GREEN PAPER The dual-use export control system of the European Union: ensuring security and competitiveness in a changing world
Date: 2011-06-30
Institutions: European Commission
Subjects: competitiveness, dual-use good, export monitoring

EUROPEAN COMMISSION 

Brussels, 30.6.2011 
COM(2011) 393 final 

GREEN PAPER 

The dual-use export control system of the European Union: ensuring security and 
competitiveness in a changing world 

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GREEN PAPER 

The dual-use export control system of the European Union: ensuring security and 
competitiveness in a changing world 

1. 

INTRODUCTION 

Controlling  the  export  of  dual-use  items,  that  is  items  which  can  be  used  for  both  civil  and 
military  purposes,  is  at  the  forefront  of  international  non-proliferation  efforts.  Guided  by 
security objectives, dual-use export controls are implemented through trade measures taking 
the form of authorisation requirements for the export of dual-use items to third countries. The 
high-tech  nature  of  such  goods  and  technologies,  and  the  considerable  volume  of  trade  in 
them, means that the dual-use sector is a crucial element of the EU's drive towards innovation 
and competitiveness.  

Consequently,  when  controlling exports,  particular attention needs to be paid to striking the 
right  balance  between  the  pursued  security  objective  and  the  need  to  support  business 
activities. This close link between security and trade is at the heart of dual-use export controls. 
It is also what creates particular challenges for implementation within the European Union.  

Since  19951,  it  has  been  commonly  accepted  that  dual-use  export  controls  constitute  an 
exclusive competence of the European Union and form an integral part of the EU's Common 
Commercial  Policy.  This  exclusive  competence  excludes  the  competence  of  the  Member 
States  save  where  the  Union  grants  them  specific  authorization2.  Such  an  authorisation  for 
exceptional national measures was in fact given to Member States in the Export Regulation3 
and  is  also  present  in  legislation  setting  up  the  EU's  dual-use  export  control  system 
(Regulation (EC) No 428/2009 – the Dual-use Regulation).  

Export controls in the EU are consequently a function of trade and security considerations on 
the one hand, and of EU and national measures on the other. Of course, whenever exceptional 
circumstances  occur  which  may  have  a  bearing  on  a  Member  State's  essential  security 
interests, the latter should prevail. This security exception should not however be interpreted 
as a broad authorization to allow independent national approaches wherever a Member State 
wants to take action4.  

The  development  of  the  EU  export  control  system  over  the  last  decade  has  witnessed  an 
entanglement of these trade and security considerations. Instead of having a harmonized EU 
approach to export controls where security considerations are brought to bear on a case-by-
case  basis  to  protect  essential  security  interests  and  prevent  high-risk  transactions,  we  have 
different  approaches  being  applied  to  export  controls  across  the  EU.  These  range  from 

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The European Court of Justice issued two fundamental rulings in 1995 in case C-70/94 - Fritz Werner 
Industrie-Ausrüstungen  GmbH  v  Federal  Republic  of  Germany  and  in  case  C-83/94  -  Criminal 
proceedings against Peter Leifer, Reinhold Otto Krauskopf and Otto Holzer. 
See Article 2(1) of the Treaty on the Functioning of the European Union 
Council Regulation (EEC) No 2603/69. 
See case C-70/94 and C-83/94 above. In case C-83/94, the European Court of Justice specified that any 
exceptional measures taken in this regard must be proportional to the aim being pursued. 

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extremely  tough  export  restrictions  put  on  exporters  established  in  some  Member  States,  to 
the use of broad national facilitation measures to allow certain exporters in particular Member 
States to export dual-use items with minimum difficulty. 

2. 

OBJECTIVE OF THE GREEN PAPER 

Article  25  of  the  Dual-use  Regulation  requires  the  Commission  to  prepare  a  report  on  the 
implementation of the EU export control system and possible areas of reform. Consequently, 
the  objective  of  this  Green  Paper  is  to  launch  a  broad  public  debate  concerning  the 
functioning  of  the  current  EU  dual-use  export  control  system5.  This  consultation  is  being 
conducted with a view to gathering input from  civil  society,  NGOs,  industry,  academia  and 
Member State governments on: 

–  the detailed provisions of the current export control framework in order to prepare 

the review of the system; 

–  the progressive reform of the EU dual-use export control system in order to adapt 

it to the rapidly changing circumstances of the modern world. 

The results of the consultation will therefore help identify the strengths and weaknesses of the 
current system and map out a longer term vision of the EU export control framework. These 
results will be translated into concrete amendments to the current system and the preparation 
of a long term strategy on the development of export controls in the EU. 

3. 

STRUCTURE OF THIS GREEN PAPER 

In  order  to  facilitate  the  consultation  process  and  to  keep  the  short-term  elements  of  the 
review process separate from discussions on medium- to long-term visions, this Green Paper 
is divided into three separate parts: 

–  the first deals with the broader context of export controls; 

–  the second deals with the details of the current EU dual-use export control system 

as set out in Regulation 428/2009; 

–  the third deals with the possible direction of evolution of the EU dual-use export 

control framework. 

4. 

EU EXPORT CONTROLS IN A CHANGING WORLD 

4.1. 

Importance of the dual-use sector to the EU economy 

The  dual-use  industry  in  the  EU  is  extensive  with  around  5000  companies  engaged  in  the 
export  of  controlled  dual-use  items  accounting  for  a  non-negligible  percentage  of  EU 

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This Green Paper deals exclusively with export controls on dual-use items. EU sanctions and exports of 
military equipment are specifically excluded.  

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exports6.  The  dual-use  industry  is  also  extremely  wide-ranging  covering  exporters  active  in 
such  sectors  as:  nuclear,  biological,  chemical,  materials  processing  equipment,  electronics, 
computers,  telecommunications,  encryption,  sensors  and  lasers,  navigation  and  avionics, 
marine  equipment,  and  aerospace  and  propulsion  equipment.  Given  the  nature  of  these 
activities,  dual-use  items  are  often  cutting  edge  high-tech  and  are  a  reflection  of  the  EU's 
technological  leadership  in  the  world.  The  dual-use  industry  is  a  large  employer  of  highly-
qualified staff, who are key to the EU's competitiveness. 

