•  CODUN  is  the  EU  General  Affairs  Council’s  Committee  on  Disarmament  in  the  United 

Nations. 

•  "Comitology" is established Community shorthand for the work of committees, made up 
of representatives of Member States and chaired by the Commission, whose function is to 
assist  the  Commission  in  adopting  measures  implementing  Community  laws  and 
Community policies. 

5 

The EU MS and the Commission, Australia, Argentina, Bulgaria, Canada, Iceland, Japan, New Zealand, 
Norway, Republic of Korea, Romania, Switzerland, Turkey, Ukraine, United States.  

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•  CONOP is the EU General Affairs Council’s Committee on Non-Proliferation. 

•  COTER is the EU General Affairs Council’s Terrorism Working Group (second pillar). 

•  CWC  –  Chemical  Weapons  Convention.  It  is  a  multilateral  treaty  on  the  prohibition  of 

chemical weapons (178 Parties) which entered into force 29 April 1997. 

•  CGEA – Community General Export Authorisation established by the Council Regulation 
(EC) No 1334/2000 for control of exports of Dual-use Items and technology, which allows 
all exporters who respect its conditions of use set in the Regulation to export listed items 
(in  Annex  II  of  the  Regulation)  to  Australia,  Canada,  Japan,  New  Zealand,  Norway, 
Switerland, United States. 

•  "Dual-Use items" are goods and technology developed for civilian uses, but which can be 

used for military applications or to produce weapons of mass destruction. 

•  End-use – the particular way, in which a dual-use item can be used  

•  End-user – the final or ultimate user of the item.  

•  International Export control regimes – these regimes have been set up by like minded 
countries  to  address  proliferation  risks  as  they  arose  and  to  facilitate  their  members' 
compliance  with  international  non  proliferation  treaties  which  encourage  international 
cooperation  for  legitimate  and  peaceful  purposes.  The  international  regimes  include:  the 
Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods 
and Technologies, the Australia Group on chemical and biological weapons materials, the 
Nuclear Suppliers' Group and the Missile Technology Control Regime. These international 
export control regimes take decisions by unanimity on the basis of consensus. 

•  National General Export Authorisations are issued by national authorities and published 
in  national  official  journal.  They  are  valid  for  all  exporters  based  in  the  Member  State 
where  they  are  published  and  who  meets  the  conditions  set  in  the  national  law,  covering 
one  or  several  specified  countries  as  well  as  a  number  of  dual-use  items  defined  in  the 
national law. 

•  Global  export  authorisation:  granted  to  one  specific  exporter  in  respect  of  a  type  or 
category  of  dual-use  item  which  may  be  valid  for  exports  to  one  or  more  specified  end 
users in one or more specified third countries. 

•  IAS: impact assessment study. 

•  Individual export authorisation is granted to one specific exporter for one end user in a 

third country and covering one or more dual-use items or technologies 

•  Items  in  the  public  domain:  dual-use  items  and  technologies  made  available  without 
restrictions upon its further dissemination (copyright restrictions do not remove technology 
or software from being in the public domain) 

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•  MTCR  –  Missile  Technology  Control  Regime:  this  international  export  control  regime 
was  set  up  in  1987.  The  MTCR  now  has  34  member  countries6.  MTCR  Website: 
http://www.mtcr.info.  The  aim  of  the  MTCR  is  to  restrict  the  proliferation  of  missiles, 
complete rocket systems, unmanned air vehicles, and related technology for those systems 
capable  of  carrying  a  500  kilogram  payload  at  least  300  kilometres,  as  well  as  systems 
intended for the delivery of weapons of mass destruction (WMD). The Regime’s controls 
are  applicable  to  certain  complete  rocket  systems  (to  include  ballistic  missiles,  space 
launch vehicles (SLVs), and sounding rockets) and unmanned air vehicle (UAV) systems 
(to include cruise missiles, drones, UAVs, and remotely piloted vehicles [RPVs]). Partners 
also  recognize  the  importance  of  controlling  the  transfer  of  missile-related  technology 
without disrupting legitimate trade and acknowledge the need to strengthen the objectives 
of the Regime through cooperation with countries outside the Regime. 

•  NPT – the Treaty on Non proliferation of Nuclear Weapons. The NPT entered into force in 
1970,  and  with  187  parties,  it  is  one  of  the  most  widely-adhered  to  arms  agreements  in 
history. 

