On 10 May 2021, the Council of the European Union adopted the revised text to Regulation 428/2009 on export control on dual-use goods and technologies (“Dual-Use Regulation”).
The EU’s export control system was first established in 2009 with the Dual-Use Regulation and regulates trade in goods, software and technology that can be used for both civilian and military purposes. With the rapid technological and geopolitical developments there has since been need to modernize the EU’s response to evolving security risks, and in particular those related to emerging technologies.
In recognition of this, in 2016 the EU Commission proposed a revision of the Regulation with substantial changes, including greater focus on cyber surveillance, human rights and terrorism-related considerations.
Now almost 5 years since the EU Commission’s proposal was published, the Council and the EU Parliament have both agreed on the final text of the Recast. The new rules will enter into force 90 days after the Recast has been signed by the EU Parliament and the Council. It is expected that the Recast will be signed in the coming weeks and apply in the last quarter of 2021.
The new rules
The Recast imposes stricter controls on a wider range of emerging technologies and strengthens the coordination between Member States and the EU Commission. In addition, for exporters, brokers and providers of technical assistance the Recast expands the scope of controls, establishes new authorizations and introduces due diligence obligations.
The new rules include, amongst others:
- new controls on cyber-surveillance technology at risk of being used in violation of human rights outside the territory of the EU;
- a requirement for exporters using a global export authorization to have an internal compliance programme (ICP) (unless national authorities deems it unnecessary), along with other due diligence obligations;
- an EU-level coordination mechanism allowing for greater exchange between the Member States and the EU Commission concerning the export of cyber-surveillance items;
- two new general export authorizations: for intra- group technology transfers and exports of controlled encryption items;
- “transmissible controls” whereby national authorities may impose controls on the basis of the national legislation of another Member State, allowing a cross-border effect of national rules;
- harmonization of controls on technical assistance, including controls on technical assistance provided from the EU to non-EU nationals;
- An expansion of controls on brokering covering non-EU legal persons that provide brokering services from the EU.
Impact of the new rules
The new recast gives companies, research institutions and other stakeholders important roles and responsibilities regarding the international security risks associated with dual-use items and technology. With the new changes it is crucial to determine if your activities fall under the scope of the EU Dual-Use legal framework, and if so, what the exact implications of the new rules are.
If you wish to hear more about the new rules please contact our specialists on Trade, Export Control and Sanctions.