Questions: 

To exporters: 

(1) 

In your view, what is the importance of the dual-use sector for the EU economy?  

(2)  What is the importance of dual-use exports for your business? What are the associated 

costs of compliance? Please provide figures. 

To competent authorities of the Member States: 

(3)  What is the value of dual-use exports from your Member State (in absolute terms and 

as a percentage of all your exports)? 

4.2. 

Dual-use export controls in an evolving world 

Due to the very nature of dual-use goods, the most advanced items are only available from a 
limited  number  of  supplying  countries.  These  suppliers  cooperate  among  themselves  within 
four international export control regimes: the Australia Group (AG), the Missile Technology 
Control  Regime  (MTCR),  the  Nuclear  Suppliers  Group  (NSG)  and  the  Wassenaar 
Arrangement  (WA).  This  is  done  with  a  view  to  limiting  the  risk  that  sensitive  items  are 
diverted to military uses or to the production of weapons of mass destruction (WMDs)7.  

Not all suppliers of dual-use items are members of all international export control regimes and 
not  all  members  of  the  regimes  have  equally  efficient  export  control  systems.  A  number  of 
sensitive items may therefore not be subject to export controls at all or may be subject to only 
minimal  levels  of  control.  The  issue  of  foreign  availability  of  controlled  items  is  a  key 
element of export control considerations as it significantly influences decisions on whether or 
not  to  control  certain  items.  If  there  is  broad  foreign  availability  of  particular  goods,  the 
reasons behind their control are greatly diminished, as the respective export control decisions 
can  potentially  negatively  influence  business  performance,  while  not  achieving  any  security 
goals.  

The  question  of  foreign  availability  is  one  of  many  trade  issues  having  a  strong  bearing  on 
international export control efforts and closely linked to the dynamic economic development 
seen  around  the  world.  Strong  economic  progress,  rapid  modernisation,  the  exponential 
spread  of  technology  have  all  contributed  to  increasing  global  prosperity,  but  have  also 

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An analysis of the dual-use relevant CN codes (covering items which are both dual-use and not dual-use 
in nature) suggests that dual-use exports may account for up to 10% of EU exports (upper bound).  
The  work  of  the  international  export  control  regimes  is  closely  linked  to  achieving  the  objectives  of 
several  international  instruments  including  the  Nuclear  Non-Proliferation  Treaty,  Chemical  Weapons 
Convention, the Biological and Toxin Weapons Convention and UN Security Council resolutions such 
as UNSCR 1540. 

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fundamentally altered the basic principles underpinning export control policy. Whereas a few 
decades ago, controlled items could reasonably be expected to be found in a very limited set 
of  the  most  highly  advanced  countries,  supply  is  much  more  abundant  now.  Technological 
progress and advances in education mean that many sensitive items can now be manufactured 
in  much  more  heterogeneous  environments,  thereby  also  contributing  to  increased  global 
supply.  

Many supplier countries around the world have realised these trends and have embarked on 
ambitious  reforms  designed  to  enhance  the  competitiveness  of  their  industries  and  their 
exports,  while  ensuring  that  acceptable  levels  of  security  are  maintained.  These  reforms  are 
primarily  based  on  a  certain  prioritisation  of  control  efforts  on  those  items  which  pose  the 
highest risk, meaning that the strictest levels of controls are concentrated on the most sensitive 
items  and  destinations.  As  part  of  these  reforms,  ambitious  export  facilitation  measures  are 
being proposed for less sensitive exports which would give a considerable competitive edge to 
local exporters.  

There is a risk that the combination of foreign availability of certain items and simplification 
of export control procedures being undertaken in certain third countries, could make it more 
difficult for EU exporters to compete on global markets.  

Questions 

To all stakeholders: 

(4)  What  is  the  impact  of  the  foreign  availability  of  certain  controlled  items  on  the 

competitiveness of EU dual-use exports? 

(5) 

(6) 

How  competitive  are  EU  dual-use  exporters  as  compared  to  exporters  from  third 
countries?  How  is  this  competitiveness  affected  by  export  control  reforms  being 
undertaken in third countries? 

How would you rate the current EU export control system as compared to the export 
control systems of third countries? 

(7)  What  is  the  impact  of  dual-use  export  controls  on  activities  of  international 
collaboration  in  research  and  innovation?  Should  the  EU  legislative  framework 
contain special provisions for such activities? 

4.3. 

Differences in national approaches to dual-use export controls 

The Dual-use Regulation provides a general framework for dual-use export control activities 
in  the  European  Union.  Practical  implementation  however  is  left  almost  entirely  to  the 
Member  States,  with  the  consequence  that  different  approaches  are  applied  across  the  EU. 
These differences between the national approaches can be divided into three broad categories: 

–  Administrative – Member States have vastly different approaches to such issues as 
registration  requirements  for  exporters  and  reporting.  More  importantly,  some 
Member  States  seem  to  require  their  exporters  to  have  internal  compliance 
programmes before being eligible to export dual-use items, while others do not. 

–  Substantive  –  Member  States  make  different  use  of  the  various  authorizations 
available under the Dual-use Regulation. For example, a few Member States have 

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implemented  broad  National  General  Export  Authorisations  thereby  facilitating 
exports for their exporters, while exporters from other Member States do not have 
access to such facilitation measures. 

–  Operational  –  Member  State  have  different  interpretations  of  control  list  entries 
and  make  different  use  of  the  'catch-all'  provisions  of  the  Dual-use  Regulation 
allowing  for  the  imposition  of  authorisation  requirements  on  items  not  listed  on 
the EU control list8. 

