REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Regulation (EC) No 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items
Date: 2015-07-10
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: arms control, dual-use good, export (EU), export licence, export monitoring, trade restriction, transit

EUROPEAN 
COMMISSION 

Brussels, 10.7.2015  
COM(2015) 331 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation of Regulation (EC) No 428/2009 setting up a Community regime 
for the control of exports, transfer, brokering and transit of dual-use items 

EN 

   EN 

 
 
 
 
  
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the implementation of Regulation (EC) No 428/2009 setting up a Community regime 
for the control of exports, transfer, brokering and transit of dual-use items 

1. 

INTRODUCTION 

Article 23(3) of Regulation (EC) No 428/2009 calls for the Commission to submit an annual 
report  to  the  European  Parliament  on  the  activities,  examinations  and  consultations  of  the 
Dual-Use  Coordination  Group  (DUCG).  Furthermore,  the  Commission  Communication 
(COM(2014)244)  recognises  that  the  publication  of  reports  and  non-sensitive  control 
information  could  be  critical  steps  to  enhance  transparency  and  improve  operators' 
compliance  and  their  capacity  to  implement  controls.  This  report,  prepared  by  the 
Commission  and  the  DUCG  with  inputs  from  Member  States1,  provides  information  on  the 
implementation  of  the  Regulation  in  2014,  and  includes  aggregated  export  control  data  for 
2013. 

2. 

EVOLUTION OF THE POLICY & REGULATORY FRAMEWORK 

2.1. 

Export control policy review 

2014  marked  an  important  stage  in  the  export  control  policy  review  with  the  adoption  of 
Communication (COM(2014)244) of 24 April 2014, which aims at mapping the direction for 
EU  export  controls,  and  identifies  concrete  policy  options  for  their  modernisation  and  their 
adaptation  to  rapidly  changing  technological,  economic  and  political  circumstances.  Furhter 
to the adoption of the Communication, the Commission launched an impact assessment with a 
view  to  evaluating  the  costs  and  benefits  associated  with  the  various  review  options  and 
identifying the most suitable regulatory and non-regulatory actions (http://ec.europa.eu/smart-
regulation/impact/planned_ia/docs/2013_trade_015_duxc_en.pdf).  

Upon publication of Regulation (EU) No 599/2014, on 12 June 2014, a Joint Statement by the 
European Parliament, the Council and the Commission on the review of the dual-use export 
control system was published2, recognising that modernisation and further convergence of the 
system  is  needed  in  order  to  keep  up  with  new  threats  and  rapid  technological  changes,  to 
reduce distortions and promote a uniform level playing field for exporters.  

Furthermore,  the  Council  adopted,  on  21  November  2014,  Conclusions  on  the  review  of 
export 
policy 
control 
(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/145903.pdf), 
while 
the 
put 
(http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+OQ+O-2014-
000081+0+DOC+XML+V0//EN).  

an  Oral  Question 

the  European 

Parliament 

topic 

on 

1 Some competent authorities also publicly report on trade in dual-use items. 
2 Joint Statement by the European Parliament, the Council and the Commission attached to Regulation (EU) No 
599/2014. 

2 

 
 
 
                                                 
2.2. 

Amendments to Regulation (EC) No 428/2009 

Council Regulation (EC) No 428/2009 was amended twice over the reporting period: 

•  Regulation (EU) No 599/2014 of the European Parliament and the Council of 16 April 
20143,  introduced  a  delegation  of  competence  to  the  Commission  to  update  the  EU 
Control List in Annex I (“delegated acts”) and to remove destinations from the scope 
of EUGEAs in Annex II in relation to arms embargoes; 

•  Commission Delegated Regulation (EU) No 1382/20144 of 22 October 2014 updated 
the  EU  Control  List  in  Annex  I  to  the  Regulation,  and  incorporated  modifications 
agreed  at  the  multilateral  export  control  regimes  in  2011,  2012  and  2013.  The 
modifications  include  de-control  of  certain  items  and  amendments  to  goods 
description and definitions, as well as some new controls e.g. on internet surveillance 
and  intrusion  software.  The  new  updated  and  consolidated  EU  Control  List  became 
applicable  on  31  December  2014,  thereby  allowing  the  EU  to  adhere  to  its 
international  commitments  with  regard  to  export  controls  and  helping  EU  exporters 
where control parameters were relaxed. 

Further  evolution  of  the  regulatory  framework  remains  open  for  examination  as  part  of  the 
export control policy review. 

2.3. 