•  NSG  –  this  international  export  control  regime,  the  Nuclear  Suppliers'  Group,  which 
consists  of  45  member  countries,7  seeks  to  contribute  to  the  non-proliferation  of  nuclear 
weapons through the implementation of Guidelines for nuclear exports and nuclear related 
exports.  The  NSG  was  created  following  the  explosion  in  1974  of  a  nuclear  device  in 
India, which demonstrated that nuclear technology transferred for peaceful purposes could 
be misused. Website: http://www.nuclearsuppliersgroup.org . 

•  PSC – Political and Security Committee is one of the GAERC preparatory committees and 

the lynchpin of the CFSP and the ESDP. 

•  Report  of  the  Commission  services  on  the  implementation  of  Regulation  No  (EC) 
1334/2000 from 2000 to May 2004: this report, in conformity with the obligations set in 
Article  20  of  the  Regulation,  is  available  on  the  DG  TRADE  webpage  at  the  following 
address: 
http://ec.europa.eu/comm/trade/issues/sectoral/industry/dualuse/legis/index_en.htm 

•  UNSCR – United Nations Security Council Resolution. 

•  The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use 
Goods and Technologies is the successor to "COCOM”.It began operations in September 
1996.  The  Wassenaar  Arrangement  is  presently  composed  of  40  countries8.  The  WA 
website:  www.wassenaar.org.  It  sets  up  list  of  military  and  dual  use  items  for  which 
exports are to be controlled by the member countries according to the regime's guidelines 
and  in  conformity  with  country's  legal  and  administrative  framework.  It  has  been 

6 

7 

8 

Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Czech Republic, Denmark, Finland, 
France,  Germany,  Greece,  Hungary,  Iceland,  Ireland,  Italy,  Japan,  Luxembourg,  Netherlands,  New 
Zealand,  Norway,  Poland,  Portugal,  Rep.  of  Korea  (South  Korea),  Russia  Federation,  South  Africa, 
Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, United States. 
EU 25 Member States. Non EU Member States: Argentina, Australia, Brazil, Bulgaria, Canada, China, 
Croatia, Japan, Korea, New Zealand, Norway, Russian Federation, South Africa, Switzerland, Turkey, 
Ukraine, USA. 
(except  Cyprus),  Bulgaria,  Canada,  Croatia,  
Argentina,  Australia, 
Japan,  New  Zealand,  Norway,  Republic  of  Korea,  Romania,  Russian  Federation,  South  Africa, 
Switzerland, Turkey, Ukraine, United States. 

EU  MS 

24 

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technologies, 

established  in  order  to  contribute  to  regional  and  international  security  and  stability,  by 
promoting  transparency  and  greater  responsibility  in  transfers  of  conventional  arms  and 
dual-use  goods  and 
thus  preventing  destabilising  accumulations. 
Participating  States  seek,  through  their  national  policies,  to  ensure  that  transfers  of  these 
items do not contribute to the development or enhancement of military capabilities which 
undermine these goals, and are not diverted to support such capabilities. Representatives of 
Participating  States  meet  regularly  in  Vienna  where  the  Wassenaar  Arrangement's 
Secretariat is located. 

•  WMD  –  Weapons  of  Mass  Destruction,  which  include  nuclear,  chemical  and  biological 

weapons as well as its means of delivery and in particular missile technology. 

•  WPDU – Council Working Party on Dual-Use Goods.  

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ANNEX II 

Jurisprudence of the European Court of Justice on dual-use 

Jurisprudence of the European Court of Justice in the area of dual-use goods has established 
that the rules restricting the exports of these goods to third countries fall within the scope of 
the common commercial policy, as set out in Article 133 of the EC Treaty. 

The ECJ delivered preliminary rulings in the case of "Werner" (Case C-70/94) and "Leifer" 
(case C-83/94) 

In  the  "Werner"  (Case  C-70/94),  the  Court  stated  that  "a  measure  (…)  whose  effect  is  to 
prevent or restrict the export of certain products, cannot be treated as falling outside the scope 
of  the  common  commercial  policy  on  the  ground  that  it  has  foreign  policy  and  security 
objectives". 

In the "Leifer" (Case C-83/94), the Court stated that "Article 113 (now Article 133) of the EC 
Treaty is to be interpreted as meaning that rules restricting exports of dual-use goods to non-
member countries fall within the scope of that article and that in this matter the Community 
has  exclusive  competence,  which  therefore  excludes  the  competence  of  the  Member  States 
save where the Community grants them specific authorization". It also ruled that the fact that 
"a  trade  measure  may  have  non-trade  objectives  does  not  alter  the  trade  nature  of  such 
measures".  The  Court  also  stated  that  "the  fact  that  the  restriction  concerns  dual-use  goods 
does  not  affect  that  conclusion.  The  nature  of  those  products  cannot  take  them  outside  the 
scope of the common commercial policy. 