These differences lead to situations where an export of a specific item from one Member State 
may  be  significantly  delayed  or  even  prohibited,  while  the  export  of  the  same  items  from 
another Member State may be completed without any problems. Consideration could be given 
to  the  issue  of  limiting  the  most  significant  differences  in  the  application  of  the  Dual-use 
Regulation.  

Questions: 

To all stakeholders: 

(8) 

Have  you  encountered  any  problems  due  to  differences  in  the  application  of  export 
controls across the EU Member States? What was the nature of these problems? 

4.4. 

A level playing field for EU exporters 

The  prosperity  of  the  European  Union  is  built  on  a  number  of  fundamental  principles, 
including the free movement of goods, the freedom of establishment and competition, which 
together  create  the  climate  necessary  for  economic  growth,  stability  and  prosperity.  These 
principles  lie  at  the  heart  of  the  Single  Market.  The  EU's  Common  Commercial  Policy  is  a 
logical reflection of these principles in the trade area, where the EU speaks with one voice and 
ensures  equal  treatment  of  exporters  from  all  27  Member  States,  thereby  providing  the 
necessary basis to successfully compete in the global market.  

The  export  control  field  would  seem  to  be  particularly  challenging  in  this  regard  with  the 
consequence that despite more than a decade of EU-level work, the EU export control system 
remains fragmented and does not ensure similar standards for exporters as in other areas.  

Of  course,  dual-use  export  controls  cannot  be  treated  like  any  other  area  of  trade.  Dual-use 
export  controls  bring  together  and  try  to  balance  security  and  non-proliferation  efforts  with 
the  need  to  support  the  competitiveness  of  EU  industry.  In  this  regard,  the  application  of 
export controls can mean either severe losses for an exporter (if an export license cannot be 
obtained) or tremendous gains (if a license can be obtained quickly or at least quicker than the 
competition). The question of administrative burden put on exporters to comply with export 
control  legislation  and  the  time  needed  to  obtain  licenses  are  consequently  of  paramount 
importance. Given the logic of the EU Single Market and Common Commercial Policy, such 
questions  should  be  properly  addressed  at  EU  level  so  that  European  businesses  can 
concentrate on competing on global markets rather than spending valuable resources in order 
to  comply  with  different  and  sometimes  contradictory  rules  in  place  across  the  Member 

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There are nevertheless certain operational areas, in particular in the customs field, where a single EU 
approach  is  used.  For  example  the  correlation  between  control  list  items  and  customs  goods 
nomenclature is unified at EU level via the TARIC database. 

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States. It is the responsibility of the EU and all the Member States to work together to push 
this common agenda forward. 

Questions: 

To all stakeholders: 

(9) 

Do you think that the current EU dual-use export control framework provides a level 
playing  field  for  EU  exporters?  If  not,  how  is  any  unevenness  demonstrated?  Please 
provide examples. 

5. 

EU DUAL-USE EXPORT CONTROLS UNDER REGULATION 428/2009  

5.1. 

Overview of the EU dual-use export control system 

Regulation  428/2009  sets  out  the  key  elements  of  the  EU  dual-use  export  control  system 
leaving most of the practical implementation and the definition of additional measures within 
the  competence  of  the  Member  States.  The  framework  sets  out  inter  alia  the  types  of 
authorisations that can be issued, the conditions under which controls on 'non-listed' items can 
be imposed, consultation and information exchange procedures and requirements for intra-EU 
transfers of certain controlled items.  

The key elements of the export control framework are addressed in further detail below. Each 
sub-section  is  followed  by  a  series  of  questions  geared  towards  gathering  the  views  of 
particularly concerned stakeholders concerning the practical implementation of the Dual-use 
Regulation. 

5.2. 

Types of authorisations available 

Four  types  of  authorisations  are  currently  available  under  the  Dual-use  Regulation,  three  of 
which are issued by Member States (individual, global and national general export licenses). 
The EU General Export Authorisation (EU GEA) EU001 found in Annex II of the Regulation 
is issued by the EU. The Commission is aware that the processing times and requirements for 
the various licenses differ across the Member States and would therefore like to gather further 
specific information from stakeholders on how these licenses are applied across the EU.  

The use of National General Export Licenses (NGAs) across the EU is of particular interest 
due  to  their  significant  impact  on  exports.  On  the  positive  side,  NGAs  can  considerably 
facilitate  the  export  of  items  in  low-risk  situations.  On  the  negative  side,  NGAs  are  only 
available  to  exporters  in  certain  Member  States  and  may  thereby  risk  distorting  the  Single 
Market. Only 7 Member States have made NGAs available to their exporters.  

Questions: 

To all stakeholders: 

(10) 

Is the framework of licenses  available in the  EU  sufficient?  If  not,  how  should  it  be 
changed? 

(11)  What is the time needed to obtain an individual or global license? 

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(12)  Do existing types of export authorisations ensure fair treatment of exporters across the 

EU and a level playing field? 

(13)  What is the usefulness of National General Export Authorisations as compared to EU 

General Export Authorisations? 

(14)  How  could  the  benefits  of  NGAs  be  extended  to  exporters  established  in  other 

Member States? 

To exporters: 

(15)  What  license  type/s  do  you  primarily  use?  Are  there  any  particular  problems  with 

obtaining any specific types of licenses? 

To licensing authorities: 

(16)  How many licenses did you issue in 2010 (per type of license)? 

5.3. 

Catch-all controls 

Article  4  of  the  Dual-use  Regulation  allows  Member  States  under  certain  circumstances  to 
require  an  authorisation  for  the  export  of  items  not  included  on  the  EU  control  list.  This 
authorisation requirement is only valid in the issuing Member State and concerns a particular 
transaction or type of transaction (e.g. exports of certain items to a specific destination or end-
user). Due to its limited scope, the currently available catch-all mechanism may have adverse 
security and trade effects. On the security side, this limited scope may mean that the same or 
similar  items  remain  available  from  other  Member  States.  On  the  trade  side,  this  limited 
validity  may  mean  that  competitors  in  other  Member  States  may  continue  to  freely  trade  a 
particular item even though an authorisation requirement has been imposed in other Member 
States. 