National implementing measures 

The  Regulation  is  binding  in  its  entirety  and  directly  applicable  in  all  Member  States,  but, 
nevertheless, foresees that Member States should take measures in implementation of certain 
provisions, and that information on those measures should be published in the Official Journal 
of the European Union. In 2014, the DUCG collected inputs from Member States to update 
the notice published on 6 March 20125 providing an overview of measures taken by Member 
States regarding e.g. the extension of brokering and transit controls, the extension of controls 
to  non-listed  items  for  reasons  of  public  security  and  human  rights  consideration,  the 
introduction  of  national  general  export  authorisations,  the  application  of  intra-EU  transfer 
controls  for  non-listed  items,  as  well  as  information  relating  to  national  export  control 
authorities.  

3. 

ACTIVITIES OF THE DUAL-USE COORDINATION GROUP 

Article  23  of  the  Regulation  sets  up  a  Dual-Use  Coordination  Group  (DUCG)  bringing 
together experts from the Commission and Member States to examine any issue concerning 
the application of export controls with a view to practically improving their consistency and 
effectiveness throughout the EU. 

3.1. 

Consultations on implementation issues 

Over  the  reporting  period,  the  DUCG  provided  a  forum  for  consultations  on  a  number  of 
topical issues concerning the implementation of the Regulation. The DUCG held 7 meetings, 
and discussed specific control issues e.g. application of the cryptography note exemption, the 

3 OJ L173, 12.06.2014, p; 79. 
4 OJ L 371, 30.12.2014, p. 1 
5 OJ C 67, 6.3.2012, p. 1. 

3 

 
 
                                                 
CBRN  lists  of  high-risk  substances  and  explosive  precursors,  Euratom  agreements,  and  the 
control of graphite. 

The DUCG conducted a technical exchange of information regarding implementing national 
measures, and prepared an update of the Official Journal publication on national measures (OJ 
C67 of 6 March 2012). 

The  DUCG  reviewed  the  methodology  and  approach  for  data  exchange,  and  conducted  a 
comprehensive  licensing  data  collection  exercise  (on  2013  data)  in  order  to  increase 
information  exchange  between  MS  and  public  transparency  about  EU  dual-use  export 
controls. 

The DUCG set up, jointly with customs administrations, a technical sub-group to examine the 
potential convergence of customs' "Authorised Economic Operators" programmes with export 
control  "internal  compliance  programmes".  The  technical  sub-group  focused,  in  an  initial 
stage, on the preparation of an AEO-ICP comparison table. 

The  DUCG  conducted  a  technical  exchange  of  information  regarding  the  control  of 
Information  and  Communication  Technology  (ICT)  monitoring  and  interception  items.  The 
DUCG  set  up  a  "Surveillance  technology  expert  group"  to  examine  this  issue  in  depth. 
Another technical expert group on nuclear-grade graphite was also set up. 

3.2. 

Technical support to the preparation of updates to the EU control list 

The  DUCG  was  consulted  and  supported  the  preparation  of  a  Commission  Delegated 
Regulation updating the EU Control List. Special national experts shared technical expertise 
and training with competent authorities highlighting the most important changes to the control 
list on the occasion of a special session of the DUCG. 

3.3. 

EU Guidelines on Dual-Use Export Controls 

The DUCG prepared an addition to EU Guidelines supporting exchange  of  information  and 
consultations between Member States with respect to global licences. The revised Guidelines 
were endorsed, as a non-binding instrument, by the Dual-Use Working Party of 24 November 
2014.  

3.4. 

Exchange of information between competent authorities 

The DUCG continuously works on further development of the Dual-use e-System (DUeS), a 
secure  and  encrypted  electronic  system  hosted  by  the  Commission,  to  enable  effective 
exchange of information between export control authorities and the Commission. The DUCG 
introduced  new  functionalities  and  improvements  into  DUeS,  providing  for  exchange  of 
information  concerning  denials  on  brokering  and  transit  of  dual-use  items,  as  well  as  on 
exporters prohibited from using EU General Export Authoritisations. 

The DUCG has also finalised preparations for the extension of the DUeS to exports denials 
under Regulation (EC) No 1236/2005 concerning trade in certain goods which could be used 
for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment. 
The new functionality is expected to enter into operation in the 1st quarter of 2015. Technical 

4 

 
 
information  regarding  the  DUeS  was  also  transmitted  to  the  European  External  Action 
Service, to support the electronic exchange of information on arms export denials. 

3.5. 

