New types of technologies and goods are being used in warfare causing a need for refinement to existing export control lists. Countries with simplified export control procedures, such as between EU countries, may have dissimilar levels of control and procedures for re-export, or views on exports to certain regions, with Israel as the most complicated example. In response, Western leaders call for uniformising trade controls; however, this appears to be just as tricky.
The current framework and its shortcomings
Apart from dedicated sanctions and embargos against certain countries, the lists of goods and technologies under the Wassenaar Arrangement ("WA") have been and remain the primary basis for export controls in the 42 WA member states globally, including the US, UK, and EU (and Norway). The WA comprises two lists; one list of military goods and technologies (designated for military use) and the second list comprises dual-use goods and technologies (may be used for both civilian and military purposes).
It is up to each WA member state to decide how to incorporate the WA lists into internal law. Under Norwegian law, the continuously applicable lists are incorporated into the Export Control Regulations (FOR-2013-06-19-718) pursuant to the Export Control Act (2021-06-18-127), and export of items on the lists require an export license. For transfers of controlled goods and technologies within the European Economic Area ("EEA") (the EU, Norway, Liechtenstein, and Iceland), simplified procedures are available. Similar regulation of EEA-internal exports applies in other EEA member states.
Even within a relatively homogenous area of the world such as the EU and the EEA, there are internal differences in terms of legal, economic and/or administrative ability to put in place – and enforce – strict export control measures to ensure compliance with the objectives of international export control regimes such as the WA. These differences are to a certain extent also reflected in the states' political willingness to ensure that controlled goods and technologies do not end up in regions where such goods may be used to develop or enhance military capabilities in contravention of the aim to prevent regional or international destabilisation.
Further differences arise as many of the European states have adopted their own national additions to the export control lists due to the authorities in the EEA member states interpreting the rules of internal EU-based legislation differently. Goods that are subject to export control in one member state may thus be transferred to another member state that does not apply (the same level of) controls in connection with a potential re-export of the goods.
Another practical example is in the case of "catch all" provisions. These are essentially provisions requiring a license for the export of goods and technologies for certain types of end use and/or end users (e.g. to military end-use), even if the goods and services are not in themselves subject to restrictions under export control laws. National authorities typically have a broad discretion when applying these rules, and we see cases where this leads to different license requirements, and where this may e.g. be explained by differences in foreign policy and national security interests.
This is not a problem that has recently come to life. However, recent years' geopolitical developments and the prospects of an increasingly polarised global situation in the foreseeable future, has caused an increased focus on export control and the need for both more uniform rules as well as more streamlined implementation of such rules.
EU Commission's recent effort to increase member state cooperation and alignment
On 20 June 2023, the EU Commission and High Representative in a Communication1 called for more rapid and coordinated action at the EU level within the area of dual-use export controls as part of a European Economic Security Strategy. The Commission responded in a White Paper2 on 24 January 2024, in which it analysed the situation, the mechanisms available under the current dual-use export control regulations, EU Regulation 2021/8213 and proposed four specific measures to improve the coordination of dual-use export controls within the EU member states.
In particular, the Commission pointed to the WA and other international non-proliferation agreements and export control regimes being the primary generator for EU member states' adoption of export control lists. Recently, adoption of new items of emerging technologies on these lists has been hampered by certain WA member states (primarily Russia), as additions require unanimity. Partly in response to such blockage, some of the EU member states have implemented own additions to their national export control lists. This causes internal differences in export controls between EU member states which may lead to "forum shopping" and EU internal transfers of goods from a member state in which it is restricted for onwards export from another member state where such goods are not restricted.
Furthermore, the lack of a common approach to export controls does in the Commission's view negatively affect the EU's security and trade policy objectives. The Commission also held that a common EU voice in international forums would strengthen both the EU's and the individual members states' negotiation position and ability to stand up to geopolitical pressures. They further pointed to the lessons learnt from the united work on sanctions against Russia, in particular the effectiveness of such joint work in addressing the Russian threat to the security situation of the EU as such, in collaboration with international partners.
What's next?
Considering the identified shortcomings, the Commission proposed four specific measures to address the situation. Firstly, by using Regulations 2021/821 as a tool to implement new items to the dual-use list (Annex I to the Regulations), particularly those additions that have been vetoed from being added to the WA list. Two other proposals aimed to ensure better coordination in the future, by means of setting up a forum for political coordination within export controls, and by implementing a mechanism for better coordination of member states' individual national control lists. Finally, the Commission proposed to bring forward the timing of the planned evaluation of Regulations 2021/821 from between 2026-2028 until the first quarter of 2025 with a supporting study in 2024, to remedy, what in the Commission's view are, shortcomings in such Regulations.
The Commission has, however, met resistance from the EU Council, as the General Secretariat issued on 30 May 2024 its Conclusions4 on the Export Control White Paper. The Council underlined that national export controls remain a national competence of the member states, thus participation and adoption of other member states' export control lists shall be voluntary. The Council further emphasised the member states' differences in legal systems and that there is an administrative burden of increased export controls. That said, the Council acknowledged the geopolitical situation and the need for further coordination between member states. However this may, in the Council's view, be ensured within the boundaries of Regulations 2021/821, which already has the necessary mechanisms available for improving coordination of national control lists between member states, by means of meetings of a designated Dual Use Coordination Group (Article 24), application of the obligation on each member state to take appropriate measures to ensure proper enforcement of the Regulations (Article 25) and by the Commission issuing guidelines and recommendations for best practices (Article 26). Against this backdrop, the Council further considered that the Commission should prioritise implementing the mechanisms that are already available in Regulations 2021/821 rather than bringing forward the timing of the evaluation of such Regulations.
We read the Council's Conclusions as an outright dismissal of all four measures proposed by the Commission and a clear message that any proposed legislation to implement the measures will not obtain the required support to be enacted. Nevertheless, it is worth noting that the Council did acknowledge the underlying need for coordination within the area of export control. In the current geopolitical environment with increased international tension and high-pace development of new advanced technologies, our best bet is that the calls for coordination and alignment will only increase in the foreseeable future. It remains to be seen how the Council's Conclusions will be reflected in the Commission's further work to uniformise European dual-use export control.
Footnotes
1. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023JC0020&qid=1687525961309
2. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2024:25:FIN
3. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02021R0821-20231216
4. ST 9439 2024 INIT - OUTCOME OF PROCEEDINGS
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