Questions: 

To all stakeholders: 

(17)  Are you satisfied with the way the current catch-all mechanism functions? If not, what 

problems have you encountered? 

(18)  Does  the  current  system  of  catch-all  controls  lead  to  distortions  within  the  Single 

Market and to an uneven playing field for EU exporters? 

(19)  How would you improve the application of catch-alls across the EU? 

To exporters: 

(20)  Have you encountered situations where a catch-all has been imposed for your export 
transaction, while your competitors continued to trade the same items and possibly to 
the same end-user or destination? Please describe. 

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5.4. 

Transit and brokering controls 

Regulation  428/2009  introduced  completely  new  controls  on  brokering  services  and  on 
transits. With regard to brokering, an authorisation is required for activities carried out from 
the EU if the transaction concerns dual-use items going from one third country to another. In 
terms of transit controls, Member States are empowered to prohibit a specific transit of non-
EU goods, but the territorial validity of the prohibition is limited to the issuing Member State. 

Questions: 

To all stakeholders: 

(21)  What is the usefulness of current brokering controls?  

(22)  Would there be a need to extend the scope of these controls to also cover transactions 

from the EU to third countries? 

(23)  How  is  the  current  transit  control  system  functioning?  What  is  the  impact  of  the 

limited territorial validity of prohibitions? 

5.5. 

Additional controls imposed by Member States 

The  Dual-use  Regulation  allows  Member  States  to  introduce  certain  additional  national 
measures  concerning  dual-use  items.  Such  additional  measures  are  foreseen  inter  alia  in 
relation to catch-all controls (Article 4(5)), brokering, transit and intra-EU transfer controls, as 
well  as  with  regard  to  additional  lists  of  items  controlled  due  to  public  security  or  human 
rights considerations (Article 8).  

The  broad  fields  in  which  additional  national  measures  are  allowed  would  seem  to  suggest 
considerable  divergences  between  the  Member  States  with  regard  to  the  scope  of  necessary 
controls on dual-use items.  

Questions: 

To all stakeholders: 

(24)  How  are  you  impacted  by  the  provisions  of  the  Dual-use  Regulation  that  allow 

additional controls to be introduced by Member States?  

(25)  What  is  the  impact  of  these  additional  national  controls  on  competitiveness,  trade 

flows and on security? 

5.6. 

Criteria used to decide on an export authorisation 

The Dual-use Regulation includes in Article 12 a list of criteria that should be used to assess 
authorisation requests. On the positive side, the Regulation contains a flexible set of criteria 
applicable  across  the  entire  EU.  On  the  negative  side,  these  criteria  may  be  too  general  in 
nature leaving room for varying interpretations.  

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Questions: 

To all stakeholders: 

(26)  Do you think that the criteria set out in Article 12 are clear and precise enough or not?  

(27) 

Is there a need to harmonise to a greater degree the criteria used by Member States to 
assess export applications? If so, how? 

5.7. 

Denials 

Article 13 of the Dual-use Regulation includes a number of detailed provisions concerning the 
issuing  of  export  authorisation  denials,  consultations  and  information  exchange  among 
Member States. Under the regulation, Member States should review their denials every three 
years with a view to their revocation, amendment or renewal.  

Questions: 

To all licensing authorities: 

(28)  What  are  your  views  concerning  the  current  system  of  denials  and  the  denial 

consultation mechanism? How could this mechanism be improved? 

(29)  Considering  the  amount  of  work  needed  to  perform  a  review  and  the  number  of 
denials in force, what are your views on introducing a 3-year validity period for each 
denial - after which, in the absence of any amendment or renewal, the denial would be 
automatically revoked? 

5.8. 

Intra-EU transfer controls 

The  Dual-use  Regulation  contains  provisions  which  require  controls  concerning  the  transfer 
of  certain  items  listed  in  Annex  IV  of  the  Regulation  between  the  EU  Member  States. 
Nevertheless,  relevant  provisions  of  the  Regulation  exempt  certain  EU  projects  from  the 
scope of these controls. Moreover, there would seem to be a few Member States that do not 
apply these controls fully due to the existence of previously signed international commitments 
that are still in force.  

The  Commission  has,  on  a  number  of  occasions,  received  feedback  from  stakeholders  that 
these  intra-EU  controls  unnecessarily  hinder cooperation  on  various  projects  among  the  EU 
Member  States,  as  not  only  physical  items  are  subject  to  controls,  but  also  the  relevant 
technology.  Intra-EU  transfer  controls  make  it  very  complicated  to  include  in  a  project 
suppliers  or  sub-contractors  based  outside  the  principal  Member  State.  This  applies  also 
during the tendering phase. Consequently, cooperation between businesses located in different 
Member States suffers. This is particularly so within the nuclear technology sector9.  

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It should be noted that controls on intra-EU transfers of nuclear goods are also linked to the Additional 
Protocol with the IAEA. 

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Intra-EU transfer controls may even have the perverse effect of reducing the competitiveness 
of  EU  companies  working  in  more  than  one  EU  Member  State  as  compared  to  competitors 
from third countries.  

Questions: 

To all stakeholders: 

(30)  What  is  your  view  concerning  the  current  system  of  controls  on  intra-EU  transfers? 

Have you observed procedural differences between Member States? 

(31) 

Is  it  appropriate  to  apply  the  same  level  of  assessment  to  intra-EU  transfers  as  to 
exports to 3rd countries? 

(32)  How could the intra-EU transfer control provisions be reformed? 