Transparency and dialogue with industry and academia  

In light of Article 23(2), the Commission held regular meetings with industry stakeholders. In 
particular, the DUCG held a "DUCG-Industry Forum" on 23 October 2014 in Brussels with 
industry associations and civil society organisations to discuss review options identified in the 
Commission  Communication  "The  review  of  export  control  policy:  ensuring  security  and 
world"6 
competitiveness 
changing 
a 
(http://trade.ec.europa.eu/doclib/docs/2014/october/tradoc_152858.pdf). 

in 

The  DUCG  also  prepared  documentation  to  support  exporters'  implementation  of  the 
regulations.  In  particular,  a  "Comprehensive  Change  Note"  summarises,  for  information 
purposes,  the  control  text  changes  to  the  EU  control  list  introduced  under  Commission 
Delegated 
1382/2014 
(http://trade.ec.europa.eu/doclib/docs/2014/october/tradoc_152854.pdf).  

Regulation 

(EU) 

No 

3.6. 

Export control monitoring and enforcement 

The  Commission  promotes  effective  monitoring  and  enforcement  of  export  controls  within 
the EU through various support actions. In 2014, the Commission released a new version of 
the  'correlation  table'  linking  customs  codes  with  dual-use  classifications  and  continued 
inclusion of export control parameters into the EU's online customs tariff database (TARIC).  

National authorities are primarily responsible for the enforcement of export controls. Over the 
reporting period,  a  few enforcement actions were reported and resulted in the imposition of 
administrative penalties. 

3.7. 

Pool of Experts 

In  2014  the  Pool  of  Experts  operated  by  Commission’s  JRC  and  experts  made  available  by 
some Member States continued to provide support to EU export control authorities requesting 
advice in relation to concrete licensing cases. In total, 9 advices were provided to 6 Member 
States competent authorities. 

3.8.  Capacity building 

The  Commission’s  Joint  Research  Centre  continued  the  series  of  technical  seminars  for 
licensing authorities in collaboration with the US Department of Energy, started in 2007. The 
7th  seminar  was  held  on  May  6-7,  2014  in  Ispra,  Italy.  In  total  the  events  were  attended  by 
over 80 EU licensing officers and technical experts coming from Member States. 

The  DUCG  also  contributed  to  the  preparation  by  Commission  services  (JRC,  TAXUD, 
TRADE) of a simulation exercise for export control licensing officers and customs officers, to 
be conducted in the 1st quarter of 2015.  

6 COM (2014)244 final of 24 April 2014. 

5 

 
 
                                                 
4. 

EU EXPORT CONTROLS – KEY DATA  

It  is  difficult  to  get  reliable  information  on  dual-use  exports  as  there  is  no  correspondingly 
defined  economic  sector.  However  the  Commission  and  Member  States  do  collect  data  that 
allow  for  approximate  estimates  of  exports  of  dual-use  goods  based,  on  the  one  hand,  on 
customs commodities identified by the correlation table which include dual-use goods and, on 
the  other  hand,  on  specific  licensing  data  collected  by  competent  authorities.  To  be  noted, 
estimates  of  exports  presented  hereafter  do  not  cover  services  and  intangible  technology 
transfers associated with the trade in dual-use goods. Estimates presented below derive from 
2013 export data. 

4.1. 

EU dual-use trade: items and destinations  

The Regulation primarily applies to the export of about 1825 dual-use items listed in Annex I 
(the "EU Control List") and classified in 10 categories (Figure 1). These dual-use items relate 
to  circa  1000  customs  commodities7,  including  chemicals,  metals  and  non-metallic  mineral 
products,  computers,  electronic  and  optical  products,  electrical  equipment,  machinery, 
vehicles  and  transport  equipment  etc.  and  typically  fall  at  the  high–tech  end  of  this  large, 
mixed commodity area.  

Figure 1: Number of dual-use items listed in Categories of Annex I further to the adoption of Regulation (EU) 
No 1382/2014. 

7 The notion of dual-use export domain refers to this large, mixed commodity area which includes dual-use 
items. The trade of dual-use items takes place within this commodity area, but is not identical to it, since by far, 
not all of the commodities within the dual-use export domain are export-controlled. Measurements by the 
Commission's Joint Research Centre, based on Eurostat’s COMEXT database, result in a stable estimate of a 
'dual-use export domain' representing about 20% of EU total exports (including intra-EU trade).  

6 

 
 
 
                                                 
Using the correlation between customs codes and dual-use classifications, it is estimated that 
controls apply to items included in an 'export domain' representing approximately 20% of EU 
total exports (Figure 2). 