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ANNEX III 

The international export control regimes 

The  international  export  control  regimes  establish  norms  and  guidelines  to  control  nuclear, 
chemical, biological, missile-related exports as well as the exports of conventional arms and 
dual-use  technologies.  Between  the  1970s  and  the  1980s,  four  international  export  control 
regimes  were  set  up  to  enable  their  members  to  participate  in  international  trade  while 
complying with their obligation to facilitate international cooperation for legitimate purposes. 
These are: the Nuclear Suppliers' Group (NSG) and Zangger Committee for nuclear items; the 
Australia  Group  (AG)  for  chemical  and  biological  dual-use  items;  the  Missile  Technology 
Control  Regime  (MTCR)  for  missile  related  technologies;  and  the  Wassenaar  Regime  for 
dual-use items related to conventional weapons. Comprehensive lists of controlled items were 
developed in the Regimes as only one international treaty of non-proliferation (the Chemical 
Weapons Convention) lists the dual-use items and technologies subject to controls, whilst the 
other  treaties  or  arrangements  (Biological  and  Toxin  Weapons  Convention,  the  Non 
Proliferation  Treaty,  the  Hague  Code  of  Conduct  on  Missiles)  do  not  list  any  dual-use 
technologies that can be used for WMD end uses.  

Since the terrorist attacks of 11 September 2001, the initial mandates of those regimes, which 
were  to  prevent  States  to  acquire  dual-use  items  for  producing  WMD  or  conventional 
weapons, have been adjusted to prevent also the acquisition by non-State actors of dual-use 
items that could be used for terrorist attacks (either massive or via conventional means).  

The  threat  of  massive  terrorist  attacks  using  WMDs  has  led  to  increased  workload  in 
international export control regimes (in particular in the Australia Group) so as to adjust the 
criteria and guidelines of the regimes to the particular threats. 

Except  for  the  Wassenaar  Arrangement,  the  international  regimes  have  no  technical 
secretariat to manage the meetings. Except for the Australia Group, the regimes have rotating 
chairs  changed  every  year.  The  international  regimes  hold  a  plenary  meeting  per  year.  This 
meeting which gathers the heads of delegations of each Member decides on all major issues in 
particular the entry of new members, the changes to the lists, the adoption of amendments to 
existing  guidelines,  outreach  to  non  member  countries.  They  adopt  a  press-release  at  that 
occasion. Decisions are taken at unanimity for all issues. Members have the capacity to make 
proposals on any subject in the mandate of the regime.  

The  preparation  of  the  plenary  meetings  is  made  by  technical  expert  groups.  Those  groups 
usually  represent  3  different  types  of  expertise:  technical  experts  to  prepare  the  lists  of 
controls,  custom  and  enforcement  officers  as  well  as  licensing  officers  who  exchange 
practices, intelligence, expertise where information on sensitive issues regarding proliferation, 
terrorism and WMD acquisition are exchanged. 

All  the  25  EU  Member  States  are  members  in  the  Australia  Group  (AG)  and  the  Nuclear 
Suppliers Group (NSG), but Cyprus is not yet member of the Wassenaar arrangement. Seven 
new  Member  States  (Cyprus,  Estonia,  Latvia,  Lithuania,  Malta,  Slovakia  and  Slovenia)  are 
not yet members of the MTCR nor is Romania (in the process  of acceding to the EU). The 
European Commission is member of the Australia Group and observer in the NSG, but has no 
status  in  MTCR  and  Wassenaar  although  it  can  participate  in  the  meetings,  along  with  the 
Council  Secretariat,  as  part  of  the  EU  Presidency  delegation  since  the  adoption  of  the 
Thessaloniki Action Plan. 

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Worth noting that the Chemical Weapons Convention mentioned in the Communication is 
not  an  international  export  control  regime  of  the  same  nature  as  those  4  described.  The 
fundamental difference is that it is a multilateral treaty (178 Parties) which entered into force 
29 April 1997 and contains both provisions and a mechanism for inspections so as to verify 
State Parties' compliance and also lists of items, including dual use items, whose trade must 
be  controlled.  It  is  the  only  international  non-proliferation  treaty  containing  such  lists  of 
items. 