To exporters: 

(33)  What is the impact of intra-EU controls on your business and the Single Market? Do 
these controls affect your competitiveness vis-à-vis exporters from 3rd countries who 
export to the EU? Please explain. 

(34)  What is the approximate time needed to obtain a license for an intra-EU transfer of an 

Annex IV item? 

To licensing authorities: 

(35)  What measures could be taken to relax intra-EU transfer controls, while ensuring that 

international obligations are adhered to? 

5.9. 

EU Control List 

The EU list of controlled items set out in Annex I of the Dual-use Regulation is the basis for 
the identification of what items are subject to export controls, and what items are not. The EU 
list constitutes a consolidated version of the control lists agreed within the international export 
control regimes plus a few additional items. The list contains a set of criteria and parameters 
which  decide  whether  a  particular  item  is  subject  to  export  controls  or  not.  Given  its 
fundamental  role  in  the  export  control  process,  the  EU  control  list  should  be  uniformly 
applied across all EU Member States, so that an identical level of control is attained across the 
EU. 

Questions: 

To all stakeholders: 

(36)  How would you rate the quality of the EU control list? Is it updated regularly enough? 

(37)  Have you experienced any differences in interpretation of control list entries across the 

EU Member States? Please explain. 

(38) 

Is the EU control list noticeably stricter that the control lists of 3rd countries? Has this 
ever caused you any problems? 

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6. 

THE EVOLUTION OF DUAL-USE EXPORT CONTROLS IN THE EU  

6.1. 

Towards a new EU export control model 

The current EU export control framework has distinct advantages and disadvantages. Putting 
aside  possible  differences  concerning  the  main  principles  of  export  controls  in  the  EU,  it  is 
clear  that  this  framework  will  have  to  evolve  in  coming  years  in  order  to  respond  to 
challenges brought about by a quickly developing world. New threats to our security coupled 
with technological progress leading to increased availability of sensitive items, will mean that 
certain gradual changes may need to take place within the EU system.  

New  ideas  sometimes  take  considerable  time  to  implement. The  opportunity  created  by  this 
Green Paper, should be used to collect opinions about possible areas of reform and vectors of 
actions, so that the necessary preparatory work can be undertaken as early as possible. 

This section of the Green Paper seeks to commence a debate on future strategic options for 
dual-use export controls at EU level. 

6.2. 

Strategic objective and risk-driven EU export controls 

Export controls will continue to be driven in the future by the need to prevent sensitive items 
from being used for proliferation or military purposes by both state and non-state actors. The 
strategic objective of EU export controls will therefore continue to be oriented at ensuring full 
compliance  with  international  non-proliferation  efforts.  The  tools  needed  to  achieve  this 
objective may, however, have to evolve over time.  

Developments  over  the  last  few  years  have  demonstrated  that  a  certain  prioritisation  of 
measures may be needed in the field of export controls. The modern world is characterised by 
an  ever-increasing  availability  of  certain  items,  accelerating  globalisation  and  new  business 
methods  that  involve  supply  chains  spread  out  across  several  continents.  Companies  that 
develop or have access to controlled items or technology are often multinational in nature and 
require rapid transfers of controlled technology for day-to-day business operations. Even for 
smaller companies located in a single country, the realities of doing business in today's world 
involve  competing  across  the  globe.  Being  able  to  deliver  quickly  and  on  time  is  a  key 
element of today's dynamic business world. 

It can legitimately be expected that dual-use exports will continue to account for a substantial 
part  of  EU  trade  in  the  future  and  that  this  trade  will  continue  to  be  conducted  in  the  vast 
majority of cases for legitimate purposes. Equally however, there will continue to be a small 
group of countries and criminal organizations that will be interested in gaining access to these 
goods because of their potential military uses. The solution to this conundrum needs to rely on 
measures  and  approaches  adapted  to  today's  world.  Technological  development  and  the 
increasing number of transactions taking place put a constantly growing burden on the limited 
resources  of  export  control  authorities.  Fully  risk-based  controls,  at  all  levels  of  the  export 
control process, would seem to be the only prospective solution. 

At  the  same  time,  the  rewards  of  the  EU  Single  Market  and  Common  Commercial  Policy 
should  be  reaped  in  full.  The  EU  provides  a  unique  economic  environment  which  allows 
companies to seamlessly operate in several or all Member States and thereby gives them the 
underlying strength to compete globally. There would seem to be a need to concentrate efforts 

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on  ensuring  that  various  differences  in  approaches  among  the  Member  States  do  not 
jeopardise this competitiveness. 

Consequently,  it  may  be  necessary  to  start  working  towards  a  more  fully  developed  risk-
driven model for EU export controls, where limited resources are invested into controlling the 
highest-risk items. In order to work, the following would have to be ensured: 

–  a common risk assessment approach would have to be used by all export control 

authorities; 

–  a greater exchange of information on suspicious transactions and licenses issued 

would have to take place in a systematic fashion; 

–  National  General  Export  Authorisations  would  have  to  be  progressively  phased 

out in favour of EU General Export Authorisations; 

–  a common approach would have to be developed for catch-all controls; 

–  a satisfactory solution to the problem of intra-EU transfer controls would have to 

be found; 

–  coordinated  enforcement  across  the  EU  would  have  to  take  place  coupled  with 

improved access to relevant information for customs. 

Under this model, Member States would maintain control of their export control policies as 
they would continue being able to prevent exports from taking place if their security interests 
were at stake. On the whole however, a genuinely common approach to export controls would 
be launched across the entire EU leading to: 

–  equal treatment for exporters; 

–  an improved climate for businesses to operate; 

–  strengthened control over the most high-risk transactions; 

–  strengthened exports from the EU. 

As a consequence, both security and EU competitiveness could be increased. The concept for 
a new EU export control model is discussed in further detail below. 

6.3. 