EU TOTAL EXPORT

100% 

DUAL-USE EXPORT DOMAIN

20% 

Figure 2: Estimated value of the 'dual-use export domain' and total exports 

A large part of the dual-use export domain concerns intra-EU trade or exports towards 'E001 
countries'  benefiting  from  general  export  authorisations.  This  reflects  the  EU  export  market 
structure in the relevant commodities as well as trade facilitation under EUGEAs (Figure 3)8  

Figure 3: Destination countries and sub-regions for EU dual-use export domain in 2013.  

8 "Stores and provisions extra" are defined as delivery of ships' and aircraft's stores. 

7 

 
 
 
 
 
 
 
 
 
 
  
                                                 
 
 Figure 4: Destination countries by world regions and subregions, 2013 

Figure 5: Top 50 extra-EU destinations by value in the dual-use export domain 20139. 

4.2. 

Applications, licences, denials  

The DUCG has exchanged information and collected licensing data, in order to improve the 
understanding  of  export  controls  and  their  economic  effect.  Some  data  collected  for  the 
reporting  period  is  reported  below;  it  should  be  noted  however  that  not  all  Member  States 
collect  all  data.  The  information  provided  below  thus  represents  approximate  estimates  of 
aggregate  quantities  and  value  within  the  limits  of  the  data  made  available  by  the  time  this 
report was being drawn up. 

9 "N.det.Extra" includes countries and territories not specified within the framework of trade with third countries. 
(These codes are usually used for goods delivered for offshore installations). 
"Secr. Extra" includes countries and territories not specified for commercial or military reasons. 

8 

 
 
 
 
                                                 
 
Controlled trade - Volume

Applications (including
Notifications)

Authorisation

Denial

r
N

45000,00

40000,00

35000,00

30000,00

25000,00

20000,00

15000,00

10000,00

5000,00

0,00

2010

2011

2012

2013

Figure 6: Number of authorisations and denials (2010-2013)10 

Controlled trade - Value

90.000

80.000

70.000

60.000

€
n
M

l

50.000

40.000

30.000

20.000

10.000

0

Applications (including
Notifications)

Authorisation

Denial

2010

2011

2012

2013

Figure 7: Value of authorisations and denials for (2010-2013) (mln EUR)  

10  In  Figure  6  and  Figure  7,  "Applications"  data  include  all  applications  for  licenses,  including  notifications 
under  general  authorisations,  thus  providing  an  indication  of  "controlled  trade".  The  charts  makes  use  of 
authorisation  data  as  estimate  for  application  data,  in  cases  where  no  application  data  is  available. 
"Authorisations"  data  refers  to  dual-use  exports  authorised  under  individual  and  global  licences.  It  should  be 
noted that applications do not necessarily correspond to the sum of authorisations and denials, as a number of 
applications may be cancelled and some applications may not be finalised within the same year. "Denial" refers 
to the volume and value of denied exports. 

9 

 
 
 
 
 
 
 
                                                 
2013 Authorised Volume by License Type

EU General Export Authorisation

8,7%

National General Export Authorisation

3,1%

Brokering authorisation

0,1%

Transit authorisation

0,2%

License under a national control measure

1,9%

License for non-listed items

6,1%

Intra-EU transfer license

1,6%

Global license (Annex I)

2,3%

Individual license (Annex I)

76,1%

0

5.000

10.000

15.000

20.000

25.000

Nr

Figure 8: Comparative number of authorisations per category (2013 data) 

2013 Authorised Value by License Type

EU General Export Authorisation

5,3%

National General Export Authorisation

3,6%

Brokering authorisation

0,0%

Transit authorisation

0,2%

License under a national control measure

0,0%

License for non-listed items

0,5%

Intra-EU transfer license

10,8%

Global license (Annex I)

23,4%

Individual license (Annex I)

56,1%

MEUR

0

5.000

10.000 15.000 20.000 25.000 30.000 35.000

Figure 9: Comparative value of authorisations per category (2013 data) 

In total, data estimates point to a marked increase of controlled trade over the last year, with 
applications  value11'  reaching  EUR  85  bn  and  controlled  dual-use  exports  thus  representing 
over 4.9 % of total extra-EU exports. Authorised trade amounted to EUR 48 bn, representing 

11 This figure includes value for applications and notifications under General Export Authorisations. 

10 

 
 
 
 
 
                                                 
3.1%  of  total  extra-EU  exports,  with  a  majority  of  transactions  authorised  under  individual 
licenses (approx. 25.000 single licenses issued in 2013). By contrast, only a small portion of 
exports  were  actually  denied:  approx.  260  denials  were  issued  in  2013,  representing  about 
0,06% of the value of controlled dual-use exports in that year, and a negligible portion of total 
EU exports12.  

12  

In 2013, denied exports amounted to 0.003% of total extra-EU exports. 

11