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ANNEX IV 

Details of the Commission proposal mentioned in sections IV. a) and b) of the 
Communication 

a) Proposals for amendment of current Regulation: 

The following proposals for the amendment of the Regulation are made: 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

introduction of certain controls on dual-use items in transit within the EU 

control  of  brokering  of  dual-use  items  if  there  are  grounds  to  suspect  a  link  to  a 
WMD programme 

clarification  and  update  of  controls  of  intangible  transfers  of  technology  including 
the provision of technical assistance 

introduction  of  some  limited  adjustments  regarding  the  application  of  national 
controls  on  items  non-listed  in  the  Regulation  in  order  to  improve  their  efficiency 
and  the  transparency  of  their  operation,  although  leaving  implementation  to  best 
practices 

as to general export authorizations, clarification of the conditions for the use of the 
Community  General  Export  Authorisation  (a  notification  requirement)  and  of 
national general export authorizations , and of the criteria for the granting of global 
authorizations 

proposals  to  improve  the  exchange  of  information  among  Member  States  and  with 
the Commission and to ensure that denials of authorisations by one Member State are 
properly taken into account by the other MS 

introduction  of  provisions  on  relations  with  third  countries,  according  to  which 
negotiations could be conducted with third countries to improve the coordination of 
the functioning of export control regulations and facilitate the mutual recognition of 
such controls 

introduction of procedures for a speedier adoption of amendments to the annexes of 
the  Regulation  and  for  measures  necessary  to  implement  the  Regulation  (a 
comitology procedure) 

possible introduction of an electronic system for exchanging information on denials 
as well as other information and improvements of the notifications of denials 

replacement of EU intra-community controls with prior notification and a traceability 
system within the EU 

provision for the establishment by national authorities of indicative deadlines for the 
processing  of  applications  for  export  authorisations,  and  of  deadlines  for  the 
treatment  of  requests  for  information  from  licensing  authorities  concerning  the 
application of national controls. 

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– 

introduction of a reference to criminal sanctions to be adopted for the most serious 
infringements to the Regulation in conformity with reported practices of the Member 
States. 

b) Areas where guidelines/best practices could be elaborated: 

Guidelines  and  best  practices  are  modalities  for  implementing  certain  provisions  of  the 
Regulation which could be agreed at the level of the Council Dual-Use Working Group and 
prepared by the experts in the "Coordination Group". They would not be legally binding but 
provide standards for the application of export controls. In some cases, those guidelines could 
consist  of  an  adjustment  of  the  international  regimes'  guidelines  to  take  account  of  EU 
specificities, in particular the existence of a single market and common EU borders. In some 
instances, these guidelines and best practices can be made public for the benefit of exporters, 
although  in  other  cases  their  nature  would  require  that  they  are  kept  within  the  relevant 
administrations  as  internal  guidance.  Among  the  areas  where  such  guidelines  and  best 
practices could be prepared are the following: 

– 

– 

– 

– 

– 

– 

– 

implementation  and  enforcement  of  controls  of  intangible  transfers  of  technology 
including provision of technical assistance 

modalities  for  the  implementation  of  certain  aspects  of  the  controls  on  non-listed 
items  ("catch  all"  provision),  destined  to  improve  flows  of  information  among 
Member States and to limit the possibilities of circumvention of controls applied by 
one Member State via exports through other Member States 

improvement  of  risk  assessment,  including  possible  elements  for  common  risk 
analysis  and  enforcement  as  foreseen  by  Council  Regulation  No  (EC)  648/2005  on 
the security amendments to the Customs Code and its implementing provisions to be 
adopted by the end of 2006 

implementation of global export authorizations (scope, conditions of use and how to 
check compliance) 

elements used to assess export applications including the compliance capacity of the 
exporter, supporting documents and end–user certificates 

establishment of target deadlines to decide on applications for authorisations 

internal compliance programmes. 

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ANNEX V 

Suggestions for new Community General Export Authorisations 

Areas  which  have  been  suggested  for  the  scope  of  new  Community  General  Export 
Authorisations:  

– 

– 

– 

– 

some  chemical  products  covered  by  the  Chemical  Weapons  Convention  could 
benefit from new trade facilitation to a number of Parties to the CWC which are not 
covered  by  the  Annex  II  to  the  Regulation  (which  defines  the  Community  General 
Export Authorisation)  

small quantity /value shipments and samples 

Wassenaar non-sensitive items could benefit from the creation of a new Community 
authorisation  covering  certain  countries  which  are  members  of  Wassenaar  and  not 
listed in Annex II of the Regulation (which defines the Community General Export 
Authorisation) 

the  new  Community  General  Export  Authorisations  will  contain  implementing 
provisions based on those provided in the proposal to amend the Community General 
Export  Authorisation  and  on  those  currently  in  force  in  the  Member  States  who 
currently  have  adopted  relatively  similar  national  general  export  authorisations  in 
their scopes and destinations. 

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