Organisation of EU export controls in the future 

The  organisational  approach  to  export  controls  under  the  model  described  above  would  be 
fundamentally  similar  to  the  current  EU  export  control  system  in  that  a  series  of  national 
export  control  authorities  would  be  responsible  for  licensing  decisions  taken  within  their 
respective Member States. This approach would guarantee that the principle of subsidiarity is 
respected  and  that  there  continues  to  be  a  close  link  between  exporters  operating  in  a 
particular Member State and the authorities responsible for issuing export authorisations and 
controlling compliance. 

On  the  other  hand,  the  national  authorities  dealing  with  dual-use  export  controls  would 
systematically  work  more  closely  together  by  way  of  greater  use  of  common  information 
technology tools, better information exchange and common risk assessment procedures. This 

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architecture would be similar in many ways to current levels of cooperation among customs 
authorities  across  the  EU.  Indeed,  the  level  of  systematic  cooperation  existing  between  EU 
customs authorities is a model that export control authorities should aspire to.  

Questions: 

(39)  What are your views concerning a possible new EU export control model based on a 
network of existing licensing authorities operating under more common rules? 

6.4. 

Common risk assessment and appropriate review procedures 

In  order  to  achieve  the  required  level  of  harmonisation  with  regard  to  export  control 
procedures,  there  would  be  a  need  to  agree  on  a  common  risk  assessment  approach,  which 
would  be  used  across  the  entire  EU  for  the  purpose  of  export  control  decisions. 
Fundamentally,  such  a  common  risk  assessment  approach  should  lead  to  similar  decisions 
being taken concerning similar situations, including in catch-all cases. This would mean that 
situations where licensing authorities reach different conclusions in similar situations would 
be avoided.  

Coupled with the risk assessment approach itself, appropriate review mechanisms might need 
to be established in order to ensure that a level playing field for EU exporters is established.  

Questions: 

(40)  What  are  your  views  concerning  the  establishment  of  a  common  approach  to  risk 
assessment,  which  would  be  used  by  all  licensing  authorities  for  the  purpose  of 
licensing procedures? 

6.5. 

Systematic information exchange 

Reliable  information  is  the  basis  for  efficient  and  robust  export  controls.  Without  access  to 
appropriate  information,  licensing  authorities  do  not  have  a  solid  enough  basis  to  make 
qualified  decisions  about  specific  export  transactions.  Two  types  of  information  should  be 
clearly distinguished: 

–  First,  security  related  information  –  this  type  of  information  is  collected  by 
Member  States  within  their  national  security  prerogatives.  It  remains  outside  of 
the  scope  of  the  current  Green  Paper  and  should  only  be  exchanged  as  Member 
States  see  fit.  Nevertheless,  as  indicated  in  the  New  Lines  of  Action  document 
adopted by the Council, better use could be made of EU-level analysis capacities. 

–  Second, information directly stemming from export control procedures – this type 
of  information  includes  data  on  exporters,  licensing  decisions  taken,  suspicious 
entities  and  denials.  Improving  this  type  of  information  exchange  should  be  the 
focus of the EU’s efforts. 

At the current moment, information relevant for export controls is exchanged primarily on an 
informal bilateral basis. Systematic data exchange only takes place concerning denials issued 
by licensing authorities and even this is done with a minimum degree of detail. Denials are 
exchanged in order to avoid so-called ‘undercutting’ from taking place, namely one Member 
State  authorising  an  export,  which  is  similar  to  another  transaction  denied  by  a  different 
Member  State.  What  is  interesting  is  that  the  level  of  systematic  data  exchange  concerning 

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denials  across  the  27  EU  Member  States  does  not  exceed  what  is  exchanged  among  the 
participating countries of international export control regimes, which include around 50 states. 
In  some  cases,  more  information  is  exchanged  with  certain  international  organisation  than 
with EU partners. For example, in the nuclear field, Member States provide the International 
Atomic  Energy  Agency  (IAEA)  with  information  on  licensed  nuclear  transfers,  and  some 
Member  States  even  provide  the  IAEA  with  information  on  purchasing  enquiries.  There 
would  therefore  seem  to  be  a  certain  disproportion  of  systematic  information  exchange, 
considering  the  level  of  integration  achieved  in  the  EU  and  the  existence  of  a  seemingly 
common export policy.  

In  order  to  ensure  that  a  future  EU  export  control  architecture  functions  as  expected, 
systematic information exchange would need to take place with regard to various aspects of 
export controls. At a minimum, this could include: 

–  the details of licenses issued by EU Member States; 

–  details of exporters engaged in the export of dual-use items; 

–  details of exporters registered to use general export authorisations; 

–  suspicious entities seeking to procure dual-use items. 

Pooling  such  information  would  ensure  that  on  the  one  hand,  licensing  offices  have  the 
necessary  background  concerning  licensing  issues  to  ensure  uniform  application  of  export 
controls across the EU. On the other hand, access to this information would allow for more 
efficient  enforcement  at  EU  borders  as  various  transactions  could  easily  be  crosschecked 
against lists of valid licenses and exporters.  

Questions: 

(41)  What is your opinion about the information exchange model outlined above? 

(42)  What  other  types  of  information  would  have  to  be  exchanged  among  licensing 

authorities in order to ensure uniform application of export controls across the EU? 

6.6. 

Extending the scope of EU General Export Authorisations 

In  order  to  ensure  efficient  export  controls  under  the  new  export  control  model,  agreement 
must be reached concerning the prioritisation of efforts. Many EU Member States as well as 
several third countries already prioritise  their  work  by  making  low-risk transactions eligible 
for  facilitated  export  procedures  under  general  licenses.  In  the  EU  itself,  no  fewer  than  7 
Member  States  have  National  General  Export  Authorisations  (NGAs)  in  force,  which  allow 
for  the  export  of  several  controlled  items  to  a  broad  range  of  destinations  with  only  a 
minimum of formalities. Obviously, such general authorisations greatly facilitate exports for 
businesses  having  access  to  them  and  allow  licensing  offices  to  dedicate  resources  to 
assessing in detail more high risk transactions.  

At EU level, there is currently in force one EU General Export Authorisation allowing for the 
export  of  most  controlled  items  to  7  destinations.  In  order  to  extend  the  benefits  of  general 
licenses to exporters in the entire EU, the Commission proposed in 2008 the introduction of 6 
new General Export Authorisations.  

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The Commission believes that a further effort will have to be made in the future to extend the 
availability of EU General Export Authorisations, in particular in areas where certain Member 
States  already  have  NGAs  in  place.  This  issue  is  closely  related  to  the  way  risk  is  assessed 
across  the  EU.  At  the  current  moment,  different  approaches  to  risk  lead  to  diametrically 
different conclusions among the Member States concerning the potential scope of EU General 
Export Authorisations. Transactions which are considered low-risk enough to merit inclusion 
in  NGAs  in  some  Member  States,  are  considered  by  others  to  be  too  risky  and  therefore 
require  individual  licenses.  From  the  Commission’s  perspective  however  such  situations 
should not occur in a Single Market – as on one hand they open the door to circumvention and 
on the other they create an unlevel playing field for EU operators. It should consequently be 
possible to reach broad agreements on low-risk exports. In particular, given the broad scope 
of  several  NGAs  already  in  place  and  the  broad  scope  of  general  licenses  available  in  third 
countries, the EU should be able to agree on new broad EU General Export Authorisations. In 
order to safeguard national prerogatives in the field of security, certain safety clauses could be 
introduced  into  such  broad  EU  General  Export  Authorisations,  which  would  allow  Member 
States  to  block  certain  transactions  on  a  case-by-case  basis,  if  they  were  to  prejudice  their 
essential  security  interests.  If  agreement  could  be  reached  on  such  a  common  approach,  the 
use of NGAs could be phased out. 

In the absence of agreement on new broad EU General Export Authorisations and the phasing 
out  of  NGAs,  consideration  will  have  to  be  given  to  the  possibility  of  extending  the 
availability of NGAs to exporters from all EU Member States.  

Questions: 

(43)  What  are  your  views  concerning  the  idea  of  phasing  out  NGAs  if  they  would  be 
replaced  with  EU  General  Export  Authorisations?  Such  EU  General  Export 
Authorisations  would  have  a  similar  item  and  destination  scope,  but  would  be 
available to exporters in all EU Member States. 

(44)  What  new  types  of  EU  General  Export  Authorisations  would  you  like  to  see 

implemented in the EU? 

(45)  How do you compare the currently available EU General Export Authorisation EU001 
and  NGAs,  with  similar  types  of  authorisations  available  in  third  countries  (e.g. 
license exceptions in the US)? 

6.7. 

A common approach to catch-all controls 

The possibility of prohibiting an export transaction concerning an item not specifically listed 
on the EU control list, but which could be used nevertheless for proliferation purposes, is a 
fundamental element of export control systems around the world. Such catch-all controls are 
necessary  in  order  to  ensure  that  items  which  could  contribute  to  proliferation  or  military 
programmes  do  not  make  their  way  to  such  programmes  in  a  situation  when  their  technical 
parameters fall slightly below the controlled thresholds or the items haven't yet been included 
on the control list. Catch-all controls are consequently a logical extension of controls on listed 
items. 

The  use  of  catch-all  controls  is  always  difficult,  but  creates  particular  challenges  within  the 
EU  context,  given  the  need  to  ensure  a  level  playing  field  for  EU  exporters.  Two  specific 
problems have appeared in the application of catch-all controls in the EU: 

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–  First, if one Member State imposes a catch-all control and consequently requires 
an  authorisation  of  the  export  of  a  specific  item,  similar  transactions  in  other 
Member States are not affected. This means that an exporter in one Member State 
may be required to go through an authorisation process, while competitors in other 
Member  States  continue  to  export  without  any  restrictions.  The  Dual-use 
Regulation  currently  only  provides  Member  States  with  the  possibility  of 
informing each other about imposed catch-all controls, but does not require them 
to act upon such information. Consequently, a level playing field for EU exporters 
is not ensured and security objectives are not met as interested parties may 'shop' 
around the EU in order to get access to the items.  

–  Second, if one Member State issues an export denial following the imposition of a 
catch-all control other Member States do not necessarily undertake the necessary 
steps  needed  to  implement  the  no-undercut  principle.  Even  though  the  Dual-use 
Regulation  requires  Member  States  to  consult  the  list  of  valid  denials  prior  to 
issuing  an  authorisation  and  to  consult  among  each  other  in  case  of  similar 
transactions,  in  the  case  of  catch-all  situations,  there  may  be  no  authorisation 
process implemented at all in some Member States. Consequently, even though an 
export denial may be issued by one Member State, competitors in other Member 
States  may  continue  to  trade  without  any  restrictions,  which  clearly  violates  the 
principle of a level playing field for EU exporters and calls into question the point 
of imposing such controls in the first place. 

The  problems  identified  above  are  closely  linked  to  the  issue  of  having  different  risk 
assessment approaches used across the EU Member States. Fundamentally, situations where 
one  Member  State  considers  a  transaction  too  risky  to  authorise  because  of  proliferation 
concerns while other Member States continue to export items in similar or identical situations 
must be avoided.  

In the future, Member States could be subject to a mandatory exchange of information about 
imposed  catch-all  controls  and  the  reasons  behind  their  decisions.  Moreover,  consideration 
could  be  given  to  the  concept  of  creating  an  EU-wide  catch-all  control.  Under  such  a 
mechanism and in specific situations, a concerned Member State or group of Member States 
could ask the Commission to issue an authorisation requirement applicable across all 27 EU 
Member States and valid for a certain period of time. Customs authorities across the EU could 
then  be  requested  to  pay  particular  attention  to  certain  specific  types  of  transactions. 
Introducing  such  a  common  approach  would  mean  that  the  situation  of  exporters  across  the 
EU would become more stable, while at the same time, security efforts would receive a strong 
boost as potential proliferators would be effectively blocked from shopping around the EU for 
certain items.  

Further thought will have to be given to the question of how to ensure that no undercutting 
takes place once a Member State has issued a denial following the imposition of a catch-all 
control.  Consideration  could  be  given  in  this  regard  to  strengthening  the  role  of  customs 
authorities or possibly creating temporary lists of additional controlled items which would be 
based  on  recently  issued  denial  decisions.  Such  a  temporary  list  would  introduce  a  license 
requirement  for  the  export  of  certain  items  (not  listed  on  the  EU  control  list)  to  certain 
destinations  and  would  thereby  oblige  Member  States  to  assess  these  export  transactions 
based on a set of common rules. 

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Questions: 

(46)  Would you support the idea of obliging Member States to exchange information about 
imposed  catch-all  controls  (authorisation  requirements),  which  would  replace  the 
current approach of voluntarily exchanging information? 

(47)  Would  you  support  the  idea  of  creating  a  mechanism  for  the  issuing  of  an  EU  wide 

catch-all control? 

(48)  What  is  your  opinion  about  the  idea  of  creating  temporary  lists  of  items  and 

destinations which would be subject to controls under catch-all provisions? 

6.8.  Working towards a fully integrated internal market for dual-use items 

A  discussion  about  the  future  EU  export  control  model  would  be  incomplete  without 
consideration being given to the question of intra-EU transfers, which continue to be one of 
the  few  exceptions  to  the  principle  of  free  circulation  of  goods  in  the  EU.  At  a  time  when 
certain  facilitation  measures  could  be  agreed  on  intra-EU  transfers  of  military  items,  the 
reasons  to  maintain  intra-EU  transfer  controls  concerning  dual-use  items  seems  to  be 
somewhat  arcane.  Subjecting  intra-EU  transfers  to  essentially  identical  licensing  procedures 
as exports to third countries is hard to justify in an internal market. The problem is aggravated 
by the lack of clear harmonized procedures for granting intra-EU transfer authorisations. For 
several years, successive EU legal frameworks dealing with export controls have left open the 
possibility that such controls may be lifted following further steps towards the harmonization 
of export controls in the EU. Unfortunately no progress has as yet been made. 

Intra-EU transfer controls inhibit development as companies try to avoid as much as possible 
cross-border cooperation requiring the completion of tedious licensing procedures and record-
keeping.  In  general,  there  are  a  number  of  large-scale  projects  currently  requiring  high 
numbers of licenses, which could considerably benefit from a more streamlined approach to 
intra-EU transfer controls.  

Within  the  concept  of  a  new  EU  export  control  model,  a  serious  effort  should  be  made 
towards  the  objective  of  removing  intra-EU  transfer  controls  for  dual-use  items.  Wherever 
necessary  for  security  reasons,  consideration  could  be  given  to  alternative  ways  of  ensuring 
that no diversion has taken place, including: 

–  Greater use of post-shipment verification mechanisms; 

–  Having  lists  of  certified  end-users  in  the  EU  who  could  receive  specific 

items/technologies currently listed in Annex IV. 

At a minimum and as a first phase of work in this area, record keeping requirements could be 
relaxed and general licenses could be introduced for certain items.  

Questions: 

(49)  Would you support the objective of progressively reducing intra-EU transfer controls? 

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(50)  Would  you  support  the  idea  of  replacing  license  requirements  for  intra-EU  transfers 

with a post-shipment verification mechanism? 

(51)  Would you agree with the idea of replacing license requirements for intra-EU transfers 

with the introduction of certified end-users described above? 

(52)  Would you have any other ideas that would allow for a progressive reduction of intra-

EU transfer controls? 

6.9. 

Improved enforcement of export controls 

The enforcement of export control legislation is done by customs in two stages, namely at the 
location where good  are placed  into  the export procedure and at the EU border. At present, 
this is done on the basis of very limited information available to enforcement authorities. 

With the improvement of information exchange mechanisms as described above, enforcement 
authorities  could  get  access  to  pooled  information  concerning  valid  licenses,  registered 
exporters  as  well  as  suspicious  entities,  which  could  be  used  to  better  identify  high-risk 
transactions and concentrate enforcement efforts on them. 

Further  consideration  should  also  be  given  to  the  issue  of  making  better  use  of  Authorised 
Economic Operator (AEO) status in the export control process.  

Questions: 

(53)  What type of information would customs authorities need to properly enforce export 

controls at EU borders? 

(54)  Would customs find it useful to have access to pooled information concerning licenses 

issued in the EU and lists of exporters who have received licenses? 

(55)  How could AEO status be used within the export control framework? 

7. 

CONCLUSIONS  

7.1. 

Next steps 

This  Green  Paper  consultation  is  designed  to  start  the  review  process  of  the  EU  dual-use 
export control system as required under Article 25 of Regulation 428/2009. The approximate 
timeline of subsequent steps is outlined below: 

–  31 October 2011 – end of consultation; 

–  January 2012 – report on Green Paper results; 

–  September 2012 – formal report to EP and Council under Article 25; 

–  2013 – 2014 – proposals for amendments of the Dual-use Regulation. 

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7.2. 

Consultation period 

All  interested  stakeholders  are  invited  to  submit  their  views  concerning  the  issues  and 
questions outlined above. Submissions should be sent in an electronic format no later than 31 
October 
address:  TRADE-F1-DU-CONSULT-
email 
to 
2011@ec.europa.eu.  

following 

2011 

the 

7.3. 

Publication of submissions 

The  Commission  foresees  the  possibility  of  publishing  or  disseminating  the  detailed 
submissions it receives to this Green Paper consultation. If you would like your submission to 
remain confidential, this must be clearly indicated in your response. 

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